Necessary Listening

I've heard that there has been some turbulence in the world economy recently...giggle, giggle.

Do yourself a really big favor and listen to this interview of Nassim Taleb by Charlie Rose, recorded on December 3.

Once you hear his discussion of the economy and "the turkey" and probability statements, you will irrevocably understand how we are fooled by the stock market over and again.

His real contribution is, however, more general than "the economy;" it is that improbable events play a significant role with massive consequences in all of our lives, individually and collectively. We are fooled by our tendency / need to focus on pattern recognition to give us the semblance of stability. The "trick," I think, is to widen the pattern on which we are making our predictions. As he says, it is unwise for a pilot to not expect storms.

It's all part of the process.