Nassim Nicholas Taleb: prediction

Transcript context

…Putin of Russia, fragile or antifragile? I did a study on countries when we wanted to look at . . . There is metrics in this town [Washington, D.C. ]of predicting stability of countries based on past stability, which to me is absurd because the metric would tell you that Saudi Arabia, when you’re right at the black swan actually, I came here, I told him. I said I took seven countries, same government for 40 years, 40 governments in 40 years. Which country is more stable? Two sets of countries on the right, one on the left. They said the one that has the same government, same families actually — people here in this town, at the Wilson Center. I said that these guys have things backward. The countries on the right were Syria and Saudi Arabia. Now, we’re, so far, waiting for a second shoe to drop. The other one was Italy. Last time I checked, Italy was still standing, and the mozzarella was excellent. [laughter] The idea of countries that have too much stability become weaker, particularly if it’s propped up, sort of like companies. You see companies that go bust, you get companies that have zero volatility, compressed volatility. Many of them really should have a little volatility, but some of them would be sitting on dynamite. You’re smoothing to cover things up, right?…

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