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Saturday, 21 March 2009

Success in the market life

Russian roulette and vorotily business, classical history, and financial speculation, poetry and mathematics, science and Sherlock Holmes battles - everything is on the study of friendship and enmity with Mrs. success. If your neighbor is making success on the stock exchange - he was a genius or vezunchik? «Sun» publishes interviews the author of the book «nicely left happenstance. The hidden role of chance in the markets and in life »Nassima Taleb, which he gave to the English News Agency Air Force.

When we make a mistake luck for skill, we are becoming the «accidental nicely left» - cautions mathematician and insurance risk manager Nassim Taleb. We need a book that reveals the roots are already accustomed to underestimate the accident. And in general, it is mathematically slim, attractive and informative book on common sense. It provides a wide range of readers. Students and financial officers, taxi drivers and lawyers, dentists, and philosophers - all can read this book, and through it to gain a new perspective on life.

- Mr. Nassim, you have such a rich knowledge of world markets, the resulting work in different places. It seemed to me that, according to set out in your vision, ultimately, each only benefit from good luck. Is it true that experience is not so critical?

- I have not gone so far as to say that everything is defined by success. Above all, we underestimate its role. We tend to attribute our errors at the expense of underestimating the good luck and give a much more important skill.

- Is it possible to quantify the extent to which performance is based on luck, but as far as ability, experience?

- Count it's quite hard, but I tried, and a huge number of people tried, and most of my friends also tried to evaluate it. I believe that such a calculation, and introspection, which he leads - just an attempt to determine how much depends on the case. Self-help to assess the share of luck, and this is very simple. There is the way of evaluation, and I want to outline that will help you to feel that he intuitiven. Suppose I have a million monkeys typing printers. Printing is. At the end of the experiment, which may last a long time, especially if you are not too skilled typist, you probably can find one that would have printed the Iliad. But if you have 10 billion monkeys, it is very likely that some of them will print the Iliad. However, if you have one monkey, the opportunity to print the Iliad would be very small. So if a monkey print Iliad, as you see in the original population, it can fairly accurately calculate her chances to have accidentally created this great text. The same applies to the reception of traders. If I will be 10 thousand traders as a reference group, after 5 years, surely one of them will reach a record of success. Would I not pay attention to the description of such a trader and not attributed it to high art. But if I had 5 of traders in the market, and after 5 years, one of them came to the same record the results, I would say: yes, it is likely that the role of luck in the actions of this gentleman is very small.

- People are more concerned about the fact that the games in the stock market usually cost them money. Entire areas can flourish and die, depending on events in world markets, and if a strong element of luck involved, it is likely that we would be less peaceful than it is now.

- There is a worry as well as a case not only in trading. Adventitious presence in making economic decisions and actions of similar type. For example, you read government statistics, most of which are based on any real facts. But often you are faced with playing a role of randomness, and the importance of statistics in this case is reduced. Nevertheless, a very large number of decisions based on these statistics. We, the citizens of Britain, more and more encouraged to invest in bonds that have a small portfolio of shares. Against this background, we can just be successful, similar to those who might be doing this every day for earnings and for a long time? I always thought the idea of investing in bonds is extremely suspicious. Especially suspicious arguments that accompany the proposals of the investment. I call this situation "survival bias." This is very similar to the past with the monkeys.

Let's say you are in the 1900-meters at the turn of the century, and you have ample opportunities for investment. Suppose you would have invested in securities in Argentina, the UK, the USA, Russia, France and other countries. Over time, you would have seen - since, in fact, survived only Anglo-Saxon markets. And Argentina, Russia, etc. since the early 20 th century has a lot of conflicts. Therefore, monitoring the results of the securities markets, we can say, to adjust the results of historical events. This is a story written by the victors. Investing in bonds - not a good idea.

- But you also say that the whole system, all the way, which is global capitalism, flawed?

- Not quite so. I believe that the securities market, especially since 1982, has become an opiate for the middle class. And people derive an income that is called a miracle and magic, which could create a market. They fool themselves, and at some point, thought they may have changed their views. But most likely it will be too late.

- Money drop by?

- Yes, the money drop.

- So you are saying that luck definitely plays an important role. But there is also such a thing as training projections. At least you have some of these skills?

- Definitely. The problem with the way to the press and most of the banks of the trader rather vague, as you can see, that did the trader, or do you see for the short term and exclude the results of luck. You come to the conclusion that the results were positive because they make the right moves. We seek to set aside an alternative outcome that could happen, and seeing only what has occurred. And this is a very bad way, so how can we get in trouble. In other words, if you have a random outcome is possible, You can have more than one outcome. Therefore, do not estimate selection decisions on its results, and consider taking action on their quality. What has happened over the past 15 years, bovine market, distracted us from the quality and led only to observe the results. We will be punished.

- With regard to punishment, it is interesting, as expressed in your book and your theory of those with whom you have worked in the market? Is the book part of their exposure? Generally, they want to stay in the shade?

- On the contrary. Most of them are forced to admit that very few people are successful in the sale of shares. An extremely large majority of people are failed. Traders like my book, as they hear the clink of coins. They told me: "Well, even if I am not George Soros and Warren Buffett are not, if I am not billionaire, what would I like to see my relatives and friends, this is not because I am so not competent, but mostly because of the that I neudachliv. That is why my book has attracted traders.

- But the converse assertion is that people like George Soros and Warren Buffett have been fortunate and perhaps permanently successful, and if you go back to your secondary display on the law of numbers, it becomes particularly clear. But, referring to people like Soros, we constantly ask: what, in their opinion, should happen to the world markets? We almost worshiping these people, because they think they know something that does not know the rest. But it appears, due to the fact that you say, we simply mislead.

- Yes, but my idea and the book is not that these people do not know what they are talking about. My view is that they know a little bit less than we expect.

- That is, they benefit from what might they not?

- In most cases, that they do, there is a fortune. These guys are not dentists. Dentist, I can assess, look what he did. I even can stand behind the doors of his office and ask people to open mouths to see their teeth. Since traders are not held because you are dealing with random factors. It is therefore easier to buy and sell than fire egg. So, if people only buy or sell, you can not really evaluate them as accurately as the actions of a dentist or even a violinist.

- What is interesting is that for many years, we hear about people who took their own lives, as they felt the hindmost in the market. And if we look at it from your point of view, it will come to the conclusion that people should not be about anything from their failure to take at its own expense, personally.

- Certainly. My last chapter that does not allow self to be deceived by things that are beyond your control. " You can control a lot, but that you control, you can control in principle. You should not allow their self-esteem to be broken by outside events, outside of your control.

- It is much easier said than done. Humans often consider themselves typical loser in a case that took a bad turn, even if they are not always are subject to verification.

- You're right. This dilemma was one of the heroes of the book, called "Nero", who had a rich neighbor. He knew that his neighbor, an idiot, but, nevertheless, deeply in his heart he felt holding an inferior position. And that is why experienced some satisfaction, some joy, when the neighbor lost his job and failed during the crisis of 1998. That is true. We have animals that are involved in the game of social hierarchy and clamped external circumstances. The way in which I defend themselves - the only way that I know, and it is in disregard of the news. Completely ignore the people, the results are better than mine, not uvivayas around them. Therefore, the rules of social hierarchy is not evident. You're right, it is irrational.

- Okay. But it turns out, if you look from, the news very often, as well as world events have had a strong impact on financial markets. Therefore, as you can be a trader and not to feel the pulse?

- I'm a little bit different style of work. I sell only on a narrow segment of the market and on the basis of ideas, which I am sure, totally no accident. And this is usually an advantage to people who are looking for a model where it seems to me that it might not be. So my slightly different type of trade. And so I can ignore the external events.

- So in a world where there is no certainty you feel confident?

- On the contrary, I am doing the opposite. Someone thinks that he has a certain position, but I would say that he do not. I therefore conclude that this is like a lottery. I consider only those cases where it is not right, because he did not take into account a possible error.

- Consequently, in view of what was said, you lucky man?

- I think - the average. There is a test. If you also have to live your life a thousand times, how many outcomes are radically different from the one that actually occurred? That's the conundrum. Some people were of luck and the rest of the time their success was lower. I think my life is somewhere in between. Simply because as a trader I am extremely conservative. And I really worked on a lot of introspection. And I do a lot more introspection during the trade. In my company, our meetings, we say: "Let's look at today." If you're introspective, you can protect themselves from accidents and provide a positive band. It is also likely that you will be able to reduce the effect of negative strips.

- When it comes to markets and finance, we have a lot of earnest talk about confidentiality, and assess - a very difficult task. Is there is a danger that your book has a few breaks confidentiality? Because what it is, debunk some myths. - This may dispel the secrets gurus who talk about things that do not have statistical significance, that it is easy to show, simply on the basis of these statistics - a very standard technique. But I think that my book raises self-esteem of most people who are, to some extent because it would be justified. Because they said the same thing, but nobody has drawn their attention to the words when people are passionate about bubble, high rises the market, all these things, "good", the general view (well, of course, in quotes). I think my book will give confidence to people that have been configured with skepticism and this would benefit their self-esteem.

- So, your book is "nicely left an accident" will bring hope to the hindmost?

- Certainly.

- Let's hope so.

Mr. Nassim Nicholas Taleb, I am extremely grateful to you for the interview.

- Thank you. A thousand thanks for having invited me.

Material prepared by Ivan Zakaryan

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