Gustavo Ballvé on June 17th, 2011
Food for thought, Home, Mental models, Portfolio Management, Risk management

Nassim Taleb (with Mark Blyth) has written a very interesting piece for Foreign Affairs called “The Black Swan of Cairo: How Suppressing Volatility Makes the World Less Predictable and More Dangerous” (PDF link here). The strangely radical notion that “to make systems robust, all risks must be visible and out in the open” is almost counter-intuitive and seemingly impractical for today’s leaders, again raising the issue of governance. The “seduction of stability” is real, permeates all aspects of our lives and has to be one of the mental/ behavioral “traps” one has to keep in mind. As many other great stories, we’ve found this one via the Farnam Street Blog. As a bonus, we’ve linked to interesting material by co-author Mark Blyth.

Other links on Mark Blyth:

His expanded bio on Brown U.’s faculty page

Expanded podcast interview (23:15) on “The Black Swan of Cairo” at Radio Open Source, by Brown’s Watson Institute. The comments are also interesting. If you listen to the very end, Mr. Blyth’s impersonation of Sean Connery isn’t half bad…

Mr. Blyth writes occasionally at the Triple Crisis blog, an interesting initiative.

He has a very interesting video on Austerity, the theme for his upcoming book (5:35).

Another interesting video of his regards the danger of mathematical models. It’s nothing really new, but the last sentence is about why such things last so much and it’s because of the power of established models/ institutions/ researchers. We were immediately reminded about that famous Max Planck sentence: “Science advances one funeral at a time.”

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