Taleb on the meltdown

In an interesting post on the current meltdown, the Black Swan author Nicholas Nassim Taleb writes about the lack of business books which admit to difficulty and failure. This leads to charlatans duping people about the probability of success – and worse, contributes to the excessive faith in dumb statistical models at the heart of America’s financial woes. He writes:

“Go to a bookstore, and look at the business shelves: you will find plenty of books telling you how to make your first million, or your first quarter-billion, etc. You will not be likely to find a book on “how I failed in business and in life”—though the second type of advice is vastly more informational, and typically less charlatanic. Indeed, the only popular such finance book I found that was not quacky in nature—on how someone lost his fortune—was both self-published and out of print. Even in academia, there is little room for promotion by publishing negative results—though these are vastly more informational and less marred with statistical biases of the kind we call data snooping. So all I am saying is, “What is it that we don’t know“, and my advice is what to avoid, no more”

I like to think Ahead of the Curve is one book which tries at least to paint the business life in something other than glorious, hand-clapping Technicolor. I think this is partly what has HBS in such a mood.

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