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By Root 6888 0

At Empirica, there is no feedback. “It’s like you’re playing the piano for ten years and you still can’t play ‘Chopsticks,’ ” Spitznagel say, “and the only thing you have to keep you going is the belief that one day you’ll wake up and play like Rachmaninoff.” Was it easy knowing that Niederhoffer — who represented everything they thought was wrong — was out there getting rich while they were bleeding away? Of course it wasn’t. If you watched Taleb closely that day, you could see the little ways in which the steady drip of losses takes a toll. He glanced a bit too much at the Bloomberg. He leaned forward a bit too often to see the daily loss count. He succumbs to an array of superstitious tics. If the going is good, he parks in the same space every day; he turned against Mahler because he associates Mahler with the last year’s long dry spell. “Nassim says all the time that he needs me there, and I believe him,” Spitznagel says. He is there to remind Taleb that there is a point to waiting, to help Taleb resist the very human impulse to abandon everything and stanch the pain of losing. “Mark is my cop,” Taleb says. So is Pallop: he is there to remind Taleb that Empirica has the intellectual edge.

“The key is not having the ideas but having the recipe to deal with your ideas,” Taleb says. “We don’t need moralizing. We need a set of tricks.” His trick is a protocol that stipulates precisely what has to be done in every situation. “We built the protocol, and the reason we did was to tell the guys, Don’t listen to me, listen to the protocol. Now, I have the right to change the protocol, but there is a protocol to changing the protocol. We have to be hard on ourselves to do what we do. The bias we see in Niederhoffer we see in ourselves.” At the quant dinner, Taleb devoured his roll, and as the busboy came around with more rolls Taleb shouted out, “No, no!” and blocked his plate. It was a never-ending struggle, this battle between head and heart. When the waiter came around with wine, he hastily covered the glass with his hand. When the time came to order, he asked for steak frites — “without the frites, please!” — and then immediately tried to hedge his choice by negotiating with the person next to him for a fraction of his frites.

The psychologist Walter Mischel has done a series of experiments where he puts a young child in a room and places two cookies in front of him, one small and one large. The child is told that if he wants the small cookie he need only ring a bell and the experimenter will come back into the room and give it to him. If he wants the better treat, though, he has to wait until the experimenter returns on his own, which might be anytime in the next twenty minutes. Mischel has videotapes of six-year-olds sitting in the room by themselves, staring at the cookies, trying to persuade themselves to wait. One girl starts to sing to herself. She whispers what seems to be the instructions — that she can have the big cookie if she can only wait. She closes her eyes. Then she turns her back on the cookies. Another little boy swings his legs violently back and forth, and then picks up the bell and examines it, trying to do anything but think about the cookie he could get by ringing it. The tapes document the beginnings of discipline and self-control — the techniques we learn to keep our impulses in check — and to watch all the children desperately distracting themselves is to experience the shock of recognition: that’s Nassim Taleb!

There is something else as well that helps to explain Taleb’s resolve — more than the tics and the systems and the self-denying ordinances. It happened a year or so before he went to see Niederhoffer. Taleb had been working as a trader at the Chicago Mercantile Exchange, and he’d developed a persistently hoarse throat. At first, he thought nothing of it: a hoarse throat was an occupational hazard of spending every day in the pit. Finally, when he moved back to New York, he went to see a doctor, in one of those Upper East Side prewar buildings with a glamorous facade. Taleb sat in the office,