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April 8, 2009

10 principles for a Black Swan-proof world — by Nassim Nicholas Taleb

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They appear in today's Financial Times, and follow:


1.
What is fragile should break early while it is still small.

2.
No socialization of losses and privatization of gains.

3.
People who were driving a school bus blindfolded (and crashed it) should never be given a new bus.

4.
Do not let someone making an "incentive" bonus manage a nuclear plant — or your financial risks.

5.
Counter-balance complexity with simplicity.

6.
Do not give children sticks of dynamite, even if they come with a warning.

7. Only Ponzi schemes should depend on confidence. Governments should never need to "restore confidence."

8.
Do not give an addict more drugs if he has withdrawal pains.

9.
Citizens should not depend on financial assets or fallible "expert" advice for their retirement.

10.
Make an omelette with the broken eggs.


Long time readers will know that I've been a fan of Taleb's work since long before he got big.

April 8, 2009 at 04:01 PM | Permalink


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