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Empirica Capital

Taleb runs Empirica Capital out of an anonymous concrete office park in the woods on the outskirts of Greenwich, Connecticut. His offices consist, principally, of a trading floor about the

size of a Manhattan studio apartment. Taleb sits in one corner, in front of a laptop, surrounded by the rest of his team ” Mark Spitznagel, the chief trader, another trader named Danny Tosto, a programmer named Winn Martin, and a graduate student named Pallop Angsupun. Mark

Spitznagel is perhaps thirty ” Winn, Danny, and Pallop look as if they belong in high school. The room has an overstuffed bookshelf in one corner, and a television muted and tuned to CNBC. There are two ancient Greco-Syrian heads, one next to Taleb`s computer and the other, somewhat bafflingly, on the floor, next to the door, as if it were being set out for the trash. There is almost nothing on the walls, except a slightly battered poster for an exhibition of Greek artifacts, the snapshot of the mullah, and a small pen-and-ink drawing of the patron saint of Empirica Capital, the philosopher Karl Popper.

On a recent spring morning, the staff of Empirica were concerned with solving a thorny problem, having to do with the relation between the square root of n ” where n is a given number of random sets of observations ” and a speculator`s confidence in his estimates. Taleb was up at a whiteboard by the door, his marker squeaking furiously as he scribbled possible solutions. Spitznagel and Pallop looked on intently. Spitznagel is a blond Midwesterner and does yoga; in contrast to Taleb, he exudes a cer-tain laconic levelheadedness. In a bar, Taleb would pick a fight. Mark would break it up. Pal-lop is of Thai extraction and is doing a Ph.D. in financial engineering at Princeton. He has longish black hair, and a slightly quizzical air. Pallop is very lazy, Taleb will remark, to no one in particular, several times over the course of the day, although this is said with such affection that it suggests that laziness, in the Talebian nomenclature, is a synonym for genius. Pallop`s computer was untouched and he often turned his chair around, so that he faced away from his desk. He was reading a book by the cognitive psychologists Amos Tversky and Daniel Kahneman, whose arguments, he said a bit disappointedly, were not really quantifiable. The three argued about the solution. It appeared that Taleb might be wrong, but before the matter could be resolved the markets opened. Taleb re-turned to his desk and began to bicker with Mark about what exactly would be put on the company sound system. Mark plays the piano and the French horn and has appointed himself the Empirica d.j. He wanted to play Mahler; and Taleb does not like Mahler. Mahler is not good for volatility, Taleb complained. Bach is good ” the St. Matthew Passion! Taleb gestured to- ward Spitznagel, who was wearing a gray woolen turtleneck. Look at him. He wants to be like von Karajan, like someone who wants to live in a castle. Technically superior to the rest of us. No chitchatting! Top skier! That`s Mark! As Mark rolled his eyes, a man whom Taleb refers to, somewhat mysteriously, as Dr. Wu wandered in. Dr. Wu works for another hedge fund, down the hall, and is said to be brilliant. He is thin and squints through black-rimmed glasses. He was asked his opinion on the square root of n but declined to answer. Dr. Wu comes here for intellectual kicks and to borrow books and to talk music with Mark, Taleb explained after their visitor had drifted away. He added darkly, Dr. Wu is a Mahlerian.