Nassim Nicholas Taleb Quotes Page 5

“Try the following experiment. Go to the airport and ask travelers en route to some remote destination how much they would pay for an insurance policy paying, say, a million tugrits (the currency of Mongolia) if they died during the trip (for any reason).

Then ask another collection of travelers how much they would pay for insurance that pays the same in the event of death from a terrorist act (and only a terrorist act).

Guess which one would command a higher price? Odds are that people would rather pay for the second policy (although the former includes death from terrorism). The psychologists Daniel Kahneman and Amos Tversky figured this out several decades ago.”

“Veteran trader Marty O’Connell calls this the firehouse effect. He had observed that firemen with much downtime who talk to each other for too long come to agree on many things that an outside, impartial observer would find ludicrous (they develop political ideas that are very similar).

Psychologists give it a fancier name, but my friend Marty has no training in behavioral sciences.”

“We are not made to view things as independent from each other. When viewing two events A and B, it is hard not to assume that A causes B, B causes A, or both cause each other. Our bias is immediately to establish a causal link.”

“We do not need to be rational and scientific when it comes to the details of our daily life — only in those that can harm us and threaten our survival.

Modern life seems to invite us to do the exact opposite; become extremely realistic and intellectual when it comes to such matters as religion and personal behavior, yet as irrational as possible when it comes to matters ruled by randomness (say, portfolio or real estate investments).

I have encountered colleagues, 'rational', no-nonsense people, who do not understand why I cherish the poetry of Baudelaire and Saint-John Perse or obscure (and often impenetrable) writers like Elias Canetti, J. L. Borges, or Walter Benjamin.

Yet they get sucked into listening to the 'analyses' of a television 'guru', or into buying the stock of a company they know absolutely nothing about, based on tips by neighbors who drive expensive cars.”

“We favor the visible, the embedded, the personal, the narrated, and the tangible; we scorn the abstract.”

“We flipped a coin to see who was going to pay for the meal. I lost and paid.

He was about to thank me when he abruptly stopped and said that he paid for half of it probabilistically.”

“Wealth does not count so much into one’s well-being as the route one uses to get to it.”

“When things go our way we reject the lack of certainty.”

“A BS detection heuristic would be to use education in reverse: hire, conditional on an equal set of skills, the person with the least label-oriented education.

It means that the person had to succeed in spite of the credentialization of his competitors and overcome more serious hurdles. In addition, people who didn’t go to Harvard are easier to deal with in real life.”

“A saying by the brothers Geoff and Vince Graham summarizes the ludicrousness of scale-free political universalism. I am, at the Fed level, libertarian; at the state level, Republican; at the local level, Democrat; and at the family and friends level, a socialist.”

“Alexander said that it was preferable to have an army of sheep led by a lion than an army of lions led by a sheep.”

“Alexander the Magnus was once called to solve the following challenge in the Phrygian city of Gordium (as usual with Greek stories, in modern-day Turkey). When he entered Gordium, he found an old wagon, its yoke tied with a multitude of knots, all so tightly entangled that it was impossible to figure out how they were fastened.

An oracle had declared that he who would untie the knot would rule all of what was then called 'Asia', that is, Asia Minor, the Levant, and the Middle East. After wrestling with the knot, the Magnus drew back from the lump of gnarled ropes, then made a proclamation that it didn’t matter for the prophecy how the tangle was to be unraveled. He then drew his sword and, with a single stroke, cut the knot in half.

No 'successful' academic could ever afford to follow such a policy. And no Intellectual Yet Idiot. It took medicine a long time to realize that when a patient shows up with a headache, it is much better to give him aspirin or recommend a good night’s sleep than do brain surgery, although the latter appears to be more 'scientific'. But most 'consultants' and others paid by the hour are not there yet.”

“An honest person will never commit criminal acts, but a criminal will readily engage in legal acts.”

“Avoid taking advice from someone who gives advice for a living, unless there is a penalty for their advice.”

“Because what matters in life isn’t how frequently one is 'right' about outcomes, but how much one makes when one is right. Being wrong, when it is not costly, doesn’t count — in a way that’s similar to trial-and-error mechanisms of research.”

“Beware of the person who gives advice, telling you that a certain action on your part is 'good for you' while it is also good for him, while the harm to you doesn’t directly affect him.”

“Bureaucracy is a construction by which a person is conveniently separated from the consequences of his or her actions.”

“Courage is the only virtue you cannot fake.”

“Decentralization is based on the simple notion that it is easier to macrobullsh*t than microbullsh*t. Decentralization reduces large structural asymmetries.”

“Don’t tell me what you think, tell me what you have in your portfolio.”

“English 'manners' were imposed on the middle class as a way of domesticating them, along with instilling in them the fear of breaking rules and violating social norms.”

“Entrepreneurs are heroes in our society. They fail for the rest of us.”

“Formation of moral values in society doesn’t come from the evolution of the consensus. No, it is the most intolerant person who imposes virtue on others precisely because of that intolerance.”

“Freedom is always associated with risk taking, whether it leads to it or comes from it.”

“Having an assistant (except for the strictly necessary) removes your soul from the game.”

“How much you truly 'believe' in something can be manifested only through what you are willing to risk for it.”

“If you do not take risks for your opinion, you are nothing.”

“If you want to study classical values such as courage or learn about stoicism, don’t necessarily look for classicists. One is never a career academic without a reason.

Read the texts themselves: Seneca, Caesar, or Marcus Aurelius, when possible. Or read commentators on the classics who were doers themselves, such as Montaigne – people who at some point had some skin in the game, then retired to write books.

Avoid the intermediary, when possible. Or fuhgetaboud the texts, just engage in acts of courage.”

“If your private life conflicts with your intellectual opinion, it cancels your intellectual ideas, not your private life.”

“In real life, every single bit of risk you take adds up to reduce your life expectancy. If you climb mountains and ride a motorcycle and hang around the mob and fly your own small plane and drink absinthe, and smoke cigarettes, and play parkour on Thursday night, your life expectancy is considerably reduced, although no single action will have a meaningful effect.

This idea of repetition makes paranoia about some low-probability events, even that deemed 'pathological', perfectly rational.”