Scott Patterson’s Chaos Kings, Part 1″ YouTube video, Scott discusses his latest book inspired by Nassim Taleb and Martin Baum’s experiences during the COVID-19 pandemic. Taleb, known for his Black Swan theory, earned significant profits from Universa , his hedge fund, during the market crash. The speakers debate the existence of market timing and Universa’s investment strategy, which acts as insurance against large market declines. They also discuss the importance of recognizing the exponential nature of pandemics and the need for proactive risk management. Taleb emphasizes the importance of execution in tail risk hedge funds and the difference between traditional risk management approaches and Universa’s methods. The speakers also touch on the concept of risk management in the context of unforeseen events and the importance of considering higher-level risks.
In Part 2 Patterson expands the scope beyond finance to cover various domains of extreme risk, including climate change, AI, Bitcoin, and the pandemic. He shares his disagreement with his editor about the book’s focus and introduces the concept of the “Turkey Problem,” a metaphor for Black Swan events. Patterson also discusses his encounters with influential figures like French mathematician Mandelbrot and his influence on Patterson’s understanding of financial markets.