theorywatch

Here’s a quote from a piece in Fortune from Black Swan author Nassim Nicholas Taleb lambasting the popularity of financial engineering models:

“We like models because they do not require experience and can be taught by a 33-year-old assistant professor.”

that I like almost as much as the classic one from George Box (“All models are wrong, but some models are useful.”)

Taleb is talking specifically about portfolio theory models taught in b-school, but I suspect that his statement can be applied much more widely than that, hmm? (For instance, how about IBM’s new algorithms for monitoring and managing natural disasters?) On the other hand, without any models, all we’d have is endless empirical data, which would require an awful lot of “experience” to sort out…. although I have (ahem) a bit more experience than a 33 year-old assistant professor, I’d vastly prefer having some good models with which to teach!