Real World Risk – Nassim Taleb

Teacher

Chairman

About Course

THE MISSION AND THE MINI-CERTIFICATE
IN REAL WORLD RISK (TAKING)
On Friday October 2, 2015, a few like-minded people got together in the New York area to form the Real World Risk Institute, LLC.

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The mission statement summarized by “real world” can be expressed more directly as:
Understand model error before you use a model
To talk the talk you also need to walk the walk
Data Science without overcomplications and sophisty
How to do risk analysis without the nonsense
When and if we model, we go from reality to models not from models to reality

Take risks you understand, don’t try to understand risks you are taking
Risk education should not aim at impressing a regulator but developing real-life competence
Summary: We are about risk taking (front office) not just something called “risk management” (back office), which should never be separated from decision-making. Some academo-bureaucrats with something to prove have an incentive to make things look complicated, while real world risk takers with skin in the game do not have such insecurity; they are not ashamed of making those things that are simple simple! The real world require vastly more rigor than textbooks and it is a different type of rigor. Most of all risk requires maximal clarity of mind.

As of 2019, we have had 500 attendees, more than 20 repeats (one person came back 5 times); a electic composition: about 20 medical doctors, 10 military persons, 3 professional hackers, 11 policy makers, numerous venture capitalists/entrepreneurs, traders, psychologists, bankers, small business owners, social workers, university professors, etc.
We have also granted more than 200 scholarships and financial assistance.
Check #RWRI on Twitter.

The idea is also to revolutionize education by making it closer to the practitioner model. No academic without real word background should teach a subject that has real world implications. In November 2017, after 2 years and six sessions, we decided to hire instructors from past attendees who have real world experience in the work they are teaching.

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The current team includes:
2 risk takers, former full-time traders (with combined experience of more than half a century)
2 persons known to have an attitude problem
5 Phds (quant/math), 3 businessmen, quants and advisors to hedge funds
2 UHNWI (Ultra High Net Worth Individuals)
4 persons who specialize in tail events in both theory and real-life practice
3 are probabilists with deep enough a knowledge of probability to respect practice and explain things with concepts and pictures
In addition to long trading and risk taking careers, they have advised heads of state, central banks, top institutions (such as the IMF), U.S. government agencies, testified in front of U.S. Congress, etc… the whole shebang.

THE MISSION: HOW TO MAKE DECISIONS UNDER UNCERTAINTY
The first aim of the institute is to build the principles and methodology for what we call real-world rigor in decision making and codify a clear-cut way to approach risk.
The second aim is to provide executive education courses and issue two certificates:
A (mini) certificate of no-BS risk management, more politely called: Mini-Certificate in Real World Risk Management along the old apprenticeship model by which experienced professional teaches less-experienced professionals.
An advanced version of the certificate: Mini-Certificate in Real World Risk Analytics with more technical approaches. While we avoid math when we can we do not shy from using the math where needed but only where needed. We believe that it will be the first quantitative program embedded in the real world, seen from both risk-taking and risk-managing perspective.