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Nassim Nicholas Taleb

Nassim Nicholas Taleb (born 1960) is a Lebanese-born essayist, researcher in probability and risk, and former derivatives trader. He is the author of the multivolume essay the Incerto, including The Black Swan and Antifragile, and is known for his work on tail risk, model error and “antifragility.”

Contents23 sections
Key facts

Birth and Youth

Nassim Nicholas Taleb was born on September 12, 1960, in Amioun, Lebanon. His father, Nagib Taleb, was an oncologist and haematologist, and his mother, Minerva Ghosn, was an anthropology researcher.⁠[1]

He attended the Grand Lycée Franco-Libanais in Beirut. He recalled that from around the age of thirteen he kept a log of the hours he read, aiming for sixty hours a week. After the Lebanese Civil War broke out in 1975, the school, near the Green Line dividing Beirut, was badly damaged, and his family lost much of its wealth and political influence.⁠[1]

Taleb has written that he avoids the label “Lebanese,” “preferring the less restrictive "Levantine" designation.”⁠[1]

Studies in Paris and at Wharton

After graduating from the Grand Lycée Franco-Libanais, Taleb went to Paris for university, earning a Bachelor of Science with honours and a Master of Science.⁠[1]

Derivatives Trader

From December 1984 to January 2005 Taleb worked as a derivatives trader, specializing in hedging nonlinear risks and managing payoffs under complicated probability distributions. He held positions at Bankers Trust, UBSUBSUBS is a global financial group headquartered in Zurich, Switzerland, operating wealth management, Swiss personal and corporate banking, asset management and investment banking. Its modern bank emerged from a 1998 merger, its holding company was incorporated in 2014, and it acquired Credit Suisse in 2023.Open the full entry, CS First Boston, Indosuez and BNP-Paribas, was a floor trader at the Chicago Mercantile Exchange, and ran his own derivatives firm for six years.⁠[2]

In his CV he states that he spent 21 years as a derivatives trader and, after closing 650,000 option transactions and examining 200,000 risk reports, changed careers in 2006–2010 to become a scholar, mathematical researcher and philosophical essayist.⁠[3]

Dynamic Hedging and Doctorate

In 1997 John Wiley published Taleb’s technical book Dynamic Hedging: Managing Vanilla and Exotic Options. To write it he stepped away from trading for a few years, recalling: “I quietly deposited my necktie in the trash can at the corner of Forty-fifth Street and Park Avenue.”⁠[3][1]

In 1998 he received a doctorate from the University of Paris (Dauphine) with the thesis The Microstructure of Dynamic Hedging, advised by Hélyette Geman and examined by a committee including Dilip Madan, Nicole El Karoui, Michel Lasry and Marco Avellaneda.⁠[1]

Empirica Capital and the Courant Institute

In 1999 Taleb founded Empirica Capital LLC, which ran a tail hedging program until 2005.⁠[3]

From December 1999 to December 2005 he was a Fellow of the Mathematics in Finance Program and Adjunct Professor of Mathematics at New York University’s Courant Institute of Mathematical Sciences; from January 2005 to January 2006 he was also Dean’s Professor of Decision Sciences at the University of Massachusetts Amherst.⁠[2]

Fooled by Randomness

In 2001 Taleb published Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, with a second edition in 2005. The book later became part of his multivolume essay series, the Incerto.⁠[1][3]

The Black Swan and Universa

On April 17, 2007, Random House published The Black Swan: The Impact of the Highly Improbable. The book defines a black swan as a highly improbable event with three characteristics: it is unpredictable, it carries a massive impact, and after the fact people concoct an explanation that makes it appear less random and more predictable than it was.⁠[4]

In the publisher’s author Q&A, Taleb said such events are considered close to impossible before they happen and predictable afterward: “They are rare, but their impact is monstrous.”⁠[4]

The same year, Mark Spitznagel founded Universa Investments, an investment management firm specializing in risk mitigation, with Taleb as scientific advisor; his title at the firm is “Distinguished Scientist.”⁠[5][3]

From December 2007 to January 2009 he was a Visiting Research Professor at London Business School.⁠[2]

Distinguished Professor of Risk Engineering at NYU

In 2008 Taleb became Distinguished Professor of Risk Engineering at New York University’s Tandon School of Engineering. On September 17 of that year, Judge Mary Ellen Coster Williams of the United States Court of Federal Claims admitted him as an expert in risk management and derivatives.⁠[3]

Distinguished Research Scholar at Oxford

Ten Principles for a Black Swan-Proof World

On April 7, 2009, Taleb published “Ten principles for a Black Swan-proof world” on FT.com in response to the financial crisis. The first principle read “What is fragile should break early while it is still small,” and the second “No socialisation of losses and privatisation of gains.”⁠[6]

Testimony Before the U.S. Congress

On September 10, 2009, Taleb, identified as Distinguished Professor of Risk Engineering at the Polytechnic Institute of New York University and a principal of Universa Investments, testified at a hearing of the House Committee on Science and Technology’s Subcommittee on Investigations and Oversight on Value-at-Risk (VaR) models. He said: “I have been since begging for suspension of these measurements of tail risks. We just don't understand tail events.”⁠[7]

In July 2011 he testified again before a congressional subcommittee, on risk management.⁠[3]

The Bed of Procrustes and The Black Swan, Second Edition

In 2010 Taleb published the aphorism collection The Bed of Procrustes: Philosophical and Practical Aphorisms and a second edition of The Black Swan with a new essay, “On Robustness and Fragility.”⁠[8][4]

From January 2010 his involvement with Universa Investments became entirely passive.⁠[3]

Antifragile

On November 27, 2012, Random House published Antifragile: Things That Gain From Disorder. The book introduces the concept of the antifragile: the resilient resists shocks and stays the same, while the antifragile gets better and better.⁠[9][3]

Real World Risk Institute

On October 2, 2015, Taleb and others formed the Real World Risk Institute in the New York area, offering a “Mini-Certificate” on decision-making under uncertainty; its mission includes “Understand model error before you use a model.”⁠[10][11]

Skin in the Game and a Foreword to The Bitcoin Standard

On February 27, 2018, Random House published Skin in the Game: Hidden Asymmetries in Daily Life, the fifth volume of the Incerto. The book argues that the willingness to accept one’s own risks is an essential attribute of heroes, saints and flourishing people, and that one should not profit without owning one’s own risk and paying for one’s own losses.⁠[12][11]

Taleb wrote on his website that the book was not submitted to any reviewer, had no U.S. book tour, promotion or advance copies, only a single lecture in New York City, and opened at No. 2 on the New York Times bestseller list.⁠[11]

Statistical Consequences of Fat Tails

In 2020 STEM Academic Press published Statistical Consequences of Fat Tails: Real World Preasymptotics, Epistemology, and Applications, the first volume of the “Technical Incerto,” which expresses the ideas of the Incerto mathematically; the electronic version is freely available on arXiv. The same year he and Pasquale Cirillo published “Tail risk of Contagious Diseases” in Nature Physics.⁠[3][11]

“Bitcoin, Currencies, and Fragility”

On June 27, 2021, Taleb posted the paper “Bitcoin, Currencies, and Fragility” on arXiv; it was later accepted by Quantitative Finance. The paper argues that bitcoin in its current version “failed to satisfy the notion of "currency without government",” can be neither a short- nor long-term store of value, with an expected value “no higher than $0,” and cannot operate as a reliable inflation hedge.⁠[14]

Retirement from NYU

Taleb retired from his post as Distinguished Professor of Risk Engineering at New York University in 2022, and is currently affiliated with the American University of Beirut.⁠[3]

The Incerto

The Incerto is Taleb’s multivolume philosophical and practical essay on uncertainty, comprising Fooled by Randomness, The Black Swan, The Bed of Procrustes, Antifragile and Skin in the Game, in nonoverlapping volumes that can be read in any order. He describes it as an investigation of “opacity, luck, uncertainty, probability, human error, risk, and decision making when we don’t understand the world.”⁠[11]

His CV notes that all of his academic publications must serve as backups to points made philosophically in the Incerto, or to related applications.⁠[3]

Advisory Work and Stance on Honors

He has stopped accepting awards, honorary doctorates and listings; his official biography states that he refuses all honors and anything that “turns knowledge into a spectator sport.”⁠[3][15]

Languages and Interests

Taleb’s interests include philology (ancient languages), history and recreational mathematics. He speaks French, English and Levantine Arabic, converses in Spanish, Italian and Greek, and reads Ancient Greek, Classical Arabic, Latin, Aramaic/Syriac and Hebrew.⁠[3]

Related Organizations, Websites, and Public Accounts

Universa Investments: Official website: https://www.universa.net/ (opens in a new window).⁠[5]

Real World Risk Institute: Official website: https://realworldrisk.com/ (opens in a new window).⁠[11]

Sources

  1. Nassim Taleb (1960 - ) - Biography (opens in a new window)
  2. Nassim Nicholas Taleb (opens in a new window)
  3. Nassim Nicholas Taleb CV (opens in a new window)
  4. The Black Swan: Second Edition by Nassim Nicholas Taleb (opens in a new window)
  5. Universa Investments L.P. (opens in a new window)
  6. TEN PRINCIPLES FOR A BLACK-SWAN-ROBUST WORLD (opens in a new window)
  7. The Risks of Financial Modeling: VaR and the Economic Meltdown (opens in a new window)
  8. The Bed of Procrustes by Nassim Nicholas Taleb (opens in a new window)
  9. Antifragile by Nassim Nicholas Taleb (opens in a new window)
  10. Real World Risk Institute (opens in a new window)
  11. Nassim Nicholas Taleb Home & Professional Page (opens in a new window)
  12. Skin in the Game by Nassim Nicholas Taleb (opens in a new window)
  13. The Bitcoin Standard: The Decentralized Alternative to Central Banking (opens in a new window)
  14. Bitcoin, Currencies, and Fragility (opens in a new window)
  15. Nassim Taleb pictures and bio (opens in a new window)