The trader who profited from crashes and wrote the book on black swans
Nassim Nicholas Taleb warned that finance badly underestimates rare, extreme events, and then made money when they happened, first in the 1987 crash and again in 2008. His book The Black Swan sold close to three million copies, and his idea of antifragility describes systems that actually grow stronger from shocks.
Taleb was born on 12 September 1960 in Amioun, Lebanon, into a wealthy, politically prominent Greek Orthodox family: his maternal grandfather and great-grandfather both served as deputy prime ministers. The Lebanese Civil War, which began in 1975, eroded the family's fortune and influence. He studied at the University of Paris, took an MBA at Wharton in 1983, and later earned a doctorate in Paris on the mathematics of pricing derivatives.
He spent years as a derivatives trader at banks including UBS, Credit Suisse First Boston and BNP Paribas. A hedged bet against Eurodollars reportedly made him financially independent after the 1987 crash. One fund at Empirica Capital, the firm he founded in 1999, gained 56.86 percent during the 2000 dot-com bust, but the firm closed in 2004 after quiet markets. Advising Universa Investments from 2007, he saw some of its funds return 65 to 115 percent in October 2008. His approach, tail risk hedging, pays off in rare jackpots separated by long dry spells.
His five-volume Incerto, published between 2001 and 2018, explores uncertainty. Fooled by Randomness argued that people underrate the part luck plays in their lives. He calls for societies robust to black swans, events that are hard to predict, and for antifragile systems that benefit from volatility and error. He also champions convex tinkering, the view that decentralised trial and error beats centrally directed research.
The Black Swan, published in 2007, had sold close to three million copies by February 2011, stayed on the New York Times charts for 36 weeks, was translated into 50 languages and was named by The Sunday Times among the 12 most influential books since the Second World War. Since 2008 Taleb has been Distinguished Professor of Risk Engineering at NYU's Tandon School of Engineering. He describes himself less as a businessman than as an epistemologist of randomness who used trading to buy his independence.
Source: Nassim Nicholas Taleb
