>Wasn't "The Black Swan" one of your earlier book recommendations? I read a good magazine article recently about why the markets crashed last year and the author was featured. He didn't sound like a very likable guy but he certainly seems to have had a better handle on the market than the "geniuses" who steered us into this mess. (He said the three best years he has had investing in the market have been 1987, the year of the dot-com bust, and last year). In a nutshell he says risk management models fail because they don't account for that 1% of occurrences which fall outside the bell shaped curve -- what he calls the black swan.
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>Just found a link to the article --
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>http://www.nytimes.com/2009/01/04/magazine/04risk-t.html?_r=1&scp=3&sq=joseph%20nocera&st=cse


I saw him interviewed on CNBC and he was pleasant enough but his writing style is somewhat eccentric, perhaps arrogant, which I think puts some people off. Personally I look past that and try to get at the basic content of what he says. I find it fascinating and, yes, the Black Swan describes the extreme event which is unlikely but does occur and creates very significant effects when it does.

Stock market crashes like 87 and the current one are his Black Swans. He trading stratgey is designed to take advantage of those crashes but obviously no one knows when they will occur so he can have a lot of time during which he does not make money and actually losses small amounts due to the cost of having his strategy active in the market.