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The same past data can confirm a theory and its exact opposite! If you survive until tomorrow, it could mean that either a) you are more likely to be immortal or b) that you are closer to death.
We glorify those who left their names in history books at the expense of those contributors about whom our books are silent. We humans are not just a superficial race - we are a very unfair one.
When you ask people, 'What's the opposite of fragile?,' they tend to say robust, resilient, adaptable, solid, strong. That's not it. The opposite of fragile is something that gains from disorder.
A washing machine needs constant maintenance. It doesn't want any harm. It wants tranquility, and you need someone to - you're not going to harm it by continuously monitoring it and adjusting it.
We should probably stop trading derivatives, anything more complex than regular options ... I am an options trader, and I don't understand options. How do you want a regulator to understand them?
They think that intelligence is about noticing things are relevant (detecting patterns); in a complex world, intelligence consists in ignoring things that are irrelevant (avoiding false patterns)
We tend to treat our knowledge as personal property to be protected and defended. It is an ornament that allows us to rise in the pecking order. [...] We take what we know a little too seriously.
My nightmare scenario is that the government saves Citibank once again, as well as the other banks, and business resumes as usual. Then, the next time the system breaks, it breaks much, much bigger.
Don't read newspapers for the news (just for the gossip and, of course, profiles of authors). The best filter to know if the news matters is if you hear it in cafes, restaurants... or (again) parties.
The best way to measure the loss of intellectual sophistication - this "nerdification," to put it bluntly - is in the growing disappearance of sarcasm, as mechanic minds take insults a bit too literally.
Don't disturb complicated systems that have been around for a very long time. We don't understand their logic. Don't pollute the planet. Leave it the way we found it, regardless of scientific 'evidence'.
Categorizing is necessary for humans, but it becomes pathological when the category is seen as definitive, preventing people from considering the fuzziness of boundaries, let alone revising their categories.
Also, it's good to have more than one profession, in case your own profession goes out of style. A Wall Street trader who's also a belly dancer will do a lot better than a trader who winds up driving a taxi.
I select a very small number of things to be sceptical about, such as markets, and on these I am hypersceptic. But I want to be fooled by randomness in art. I want the ceremonial of religion; we are made for it.
Scientists may be in the business of laughing at their predecessors, but owing to an array of human mental dispositions, few realize that someone will laugh at their beliefs in the (disappointingly near) future.
When you develop your opinions on the basis of weak evidence, you will have difficulty interpreting subsequent information that contradicts these opinions, even if this new information is obviously more accurate.
Probability is not a mere computation of odds on the dice or more complicated variants; it is the acceptance of the lack of certainty in our knowledge and the development of methods for dealing with our ignorance.
He who has never sinned is less reliable than he who has only sinned once. And someone who has made plenty of errors-though never the same error more than once-is more reliable than someone who has never made any.
Dress your best on your execution day. Be extremely courteous to your assistant when you lose money. Try not to blame others for your fate, even if they deserve blame. Never exhibit any self-pity. Do not complain.
Read books are far less valuable than unread ones. The library should contain as much of what you do not know as your financial means, mortgage rates, and the currently tight real-estate market alow you to put there.
We know from chaos theory that even if you had a perfect model of the world, you'd need infinite precision in order to predict future events. With sociopolitical or economic phenomena, we don't have anything like that.
In social policy, when we provide a safety net, it should be designed to help people take more entrepreneurial risks, not to turn them into dependents. This doesn't mean that we should be callous to the underprivileged.
In politics we face the choice between warmongering, nation-state loving, big-business agents on one hand; and risk-blind, top-down, epistemic arrogant big servants of large employers on the other. But we have a choice.
I disagree with the followers of Marx and those of Adam Smith: the reason free markets work is because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or "incentives" for skill.
People who forecast simply because "that's my job," knowing pretty well that their forecast is ineffectual, are not what I would call ethical. What they do is no different from repeating lies simply because "it's my job."
Wear your best for your execution and stand dignified. Your last recourse against randomness is how you act - if you can't control outcomes, you can control the elegance of your behaviour. You will always have the last word.
It is remarkable how fast and how effectively you can construct a nationality with a flag , a few speeches, and a national anthem; to this day I avoid the label "Lebanese," preferring the less restrictive "Levantine" designation.
The number of managers with great track records in a given market depends far more on the number of people who started in the investment business (in place of going to dental school), rather than on their ability to produce profits.
We are victims of the post-Enlightenment view that the world functions like a sophisticated machine, to be understood like a textbook engineering problem and run by wonks. In other words, like a home appliance, not like the human body.
The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deemed these events "unlikely."
Nature builds things that are antifragile. In the case of evolution, nature uses disorder to grow stronger. Occasional starvation or going to the gym also makes you stronger, because you subject your body to stressors and gain from them.
History is opaque. You see what comes out, not the script that produces events, [...] The generator of historical events is different from the events themselves, much as the minds of the gods cannot be read just by witnessing their deeds.
If you roll dice, you know that the odds are one in six that the dice will come up on a particular side. So you can calculate the risk. But, in the stock market, such computations are bull - you don't even know how many sides the dice have!
Work hard, not in grunt work, but in chasing such opportunities and maximizing exposure to them. This makes living in big cities invaluable because you increase the odds of serendipitous encounters-you gain exposure to the envelope of serendipity.
If you are an Arabic-speaking, Greek-Orthodox going to a French school it makes you deeply sceptical if you have to listen to three different accounts of the Crusades - one from the Muslim side, one from the Greek side and one from the Catholic side.
The Internet allows the small guy a global marketplace. But technology is harmful in the sense that we get too much information from it. Because of the web we get 10 times the amount of noise we ever got, which makes harmful fallacies far more likely.
An elephant is vastly more efficient, metabolically, than a mouse. It's the same for a megacity as opposed to a village. But an elephant can break a leg very easily, whereas you can toss a mouse out of a window and it'll be fine. Size makes you fragile.
Philosophers talk about truth and falsehood. People in life talk about payoff, exposure, and consequences (risks and rewards), hence fragility and antifragility. And sometimes philosophers and thinkers and those who study conflate Truth with risks and rewards.
I've debated many economists who claim to specialize in risk and probability: when one takes them slightly outside their narrow focus, but within the discipline of probability, they fall apart, with the disconsolate face of a gym rat in front of a gangster hit man.
By setting oneself totally free of constraints, free of thoughts, free of this debilitating activity called work, free of efforts, elements hidden in the texture of reality start staring at you; then mysteries that you never thought existed emerge in front of your eyes.
Those who were unlucky in life in spite of their skills would eventually rise. The lucky fool might have benefited from some luck in life; over the longer run he would slowly converge to the state of a less-lucky idiot. Each one would revert to his long-term properties.
Cumulative errors depend largely on the big surprises, the big opportunities. Not only do economic, financial, and political predictors miss them, but they are quite ashamed to say anything outlandish to their clients and yet events, it turns out, are almost always outlandish.
I suppose that the main benefit of being rich (over just being independent) is to be able to despise rich people (a good concentration of whom you find in glitzy ski resorts) without any sour grapes. It is even sweeter when these farts don't know that you are richer than they are.
There is a certain category of fool-the overeducated, the academic, the journalist, the newspaper reader, the mechanistic scientist, the pseudo-empiricist, those endowed with what I call epistemic arrogance, this wonderful ability to discount what they did not see, the unobserved.
People have the problem of denial. This is one of the things I learned in Lebanon. Everybody who left Beirut when the war started, including my parents, said, 'Oh, its temporary.' It lasted 17 years! People tend to underestimate the gravity of these situations. That's how they work.
We have this culture of financialization. People think they need to make money with their savings rather with their own business. So you end up with dentists who are more traders than dentists. A dentist should drill teeth and use whatever he does in the stock market for entertainment.
Much of the research into humans' risk-avoidance machinery shows that it is antiquated and unfit for the modern world; it is made to counter repeatable attacks and learn from specifics. If someone narrowly escapes being eaten by a tiger in a certain cave, then he learns to avoid that cave.
There is no effective difference between guessing a variable that is not random, but for which information is partial or deficient, and a random one. In this sense, guessing (what I don't know, but what someone else may know) and predicting (what has not taken place yet) are the same thing.
If I ask you to write down the last 4 digits of your social security number, and then take you out to lunch and ask you how many dentists there are in Manhattan, there's going to be a high correlation between those two numbers. What happens is that the number psychologically makes you feel confident.
Economic life should be definancialised. We should learn not to use markets as storehouses of value: they do not harbour the certainties that normal citizens require. Citizens should experience anxiety about their own businesses (which they control), not their investments (which they do not control).