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.
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

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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.

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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.

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:

  1. 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.
  2. 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.

The Team

Usually at least 4 instructors (up to 8) participate in each session, interacting with one another and the participants.

Nassim Nicholas Taleb

(Former) option trader, now self-owned scholar who engages in a multidisciplinary no-nonsense approach to probability. He is known for his BS-busting, his intolerance for fake research and his multivolume Incerto (The Black Swan, Antifragile, and Fooled by Randomness). He has completed 600,000 option trades and now specializes in the mitigation of tail risk.

Robert J. Frey

An applied mathematician of the no-nonsense variety, hedge fund trader and former partner of Renaissance Technologies. Currently runs a fund of hedge funds and professor at Stony Brook.

Raphael Douady

Frey Family Chair Professor (the same Frey as before) in the applied mathematics department at Stony Brook; he has two decades experience as a quant and founder of a risk software firm.

Instructors

COMPLIANCE/FRAUD: Tom Messina, former attendee, currently compliance officer at a bank. INSURANCE: Reinsurance practitioners with P/L (not quants/modelers). COMPLEXITY: Joe Norman, former attendee and complex system modeler. COMPUTATIONAL COMPLEXITY: Trishank Karthik Kuppusamy, computer scientist and past attendee. OTHER RISKS: Various practitioners. Only practitioners, of course.

Program Coordinator: Alicia Bentham-Williams

THE MINI-CERTIFICATE IN REAL WORLD RISK*

*Risk taking not risk management

NEXT 1-WEEK INTENSE WORKSHOP

Number 13: Feb. 24-28 2020

Nassim Nicholas Taleb will deliver about 60% of the lectures and sign the certificate

2 day program (no mini-certificate), $2950* 5 day program (with mini-certificate), $7400* (Early signup discount $2200 and $5900 respectively before Jan 25, 2020) Contact: Alicia Bentham-Williams, alicia@realworldrisk.com, info@realworldrisk.com

Includes breakfast and lunch.

Note: Discussions include minimal equations, but a lot of concepts, graphs, and pictures

The 2-day program is standalone; the 5-day program (with mini-certificate) adds 3 days of deeper and more complete coverage of the topics. [Note that it is not so much lecture classroom style: in addition to the lecturer, we hve usually at least 2 other instructors present and commenting at the same time, to have a conversation] Who is this mini-certificate for? - Risk professionals and analysts interested in how what they know applies to the real word - Professional risk takers (with some basic familiarity with technical language) willing to gain perspective and understand how to use the research without falling into model error - Generally curious people with some risk experience wanting to understand fragility, antifragility and probability problems in an interactive environment.