Nassim Taleb DENIES Exaggerating His Returns


Ok, well this story may have some legs. This morning we mentioned Janet Tavakoli’s takedown of a claim Nassim Taleb supposedly made to GQ UK about having made his clients $20 billion and another $500 million for his Black Swan fund.

Well, Felix Salmon caught up with him and he apparently denies ever having made the quote to the magazine.

At one point in the article, Taleb is quoted talking about his hedge fund, and how “we made $20 billion for our clients”. Did he actually say this? He says that he didn’t, and that in fact he told Will Self in as many words that he was being misquoted and that the numbers were wrong. I believe Nassim on this, as someone who has talked to him quite a lot: he simply doesn’t give journalists performance numbers for his hedge funds. He doesn’t do that for people like me, who would understand what he was talking about; he certainly wouldn’t do it for someone like Will Self. If the $20 billion number ever did come up, says Taleb, it was probably as a very vague ballpark figure for the total notional amount associated with the options bought by his fund.

Alright, fine, so the onus is on GQ for now to either stand by or correct the story.

That being said, here’s the other part of the quote:

“I went for the jugular—we went for the max. I was interested in screwing these people—I’m not interested in money, but I wanted to teach them a lesson, and the only way you can do it is by trying to take it away from them. We didn’t short the banks—there’s not much to be gained there, these were all these complex instruments, options and so forth.”

We wonder if he stands by that? Cause if so, then blech! This from a guy who writes entire essays about how we all need to be humble about what we know, and that ultimately none of us know anything. And here he is talking about him being interesting in “screwing these people.”

Later Felix says this:

One of Nassim’s peculiar strengths is the way in which he refuses to get bogged down in details. If you ask him a specific question, you’re likely to get a very generalized answer. That can be frustrating, until you get used to it, and it explains a lot of the talking-past-each-other nature of the gripes he has with people like Tavakoli or Bookstaber or Merton. They tend to try to reduce things to something tractable; his whole point is that doing so misses the big picture. What he wants is a debate about his ideas; what he gets is a debate about his returns. But that’s probably inevitable in a world where facts are king — even when those facts can obscure more than they reveal.

Here’s an idea, if Mr. Black Swan really doesn’t like the parameters of the debate. Trying being nicer to people. When you regard all of your intellectual adversaries as idiots and fools (and he definitely does) you can’t complaint hat they’re not keen about debating your ideas.

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