Santoli’s summary of Taleb’s critique of modern finance should be skipped if you’re already familiar with the arguments. http://finance.yahoo.com/blogs/michael-santoli/gold-not-anti... Instead, go directly to the linked paper. https://docs.google.com/file/d/0B_31K_MP92hURjZxTkxUTFZnMVk/...Even if you got no further than high-school algebra (but do have some stats background), Taleb’s math isn’t hard to understand if you just slow down and look at it, one equation, one graph, at a time. The reason for doing so is this. Modern Portfolio Theory is nonsense that will get you into trouble. For the sake of managing your risks, you need to understand not only why this is so, but you need understand it well enough that you can reproduce the crucial experiments with your own data. Otherwise, you're just trading one set of untested beliefs for another. Not a smart thing to do. Alternatively, if you really do need a more intuitive approach to risk-management, just stop over-betting your hand and, also, chop your left-hand tails. You might not understand why those are Good Things To Do. But you’ll receive their benefits the next time that markets and prices go crazy, for suffering less damage to your portfolio than your ignorant, foolhardy, math-phobe peers. Charlie
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