The turkey statistician

November 10, 2010 in Data,Finance

C links to a Thanksgiving-appropriate essay by Nassim Taleb in which he presents a a story about a turkey statistician. For 100 days, the turkey is fed and cared for by humans. He arrives at the statistically-significant conclusion that humans genuinely care about his well-being. On the 101st day, the turkey is slaughtered.

Most interesting to me is that Taleb wrote the essay on September 15th, 2008 (better known around TGR as "Lehman Day"). It's a great reminder that it didn't take the market crash of October 2008 for some people to realize that there were dangers lurking. Yes, the market was already down nearly 33% at the point, but I'm still shocked to look back and see how little significance was given to that fact at the time. It's easy to look back and realize that market crashes can happen (after all, the turkey wouldn't be surprised about his fate if he had somehow experienced it already) but it's quite a feat to be willing to pound the table about sudden, jarring market moves without empirical cause.

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