I had a co-worker who took Taleb way too seriously. Any time I used the word “because” in the context of market moves, he would condemn me with the phrase “narrative fallacy.” Here is a sample dialogue:
him: “how’s it going?”
me: “the S&Ps are really whipping around because the fed just did a surprise cut.”
him: “narrative fallacy!!”
He just didn’t really get that even though there are a ton of invalid narratives in the financial markets (just turn on CNBC and you hear them non-stop) that doesn’t mean that there aren’t valid narratives sometimes also.
I had a co-worker who took Taleb way too seriously. Any time I used the word “because” in the context of market moves, he would condemn me with the phrase “narrative fallacy.” Here is a sample dialogue:
him: “how’s it going?” me: “the S&Ps are really whipping around because the fed just did a surprise cut.” him: “narrative fallacy!!”
He just didn’t really get that even though there are a ton of invalid narratives in the financial markets (just turn on CNBC and you hear them non-stop) that doesn’t mean that there aren’t valid narratives sometimes also.