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zerothehero38 karma

Where do you find new girls? Are they from talent agencies or do some of them find you, since you have a good brand?

How much do they get paid on the first shoot?

zerothehero5 karma

OK thanks for the answer. That's understandable, and I can certainly imagine that he overstated his case, as is his style. He's a provocateur, but then again so are you.

But I think you are missing his point. Your "(on most days)" aside is EXACTLY the issue at hand. It's the tail that can't be ignored if you are intellectually honest. It can perhaps be ignored if all you care about is making money in a certain context.

I believe Taleb is right that quants were using bad statistics to lie -- to make money in a way that gives them the rewards, but pushes the losses onto the company and onto taxpayers.

In other words, there's the question of whether they were wrong because they were ignorant, or wrong because it didn't matter for their their purposes. It sounds like from your response it was the latter -- that this issue wasn't really thought about.

To illustrate, here's an honest question for you. It sounds like you have some money, but not an FU sum, and you would like that. Given your background as a quant, why don't you use it to turn $200K into $2M or $20M? If as you say, mathematics can make predictions, why don't you do that?

I think at least part of the answer is because your methods don't really work. They work in the sense that you can push the tail risk onto the entire company failing, or onto taxpayers. But they don't work when you have skin in the game, as you do when investing your own money. Even when you work for GS, you're not playing with your own money. If the company goes bankrupt, you don't lose the salary you were paid.

And of course, this is not theoretical -- it HAPPENED, with alarming frequency.

I'm not a quant, but I'm a software engineer who works with quants at a big Internet company, many of them with similar backgrounds -- Ph.D.'s in applied sciences from MIT, Stanford, etc. (We're not in ads; we're more on the user side).

And I have observed first hand how quantative skills do NOT lead to better returns in trading. The quants ask ME for advice about trading. I happen to have a certain contrarian temperament which goes well with the market. It's nothing much more than dip buying (plus a little info from being in the industry), but most people CANNOT stomach dip buying. Even people with Ph.D.s who work as quants. It's an emotional thing, and not a mathematical thing.

They also don't understand Taleb's convex vs. concave distinction. I watched a new hire quant risk a large fraction of his savings for a meager return -- $20,000 for a $2,000 return. At the same time I bought GRPN when it was being savaged in the media, and made an additional $2K while risking $2K in a few weeks.

Taleb calls this "picking up pennies in front of bulldozers", which I think is insightful. We both made $2K in the end -- does it matter? I think it matters a lot. It's easy to ignore this distinction when you don't actually have skin in the game.

Also, Taleb IS a practictioner -- he was a trader, and arguably a quant before the term "quant" was coined -- he has written somewhat mathematical books like "Dynamic Hedging". His IS offering a replacement for quants to use, but it's just politically untenable in a finance organization: lose money every year, except 2 out of 20 years, but come out vastly ahead (convex bets). He claims to have made a lot of money in the 1987 and 2007 crashes, and earned enough political clout so that he could execute his strategies. And he also started his own hedge fund I believe.

So it's not fair to say he's not practicing. One of his major points is not to believe people without skin in the game, like academics, or people who work at banks and can leave for a startup without consequence :)

If you haven't read any Taleb since 10 years ago, I would recommend it... if you can stomach his tone, there is a lot of insight. I think you can make more money with philosophy than with mathematics. (Paul Graham is a good example of that)

zerothehero3 karma

Huh? But you quote the narrative fallacy in your book and here in this thread. According to Google he coined that, and it is indeed a very insightful concept. It's worth a lot of real money to people who understand it.

His books to tend to tread over the same concepts over and over, but I think it's partly because the concepts have lots of applications. People disregard them in every area of life.

They are fundamentally opposed to the heuristics developed in your reptile brain, so you have to CONVINCE yourself of them over and over, very explicitly. It's the equivalent of convincing yourself not to find a pair of beautiful breasts attractive.

As for offering solutions, I think his prescription is basically "small local truths" rather than "grand overarching theories". Anything more would be dishonest. I think his ideas have predictive power in the sense that people who ignore them are subject to predictable mistakes. They act based on fallacies of equal probability distributions, the narrative fallacy and the like.

To me, there should be a high bar to insult someone in print. Murthy apparently meets that bar! But someone being a little annoying when you saw him 10 years ago doesn't seem like a great reason. Ironically, Taleb and you are like, because he also insults people in print for no reason.

FWIW I will also mention that I found Paul Graham to be a blowhard after reading his essays online. Then I saw him give a talk in person in 2005, around when he started YC, and my opinion totally changed. There is something about human psychology where people with strong opinions leave you feeling antagonized. But I think it's better to take it as a sign you are learning something from them.

zerothehero3 karma

Why do you say Nassim Taleb is a pseudo-intellectual? This was a footnote after bringing up the concept of the narrative fallacy.

He seems to have a similar background -- he was an options trader turned author. He is generalizing option theory to one's choices in life, as you do somewhat frequently in the book.

Isn't it just competitiveness? You both have a penchant for insightful criticism as well as petty insults. I liked your book and I also like his books.

I guess all authors like to pick fights with each other. I ran across a big argument between Steven Pinker, Nassim Taleb, and Malcolm Gladwell. Maybe you are trying to enter that realm by picking a fight?

zerothehero2 karma

You're a fan of Paul Graham, and he has made explicit arguments for good behavior as an element of success in business:

http://www.paulgraham.com/good.html http://www.paulgraham.com/ronco.html

You seem relatively unconcerned with bad behavior, justifying a lot of lying and zero-sum behavior in this book. You seemed relatively blase about the fact that Goldman doesn't act in its clients' interests (which is well known by now, and one wonders why it hasn't let to their demise)

Don't you think this attitude affects your outcomes? You have had a ton of good contacts, and instead of making enemies, you could have been their angel investors and made money passively. Seems like that's what Gokul's strategy is.

I think the biggest philosophical difference is that you are coming from a zero-sum world and mindset, whereas Silicon Valley is not zero sum. Things do get created out of nowhere, in astonishingly short times.

Although perhaps the ad tech segment industry is more secretive and transactional, whereas other parts of the industry are open and creative. I've worked in Silicon Valley for 15 years, and I fully believe everything you say. However, recognize that your perspective is skewed, and that there are creative parts of Silicon Valley, and creative people do get rewarded.