By Boglehead I mean buying low-cost index funds like VT or VTI, not market timing, simple three-fund portfolio, etc. This approach seems to rely on modern portfolio theory and the efficient market hypothesis - both of which Taleb rejects. But it seems to work for the vast majority of people if they stick to it.
Isnt small small losses good? His concept of convexity is lose lose lose and when you win you win big. Similar to the payoff of option buying. Is it the same as prospect theory?
I mean, I get it - Nassim had a lot of cultural capital early on; he was born into an influential family, went to an Ivy League university, and worked on Wall Street. But when did he say to himself, “Okay, I’ve had enough of wealth - now I’m going to spend several hours a day poring over books and writing my own”?
I'm reading book 2 in which Taleb describes how interventionism increases fragility in the system. The example he gave is about companies that are meant to go bankrupt staying afloat through bailouts.
The example that came to my mind is of babies born early or with health defects. Without the current medical infrastructure, these babies wouldn't have been alive in earlier times. Their genes would have been removed from our pool. Saving them adds fragility of our system.
Maybe I have misunderstood what Taleb is saying, but this feels so wrong. I don't think we should stop saving babies because they increase fragility.
What do you all think?
Nassim Taleb said this in an interview with the Wall Street journal back in 2010. This is the article but it is paywalled. Do you believe this is sound advice for someone trying to get their finances in order?