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COVID Misconceptions, Fed Policy, Inflation | Nassim Taleb

Nassim Taleb is an essayist, scholar, mathematical statistician, and former option trader and risk analyst. His work has been focused on the concerns and problems of randomness, probability, and uncertainty. He has recently released a pre-recorded video that focuses on the misconceptions of COVID, the current financial climate, and how US leadership has impacted the economy.

In This Talk, You’ll Learn About:

  • Nassim Taleb’s history and philosophy in life
  • Mistakes that were made early on during the pandemic
  • The current climate of global economies
  • Risks of the financial market today
  • Observations of Trump’s presidency

Episode Notes:

  • 00:10 The introduction of Nassim Taleb.
  • 02:11 Tail risk protection and assumptions during Covid.
  • 03:08 The misconceptions or three fallacies surrounding the pandemic, issues that people are getting wrong about the pandemic.
  • 04:01 The first fallacy   – time factor.
  • 04:17 The second fallacy – consequences.
  •  04:39 The third fallacy – economic trade off.
  • 05:46 Misconceptions and responses to the pandemic by the Trump administration.
  • 06:10 The multiplicative growth effect of the pandemic and mistakes made.
  •  07:20 The wearing of masks – the probability and cost factor.
  • 09:24 Mandatory government guidelines and their impact on businesses.
  • 12:08 Explaining which of the social, political or economic systems pass or fail the Nassim anti- fragility test.
  • 14:44 Explaining and comparing anti- fragility with jumping one and 100 meters and its shock effect on the body.
  • 16:06 Exploring the consequences cost factor or implications of poor preparations for pandemics or disasters.
  •  17:25 Happenings in the economy today and the three categories classified.
  • 17:33 Category number 1 – Companies assisted during Pandemic.
  • 17:50 Category number 2 – Companies harmed by the pandemic.
  • 18:14 Category number 3 – Companies permanently maimed by the pandemic.
  • 19:58 Views on globalization, shortening supply chains and onshore production.
  • 22:04 Identifying the sources of fragility within the 80:20 rule.
  • 22:30 Lessons learned from the emergence of this pandemic and the fragile state of countries.
  • 24:03 The two reasons to buy tail risk protection and its importance to investors.
  • 25:39 An example of a specific form of tail risk hedging.
  • 26:06 Monetary Policies/Liquidity and its effect on asset prices and the stock market during the pandemic.
  • 26:54 The fragility aspect of the crisis and its evolutionary impact on businesses.
  •  29:58 Reasons for buying catastrophe insurance and its importance.
  • 31:41 Zombie companies, federal debt and the central banks analyzed.
  • 32:25 The impact of Covid in the long and short term on economic growth.
  • 35:01 High tail uncertainties and its effect on trading and inflation.
  • 36:21 The ‘ketchup’ model and its effect on the nonlinearity in finance and inflation.
  •  37:13 The most appropriate time to buy tail risk investment.
  • 38:11 An overview of the risks undertaken in private markets versus public markets.
  •  40:38 Common misconception of saving in private equity – pros and cons.
  •  41:51 Explaining the most under-appreciated risk in financial markets today.
  • 42:52 Views on the presidency – 2017 and now.
  • 44:28 Present-day observations on Trump as a president.
  • 46:33 Request for Nassim’s present reading literature list and suggestions on books to read.
  • 49:11 Thanks and acknowledgment for visit.

Recommended Books

The Black Swan by Nassim Taleb

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Statistical Consequences of Fat Tails: Real World Preasymptotics, Epistemology, and Applications (Technical Incerto) by Nassim Taleb

Antifragile: Things That Gain from Disorder (Incerto) by Nassim Taleb

Check out the Silicon Valley Investors Club (SVIC) Library for more great reads.

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