July 16, 2009 
In this hour-long interview, Nassim Taleb, originator of the Black Swan hypothesis, argues that investors give too little weight to the risk of statistical “outliers.” He says that the odds that unlikely events will occur are greater, and their impact is greater, than investors generally perceive. Daniel Kahneman, well-known authority on behavioral finance, agrees with Taleb’s thesis but argues that the human need for certainty and security will prevent people from perceiving risk differently. This conversation on perceived risk is especially interesting given the backdrop of the recent upheavals in global financial markets. A personal note: Once I got past the first ten minutes, I found the remainder of this hour-long interview intriguing. The video offers, from an odd quarter, a point of view supporting my typical financial planning advice to avoid excessive portfolio risk and avoid or pay off most indebtedness. It’s worth a listen if you have the time. Click here for the video.
