Either you didn't read the books, or I'm afraid you completely missed the point.
His investment advice is to invest most of your money (say 80%) in T-bills, and the rest in speculative investments (Taleb does it through derivatives). The rationale is that most of your cash is protected (short of a government default) albeit making modest returns. So you'll never spectacularly "blow up"... but you also have the upside exposure to good "black swan" events in your speculative investments.
Well, I saw him give a talk in February at a Long Now Seminar, and I asked him: "How should people invest if they aren't derivatives traders?"
And he said: "Don't invest."
I have read his books and I am familiar with his barbell strategy. Are you really suggesting that he recommends the common man to invest in derivatives and such?
Very interesting - I've often wondered what the rest of us can learn from Taleb's advice.
I've seen a slightly more watered down approach at use. Put 60-70% of your money in government bonds (regular and inflation-indexed), and the other rest in US small-cap value stocks, international small-cap value stocks, and emerging market stocks. These sectors have been more volatile, but with higher returns, over the last 80 years. Historically, this portfolio would perform about as well as an 80/20 stock/bond split. And if the market drops 90%, you still have 60%+ of your money safe.
I'm not convinced that this is the way to go, but it is interesting.
I've thought a lot about it too. Investing in "extremistan" - the stock-ticker price of a stock is dangerous. If you are a buyer and seller of stocks, then a 90% drop in the market is a disaster.
But if you are a buy-and-holder (i.e. a buyer of future cash flows), then a 90% drop in the market is a great thing - you can buy a lot more company that before. Regardless of how the market moves, you will still be acquiring an ever-growing % of whatever company you are looking at.
And you have dollar cost averaging working in your favor as well, so you are guaranteed to do at least a little better than average.
His investment advice is to invest most of your money (say 80%) in T-bills, and the rest in speculative investments (Taleb does it through derivatives). The rationale is that most of your cash is protected (short of a government default) albeit making modest returns. So you'll never spectacularly "blow up"... but you also have the upside exposure to good "black swan" events in your speculative investments.