Hansonian Hero vs. Hansonian Villian?

Taleb vs. Scholes

http://en.wikipedia.org/wiki/Nassim_Nicholas_Taleb

"Taleb appeared to be vindicated against statisticians in 2008, as he reportedly made a multi-million dollar fortune during the Financial crisis of 2007–2008, a crisis which he attributed to the failure of statistical methods in finance.[33][34] Universa, where Taleb is adviser, made returns of 65% to 115% in October 2008 in its approximately $2 billion “Black Swan Protection Protocol.”"

"Taleb appeared to be vindicated against statisticians in 2008, as he reportedly made a multi-million dollar fortune during the Financial crisis of 2007–2008, a crisis which he attributed to the failure of statistical methods in finance.[33][34] Universa, where Taleb is adviser, made returns of 65% to 115% in October 2008 in its approximately $2 billion “Black Swan Protection Protocol.”"

"The late Berkeley statistician David Freedman said that efforts by statisticians to refute Taleb's point that rare events with major consequences are poorly dealt with by conventional statistics had been unconvincing.[47]

On a Charlie Rose show Taleb said that he was pleased that none of the criticism he received for "The Black Swan" had any substance as it was either unintelligent or ad hominem/style over substance, which convinced him to "go for the jugular" with a huge financial bet on the breakdown of statistical methods in finance.[48]

Taleb and Myron Scholes have traded personal attacks. Taleb said that Scholes is responsible to the financial crises of 2008, and suggested that "This guy should be in a retirement home doing Sudoku, His funds have blown up twice. He shouldn't be allowed in Washington to lecture anyone on risk" [11] Scholes retorted that Taleb simply "popularises ideas and is making money selling books". Scholes also claimed that Taleb does not cite previous literature, and for this reason Taleb is not taken seriously in academia.[49]. Listing his academic works on the topics in "The Black Swan" Taleb said that "Academics should comment on data there not make technical comments on a LITERARY book" [43]"

http://en.wikipedia.org/wiki/Myron_Scholes

"In 1990 Scholes decided to get involved more directly with the financial markets and he went to Salomon Brothers as a special consultant, then becoming a managing director and co-head of its fixed-income-derivative group. In 1994, Scholes joined several colleagues, including John Meriwether, the former vice-chairman and head of bond trading at Salomon Brothers, and his future Nobel Prize co-winner Robert C. Merton, and co-founded a hedge fund called Long-Term Capital Management (LTCM). The fund, which started operations with $1 billion of investor capital, was extremely successful in the first years, with annualized returns of over 40%. However, following the 1997 East Asian financial crisis and the Russian Financial Crises the highly leveraged fund lost in 1998 $4.6 billion in less than four months and failed, becoming one of the most prominent examples of risk potential in the investment industry."

"Scholes is currently the chairman of Platinum Grove Asset Management, a hedge fund, which he started with former LTCM partner Chi-fu Huang. The company manages $4.5 billion and has an average annual return of 9.4 percent as of 2007.[5] The Platinum Grove Contingent Master fund suffered a 38 percent loss from the beginning of 2008 through October 15. The decline caused Platinum Grove to temporarily halt investor withdrawals from its largest fund."

Comments

[sudoku tricks]

38 percent loss on 4.5 billion that they manage thats a massive amount of money, it makes my skin crawl thinking about it. Interesting post,

[jordan retro 1]

Lying disguises our mortality, our inadequacies, our fears and anxieties, our loneliness in the midst of the crowd. We yearn for the comfort of familiar lies to create a more amenable reality.What do you think?