Gustavo Ballvé on September 21st, 2011
Food for thought, Home, Investment Themes, Mental models, Portfolio Management, Risk management, Science

We’ve been arguing that to finish first, first you must finish for over twenty years. We’ve also recently argued for cash as a strategic weapon with both defensive and offensive features: it is as much “cushion” as it is “cannon”. Nicholas Nassim Taleb has given a lecture recently at the Univ. of Pennsylvania (the 68-minute video is embedded inside), and the main takeaway is this: “(…) you live long by not dying, you win in chess by not losing—by letting the other person lose. So negative investment is not a sissy strategy. It is an active one.” — It is always interesting to hear him as a reminder of the constant mental traps we fall into, be it “fooled by randomness”, the difficulty of dealing with “black swans” and the concept of fragile/ anti-fragile systems. It also highlighted the planning fallacy, something David Brooks wrote about even more recently, so we’re taking the opportunity to post both together. H/T Farnam Street Blog for linking to both stories over the weekend.

Here’s the embedded video:

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