Managing risk in the real world with Nassim Taleb

We are principally practitioners, which entails a much, much more rigorous approach to risk. Academics love theories, but science isn’t about risk and survival but about what can be proved using a certain set of methods. What cannot be proved is left out. Put the science where it belongs and know the limits of science beforehand. There are many areas where we take decisions where science cannot help, so it is foolish and unscientific to be scientific about these things rather than using precautionary heuristics. Our job is to formalise a set of rules and heuristics with clearly defined things. Before silent risk, nobody tried the Bourbaki-style to formalise risk management by making everything clearly and explicitly defined and stating what can and what cannot be captured by “models” and what a payoff means. Risk is not science, it is not practice, it is not probability, it is not economics, it is not statistics. Risk is risk, a discipline on its own, with its own rigor. As a discipline it is formalisation. Read more