Nassim Nicholas Taleb Quotes Page 4

“It is also related to a problem called denigration of history, as gamblers, investors, and decision-makers feel that the sorts of things that happen to others would not necessarily happen to them.”

“It takes a huge investment in introspection to learn that the thirty or more hours spent 'studying' the news last month neither had any predictive ability during your activities of that month nor did it impact your current knowledge of the world.”

“Many amateurs believe that plants and animals reproduce on a one-way route toward perfection. Translating the idea in social terms, they believe that companies and organizations are, thanks to competition (and the discipline of the quarterly report), irreversibly heading toward betterment.

The strongest will survive; the weakest will become extinct. As to investors and traders, they believe that by letting them compete, the best will prosper and the worst will go learn a new craft (like pumping gas or, sometimes, dentistry).

Things are not as simple as that. We will ignore the basic misuse of Darwinian ideas in the fact that organizations do not reproduce like living members of nature—Darwinian ideas are about reproductive fitness, not about survival.”

“Mathematics is principally a tool to meditate, rather than to compute.”

“Mild success can be explainable by skills and labor. Wild success is attributable to variance.”

“My lesson from Soros is to start every meeting at my boutique by convincing everyone that we are a bunch of idiots who know nothing and are mistake-prone, but happen to be endowed with the rare privilege of knowing it.”

“My principle activity is to tease those who take themselves and the quality of their knowledge too seriously.”

“Never ask a man if he is from Sparta: If he were, he would have let you know such an important fact – and if he were not, you could hurt his feelings.”

“No matter how sophisticated our choices, how good we are at dominating the odds, randomness will have the last word.”

“One cannot judge a performance in any given field (war, politics, medicine, investments) by the results, but by the costs of the alternative (i.e., if history played out in a different way).”

“One conceivable way to discriminate between a scientific intellectual and a literary intellectual is by considering that a scientific intellectual can usually recognize the writing of another but that the literary intellectual would not be able to tell the difference between lines jotted down by a scientist and those by a glib nonscientist.

This is even more apparent when the literary intellectual starts using scientific buzzwords, like 'uncertainty principle', 'Godel’s theorem', 'parallel universe', or 'relativity', either out of context or, as often, in exact opposition to the scientific meaning.

I suggest reading the hilarious Fashionable Nonsense by Alan Sokal for an illustration of such practice (I was laughing so loudly and so frequently while reading it on a plane that other passengers kept whispering things about me).”

“Our emotional apparatus is designed for linear causality. For instance, you study every day and learn something in proportion to your studies.

If you do not feel that you are going anywhere, your emotions will cause you to become demoralized.”

“People do not realize that the media is paid to get your attention. For a journalist, silence rarely surpasses any word.”

“People overvalue their knowledge and underestimate the probability of their being wrong.”

“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.”

“Realism is punishing. Probabilistic skepticism is worse.”

“Reality is far more vicious than Russian roulette. First, it delivers the fatal bullet rather infrequently, like a revolver that would have hundreds, even thousands of chambers instead of six. After a few dozen tries, one forgets about the existence of a bullet, under a numbing false sense of security.

Second, unlike a well-defined precise game like Russian roulette, where the risks are visible to anyone capable of multiplying and dividing by six, one does not observe the barrel of reality. One is capable of unwittingly playing Russian roulette – and calling it by some alternative 'low risk' game.”

“The epiphany I had in my career in randomness came when I understood that I was not intelligent enough, nor strong enough, to even try to fight my emotions.”

“The only article Lady Fortuna has no control over is your behavior. Good luck.”

“The problem with information is not that it is diverting and generally useless, but that it is toxic.”

“The quality of a decision cannot be solely judged based on its outcome.”

“The scientist’s behavior while facing the refutation of his ideas has been studied in depth as part of the so-called attribution bias. You attribute your successes to skills, but your failures to randomness.

This explains why these scientists attributed their failures to the 'ten sigma' rare event, indicative of the thought that they were right but that luck played against them.

Why? It is a human heuristic that makes us actually believe so in order not to kill our self-esteem and keep us going against adversity.”

“The virtue of capitalism is that society can take advantage of people’s greed rather than their benevolence, but there is no need to, in addition, extol such greed as a moral (or intellectual) accomplishment (the reader can easily see that, aside from very few exceptions like George Soros, I am not impressed by people with money).”

“There is a simple test to define path dependence of beliefs (economists have a manifestation of it called the endowment effect). Say you own a painting you bought for $20,000, and owing to rosy conditions in the art market, it is now worth $40,000.

If you owned no painting, would you still acquire it at the current price? If you would not, then you are said to be married to your position. There is no rational reason to keep a painting you would not buy at its current market rate — only an emotional investment.

Many people get married to their ideas all the way to the grave. Beliefs are said to be path dependent if the sequence of ideas is such that the first one dominates.”

“There is a Yiddish saying: If I am going to be forced to eat pork, it better be of the best kind.”

“There is asymmetry. Those who die do so very early in the game, while those who live go on living very long.

Whenever there is asymmetry in outcomes, the average survival has nothing to do with the median survival.”

“This high-yield market resembles a nap on a railway track.”

“This is one of the many reasons that journalism may be the greatest plague we face today — as the world becomes more and more complicated and our minds are trained for more and more simplification.”

“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.”

“Too much success is the enemy, too much failure is demoralizing.”