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Alan Liddle
One look at his current or past academic titles, such as Distinguished Professor of Risk Engineering and Dean’s Professor in the Sciences of Uncertainty, tells you that best-selling author Nassim Nicholas Taleb, a former institutional trader ofDerivativesStrategy.com Hall of Fame stature, isn’t taking the conventional route while ruminating on randomness, his passionate pursuit.
Taleb on Oct. 5 will share his ruminations in a speech titled “The Future Has Always Been Crazier Than We Thought” during the 50th Annual Nation’s Restaurant News Multi-Unit Foodservice Operators, or MUFSO, conference at the Hilton Anatole Hotel in Dallas. Learn more about Taleb and the conference atwww.mufso.com , where an extended audio stream of the following edited transcript will be posted.
What is the best way for a restaurateur who has not read your book, “The Black Swan,” to get his arms around its premise?
The “black swan” is a high-impact, unexpected event that shakes things up. It’s not likely to occur, but that is irrelevant because when it happens it carries massive consequences. I showed in my book that most events in history that really matter are black swans. The Internet is a black swan. The first Great War is a black swan. The discovery of penicillin is a black swan. The first use of the wheel is a black swan. We have this inability to understand the future because we don’t really realize that the future will be dominated by these black swans and many of them are unpredictable.
FAST FACTS
EDUCATION: Ph.D., management science, University of Paris; master of business administration, Wharton School, University of PennsylvaniaYEAR OF BIRTH: 1960HOMETOWN: Amioun, LebanonWEBSITE:www.fooledbyrandomness.com
How should the restaurant industry prepare for 2009 and beyond?
I think the restaurant industry will be faced with challenges in commodity prices.
Where should restaurateurs be looking for clues about the state of tomorrow’s economy?
I keep warning people to not look for clues because the economy has confused economists. You cannot take economic forecasters very seriously. My policy has been to show people how to be resistant to different economic scenarios and how to project this type of scenario and that type of scenario, and to make sure that even in the bad scenarios you don’t do too terribly and in the good scenarios you do extremely well.
What will be the thrust of your presentation at MUFSO?
I’ll present my idea of how history is dominated by the unpredictable [and] describe the mistakes made by people who project the future without realizing that if you don’t take into account the black swan, you’ve got nothing. Then I’ll discuss the psychological mistakes people tend to make in decision making. For example: overplanning. I will talk about what I call extreme events, which environments are prone to extreme events and how commodities can take on extreme values. I [also] will discuss complexity. We have too much interdependence [today].We buy toys from China, and this causes China to buy hamburgers and causes the hamburger sellers to buy computers, and therefore we have this very complicated web of interrelationships that makes things completely unpredictable. Finally, what should you do in a world like that. Of course [there will be] some recommendations at the end adapted to the latest environment.
