Posted: Aug 18, 2011 9:24 pm
Sorry for a late reply, Sonoran; a combination of work, real life, and enjoying some gladiatorial combat in the Political forum.
I will say this, if you combine both Taleb and Fisher's approaches, then you'd have one group of strategies that consistently lose small amounts of money, but make massive amounts of profit when all hell breaks loose, while you have another group of strategies that consistently make decent amounts of money, but suffer when all hell breaks loose.
You'll be in a better position than any of the current economists to make predictions and offer theory.
As Nassim Taleb points out in Black Swan, never trust someone who has an incentive to cut corners
. That said, the government operates just like a business does. It wants a fee (taxes) for goods and services (keeping you safe from marauding lunatics/criminals, proactively searching for lunatics/criminals trying to cause mass damage, giving us roads to drive on, making sure we have clean water, etc.). I sometimes question what would happen if people started running the government like a business instead of... well... a government
If you start this school, just remember to cite me!
Good luck. I don't know if I'll be able to offer you any help, but I'm always a PM away.
Ah, but the destruction brings all manner of people, all manner of businesses, all manner of interests, etc. It also gives the local businesses the ability to cater to these new people and expand.
I think I should have told a bit more of the full story with that. Basically, they had two economic strategists on. One Democrat, one Republican. The Republican one was all "slash and cut", the Democratic one was all "stimulus! More money!". Then the story about Michelle Obama came on, then the one about the tornadoes. I noted with irony that the green initiative would cause quite a bit of devastation with the farming industry and then I noted how the tornadoes helped the economies by shifting money being spent there and creating a new series of markets and opening up niches that needed to be filled.
Basically, I had a nice, nice laugh at how in the Economic World "good" things can have a completely and totally devastating effect on the economy, while "bad" things can have a wonderful effect. Something no one wants to comment on
.
In my humble opinion, yes.
One thing that they make mention in my new copy of Ascent of Money is that the new emerging theories are all about evolution and revolve around the idea that economy mirrors biology. I am inclined to agree entirely. One of those being that there's one massive resource (the planet) that ultimate is host to all manner of competing organisms with niches opening and closing at different intervals. I feel that everything, in the end, turns out to be equal with only redistribution. Just like in biology. I'm a firm believer in The Red Queen Hypothesis as well and feels it definitely applies to everything economic:
Warning: If you're archnaphobic take a deep breath before loading this page. There are red mites on a spider here
http://en.wikipedia.org/wiki/Red_Queen%27s_Hypothesis
Basically, to sum it up: Every species in the entire world, is in a constant arms race against one another. Every sub-species is in constant competition with one another. Every single organism is in competition with one another. Should anything slow down or lose its edge, it will die.
By the way Sonoran, I have never asked, what is your ultimate goal? If you're looking to get into Financial Modeling or Quantitative Analysis, I may be able to advise to a school that may be able to help you. One that actually has a good Financial Modeler/Quant program and is not a cash-maker. What do I mean by that? NYU, a very respected school, offers a Quantitative Analysis Masters Program that Nassim Taleb always crashes.
He literally sits in the class, tells the Professors that they are wrong about everything (for example, that Random Market Hypothesis is entirely wrong seeing as how it can be statistically shown that the first 15 minutes of the open are the high or low of the day about 20% of the time; if I wasn't under NDA I could comment more on this), and that they should do something useful with their lives instead of teaching this garbage. Whenever a professor tries to argue with him, Taleb points out he has millions in the bank, while said professor is living off a teacher's salary. The result of this is Taleb failing/withdrawing from the program repeatedly and a great deal of the students for this program leaving it because they realize it's a waste of time and money.
If you want to be a researcher/theorist, there's not much I can really do to help you or offer in the way of advice, I hate to say.
It seems both have found their own unique solution to the same situation.
I will say this, if you combine both Taleb and Fisher's approaches, then you'd have one group of strategies that consistently lose small amounts of money, but make massive amounts of profit when all hell breaks loose, while you have another group of strategies that consistently make decent amounts of money, but suffer when all hell breaks loose.
I know the history of economics is one area I would like to specialize in if I decide to get a graduate degree in economics.
You'll be in a better position than any of the current economists to make predictions and offer theory.
I agree. I think the fear most people have in regard to government run institutions is the idea that the government and government employees have different incentives than do those that work in the private sector.
As Nassim Taleb points out in Black Swan, never trust someone who has an incentive to cut corners
. That said, the government operates just like a business does. It wants a fee (taxes) for goods and services (keeping you safe from marauding lunatics/criminals, proactively searching for lunatics/criminals trying to cause mass damage, giving us roads to drive on, making sure we have clean water, etc.). I sometimes question what would happen if people started running the government like a business instead of... well... a government That chimp experiment sounds interesting. Who knows, maybe the study of chimps will lead to a new school of economic thought: The Chimp School of Economics...
If you start this school, just remember to cite me!
Math is a subject I need to increase my knowledge on. I plan on doing this over the next year or two.
Good luck. I don't know if I'll be able to offer you any help, but I'm always a PM away.
I don't see a net benefit in the tornado situation. It appears to be a shift of demand from one group of businesses to another group of businesses.
Ah, but the destruction brings all manner of people, all manner of businesses, all manner of interests, etc. It also gives the local businesses the ability to cater to these new people and expand.
I think I should have told a bit more of the full story with that. Basically, they had two economic strategists on. One Democrat, one Republican. The Republican one was all "slash and cut", the Democratic one was all "stimulus! More money!". Then the story about Michelle Obama came on, then the one about the tornadoes. I noted with irony that the green initiative would cause quite a bit of devastation with the farming industry and then I noted how the tornadoes helped the economies by shifting money being spent there and creating a new series of markets and opening up niches that needed to be filled.
Basically, I had a nice, nice laugh at how in the Economic World "good" things can have a completely and totally devastating effect on the economy, while "bad" things can have a wonderful effect. Something no one wants to comment on
.Do you mean that if the whole is considered, the winners in an economy will match the losers in terms of wealth?
In my humble opinion, yes.
One thing that they make mention in my new copy of Ascent of Money is that the new emerging theories are all about evolution and revolve around the idea that economy mirrors biology. I am inclined to agree entirely. One of those being that there's one massive resource (the planet) that ultimate is host to all manner of competing organisms with niches opening and closing at different intervals. I feel that everything, in the end, turns out to be equal with only redistribution. Just like in biology. I'm a firm believer in The Red Queen Hypothesis as well and feels it definitely applies to everything economic:
Warning: If you're archnaphobic take a deep breath before loading this page. There are red mites on a spider here
http://en.wikipedia.org/wiki/Red_Queen%27s_Hypothesis
Basically, to sum it up: Every species in the entire world, is in a constant arms race against one another. Every sub-species is in constant competition with one another. Every single organism is in competition with one another. Should anything slow down or lose its edge, it will die.
By the way Sonoran, I have never asked, what is your ultimate goal? If you're looking to get into Financial Modeling or Quantitative Analysis, I may be able to advise to a school that may be able to help you. One that actually has a good Financial Modeler/Quant program and is not a cash-maker. What do I mean by that? NYU, a very respected school, offers a Quantitative Analysis Masters Program that Nassim Taleb always crashes.
He literally sits in the class, tells the Professors that they are wrong about everything (for example, that Random Market Hypothesis is entirely wrong seeing as how it can be statistically shown that the first 15 minutes of the open are the high or low of the day about 20% of the time; if I wasn't under NDA I could comment more on this), and that they should do something useful with their lives instead of teaching this garbage. Whenever a professor tries to argue with him, Taleb points out he has millions in the bank, while said professor is living off a teacher's salary. The result of this is Taleb failing/withdrawing from the program repeatedly and a great deal of the students for this program leaving it because they realize it's a waste of time and money.
If you want to be a researcher/theorist, there's not much I can really do to help you or offer in the way of advice, I hate to say.