Nassim Taleb's Irreconcilable Differences

On Monday morning came news that Nassim Taleb’s protégés are opening a fund that’s going to bet on inflation. Coincidentally, on Monday morning news came that Taleb’s quote in a GQ article (.pdf) on his affiliated funds “made $20 billion for our clients, half a billion for the Black Swan fund” is erroneous.

As Janet Tavakoli notes (.pdf), those numbers simply cannot be accurate, especially the $20 billion. When asked to respond, Taleb emailed Janet,

The quote is inaccurate. The $20 billion might correspond to the face value of positions.” On his web site, Taleb says that the GQ article is one of the “Most representative overall profiles” “with [a] typo on the ‘billions’”.

What on earth does that mean? And how can you reconcile what Taleb emailed to Tavakoli with his statement on the web site?

On his web site, he implies that “billions” is a typo. Well, what is the “typo on the billions“? I doubt he means it should have been trillions. So does that mean all those billions should be millions? If so, this guy sure is getting an awful lot of press for making people “half a million for the Black Swan fund”.

What’s more, when Taleb emailed “The quote is inaccurate. The 20 billion might correspond to the face value of positions”, what does that mean? Here, he doesn’t seem to be challenging the “20 billion”, just the description of it being ”made … for our clients”. Does that mean that “20 billion” really did come out of his mouth and that the problem is that GQ incorrectly used it to describe profits when it should have been the notional value on the derivatives? And what about the half a billion dollar profit for the Black Swan fund? Was that right? His response to Tavakoli doesn’t address that.

Sure seems as though the man who isn’t “interested in money”, who blasts “intellectual hubris”, and who claims that the GQ article is one of the two ”Most representative overall profiles” of him, would be well-served to provide less evasiveness and more clarity as to the actual error in the profile that he himself links to. Thus far, his confusing and vague responses create more questions than answers.

UPDATE: Taleb now claims he never said $20 billion. Felix gets the interview. This whole mess reminds me of Cramer and the Bear Stearns call. Cramer says he never said to buy Bear Stearns, and in his defense, it’s hard to argue with that. But that’s not what a lot of people heard.

Comments

[raytayzmd:]

...I wrote this in response to another seekingalpha article about Nassim:

"...mean "goofball" -- serious "goofball"...read anything he's written and then go look up the DSM IV-TR criteria for diagnosis of a narcissistic personality disorder and see if you don't agree that Nassim qualifies as a "poster child" for it...and this is someone whose advice anyone is supposed to take seriously?...sorry, don't think so."

...go to Nassim's website and read his stuff and you'll soon conclude that it wouldn't be at all surprising if he claimed to make 20 bilion dollars for his clients...and why does anyone listen to a guy who has a fictional alter ego he's named "Nero" who goes around seducing the wives of his antagonists?

Jun 02 09:49 AM