Still in Chapter One of Nassim Taleb’s Fooled by Randomness, we meet Nero Tulip and John the High-Yield Trader as they endure the effects of market randomness.
As Taleb weaves his story, the reader learns of how Nero Tulip, an undergraduate in literature and mathematics, and a Ph.D. in philosophy, ended up first being a quant and then a much less glamorous proprietary trader.
Nero’s fascination with the financial markets started much the same as it did for Chris Gardner (The Pursuit of Happyness), after seeing a fancy car, stopping with tires screeching in the no parking zone, and its driver, a man looking too important for his age. As a student of randomness, Nero saw one of his alternative lives develop before him. Choosing trading over academia was easy.
Nero soon became a hot commodity on Wall Street. But after a few years in the rat race, he realized he was not as power hungry, or power crazy, like the rest of the pack. So he withdrew to the quiet, yet still intellectually challenging job of a proprietary trader.
Everything would have been fine had it not been for his new neighbor, John the High-Yield Trader. Nero’s risk-awareness led him to a comfortable and safe life, but far away from that fancy car that he came to identify with Wall Street. In contrast, John was the very abomination behind the proverbial steering wheel.
Being intellectually superior failed to shield Nero from jealousy, but his vindication came anyway. One September morning in 1998, Nero saw John brooding on his front lawn. Nero immediately knew John lost his job and was not likely to find another one, at least not the one that would pay him exorbitant sums of money for shooting off darts at random and hoping that more hit the board than not.
This is not the end yet; we’ll learn of the moral to this story in the next blog.
