Taleb Quotes

What investors don't know can matter far more than what they think they know—a timely reminder for digital-asset markets where volatility and sudden regime shifts remain the norm. - Nassim Nicholas Taleb

Mediocristan risks are subjected to the Chernoff bound. The Chernoff bound can be explained as follows. The probability that the number of people who drown in their bathtubs in the United States doubles next year—assuming no changes in population or bathtubs—is one per several trillions lifetimes of the universe. This cannot be said about the doubling of the number of people killed by terrorism

You must invest in preparedness and not in prediction

If you change your mind too frequently, it suggests that you do not think carefully and responsibly before formulating an opinion & don't know when to remain silent or neutral. If you never change your mind on anything, it indicates that you are an intellectually dishonest.

There are two types of people: those who try to win and those who try to win arguments. They are never the same.

The opposite of education is not ignorance; it is education in social science.

To see if a book is real, ask 10 people of different backgrounds & professions to summarize it. If the summaries are similar, the book will not survive as it can be shortened to a journal article. The more the summaries diverge, the higher the dimensionality of the book.

Missing a train is only painful if you run after it! Likewise, not matching the idea of success others expect from you is only painful if that’s what you are seeking.

The difference between technology and slavery is that slaves are fully aware that they are not free.

A Stoic is someone who transforms fear into prudence, pain into transformation, mistakes into initiation, and desire into undertaking.

It is my great hope someday, to see science and decision makers rediscover what the ancients have always known. Namely that our highest currency is respect.”

A private library is not an ego-boosting appendage but a research tool. 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 allow

Changing your mind once about a theory, an investment, or a person, is healthy. Changing your mind twice is not.

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.

What matters isn’t what a person has or doesn’t have; it is what he or she is afraid of losing.

To be insurable, events must be non-subexponential i.e. the probability of exceeding some threshold must be due to a series of small events rather than a single large event. The Cramer condition must also be met (exponential moments of the rv must exist). Normally distributed events meet these conditions, but not thick tailed events.

The Lucretius fallacy is when one assumes the worst event experienced in the past is the worst event that can happen in the future. Because an empirical distribution is necessarily censured by x_min and x_max, the empirical distribution is not empirical. Beyond the observed max, there is a hidden portion of the distribution not shown in past samples whose moments are unknown (and do not converge via the Glivenko-Cantelli theorem). This is a problem for Kolmogorov-Smirnoff tests.

Instability of variances (e.g. finite sample and infinite fourth moment) leads to unstable covariances (meaning individual distributions appear heteroskedastic but the scales don’t change in tandem). If a covariance matrix is stochastic or regime switching (and the correlations are relatively high, not just jumping around 0), then the joint distribution will not be elliptical

If data has no structure, all principal components should explain equal amounts of variance (asymptotically). With small samples, pc’s will spuriously decline in importance. This becomes much worse with thick tailed data i.e. the first few pc’s will appear way more important than they really are (meaning dimension reduction doesn’t work with thick tails and finite samples).

We humans are the victims of an asymmetry in the perception of random events. We attribute our successes to our skills, and our failures to external events outside our control, namely to randomness.

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a “dismal science.” But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

"To be completely cured of newspapers, spend a year reading the previous weeks newspapers." - Nassim Nicholas Taleb in The Bed of Procrustes

"The virtuous worry about their integrity, lesser humans (say, academics) about their reputation." - Nassim Nicholas Taleb

"You need a story to displace a story." - Nassim Nicholas Taleb

"Academia is to knowledge what prostitution is to love; close enough on the surface but, to the nonsucker, not exactly the same thing" -

"They agree that chess training only improves chess skills but disagree that classroom training (almost) only improves classroom skills." -

"The Black Swan asymmetry allows you to be confident about what is wrong, not about what you believe is right." -

"I prefer the company of people who make me smile to those who make me laugh." - Nassim Nicholas Taleb

The impossibility of planning without including elements of flexibility designed to account for unforeseen contingencies, I was reminded of what Nassim Taleb wrote in his book The Black Swan (Random House, 2007): “history does not crawl, it jumps”. Many important discoveries do not come about by careful planning; they arise suddenly and surprisingly,

The growth in available information has been exceeded only by the expansion of noise

Popular opinion warns that bad information is worse than no information at all .

Psychologists have shown that most people prefer to make $ 70,000 when others around them are making $ 60,000 than to make $ 80,000 when others around them are making $ 90,000 .

This high - yield market resembles a nap on a railway track . One afternoon , the surprise train would run you over

I start with the platitude that 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

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 market movements in the eighteen months after September 11 , 2001 , were far smaller than the ones that we faced in the eighteen months prior — but somehow in the mind of investors they were very volatile

Einstein’s remark that common sense is nothing but a collection of misconceptions acquired by age eighteen

A mistake is not something to be determined after the fact , but in the light of the information until that point

“ Satisficing ” was his idea ( the melding together of satisfy and suffice ) :

Note that , unlike economists , they conducted experiments , true controlled experiments of a repeatable nature , that can be done in Ulan Bator , Mongolia , tomorrow if necessary . Conventional economists do not have this luxury as they observe the past and make lengthy and mathematical comments , then bicker with each other about them .

“ My net worth will end up at $ 99,000 or $ 101,500 after the gamble ” or do you say “ I lose $ 1,000 or make $ 1,500 ? ”

There is nothing wrong and undignified with emotions. What is wrong is not following the dignified path What stoicism truly means.

I said that stoicism has rather little to do with the stiff - upper - lip notion that we believe it means. Started as an intellectual movement in antiquity by a Phoenician Cypriot , Zeno of Kition , it developed by Roman time into a life based on a system of virtues — in the ancient sense when virtue meant virtu , the sort of belief in which virtue is its own reward . There developed a social model for a stoic person , like the gentlemen in Victorian England . Its tenets can be summarized as follows : The stoic is a person who combines the qualities of wisdom , upright dealing , and courage.

"The static and the dynamic: how to go bankrupt and be loved by the many—Piketty’s equals"

One may be risk loving yet completely averse to ruin

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

The Black Swan asymmetry allows you to be confident about what is wrong, not about what you believe is right.

This explains the difference between an academic & a real scholar. A person stopped cycling when his odometer ceased to function, waiting for a replacement. He felt his cycling "did not count".

"An erudite is someone who displays less than he knows; a journalist or consultant, the opposite." - Nassim Nicholas Taleb

Regular minds find similarities in stories (and situations); finer minds detect differences." - Nassim Nicholas Taleb

In a conflict, the middle ground is least likely to be correct." - Nassim Taleb

More data such as paying attention to the eye colors of the people around when crossing the street can make you miss the big truck." - Nassim Nicholas Taleb

"Amateurs in any discipline are the best, if you can connect with them. Unlike dilettantes, career professionals are to knowledge what prostitutes are to love." - Nassim Nicholas Taleb

Making sense and being right are not the same ting" (sic) – Fat Tony

"Mild success can be explainable by skills and labor. Wild success is attributable to variance." - Nassim Nicholas Taleb

"The best horses lose when they compete with slower ones, and win against better rivals." - Nassim Nicholas Taleb

The only person with a vested interest in your continued long term success is you.

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

"The curse of modernity is that we are increasingly populated by a class of people who are better at explaining than understanding, or better at explaining than doing." - Nassim Nicholas Taleb

"It is a very recent disease to mistake the unobserved for the nonexistent; but some are plagued with the worse disease of mistaking the unobserved for the unobservable." - Nassim Nicholas Taleb

"People often need to suspend their self-promotion, and have someone in their lives they do not need to impress. This explains dog ownership." - Nassim Nicholas Taleb

"A disabled person will not use the regular bathroom, but a nondisabled person will use the bathroom for disabled people."

I cannot live in societies that spend trillions on nuclear weapons yet are incapable of delivering COVID testing to their populations. The world's pseudosophistication & misallocation of resources have been increasing… Taleb

"Difficulty is what wakes up the genius." - Nassim Nicholas Taleb

One of the things that he wrote about antifragility was nature always has redundancies. Nature never optimizes."

Information is antifragile; it feeds more on attempts to harm it than it does on efforts to promote it. For instance, many wreck their reputations merely by trying to defend them." - Nassim Nicholas Taleb

If my brain can tell the difference between noise and signal, my heart cannot." - Nassim Nicholas Taleb

"Categorizing is necessary for humans, but it becomes pathological when the category is seen as definitive, preventing people from considering the fuzziness of boundaries," - Nassim Nicholas Taleb

"Anything one needs to market heavily is necessarily either an inferior product or an evil one. And it is highly unethical to portray something in a more favourable light than it actually is." - Nassim Nicholas Taleb

"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." - Nassim Nicholas Taleb

"More data means more information, but it also means more false information." - Nassim Nicholas Taleb

"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." - Nassim Nicholas Taleb in The Black Swan

"Much of what other people know isn't worth knowing." - Nassim Nicholas Taleb

"If you want to annoy a poet, explain his poetry." - Nassim Nicholas Taleb

"Never explain why something important is important." - Nassim Taleb

"There is no such thing as the «rationality» of a belief, there is rationality of action."

"You can tell how uninteresting a person is by asking him whom he finds interesting."

"This idea that in order to make a decision you need to focus on the consequences (which you can know) rather than the probability (which you cant know) is the central idea of uncertainty." - Nassim Nicholas Taleb

Effectiveness wise you’ll get 10x MORE and FASTER RESULTS by turning 5% of conceptual knowledge into 95% practice rather than turning 95% of theory into 5% practice.

"If you lose money, it can be bad luck. It you blow up, it is certainly incompetence. FooledbyRandomness" - Nassim Nicholas Taleb

"NY will soon learn that only way you can enforce socialism is by closing borders and keeping people trapped inside (Cuba, Soviet bloc). People vote with their feet: a mechanism by which organic systems enforce selection."

"Truth is in the extremes. There is no noise in the far tails." - Nassim Nicholas Taleb

“Truth is much too complicated to allow for anything but approximations.” — John von Neumann

"It is a curse to have ideas that people understand only when it is too late."

"It certainly takes bravery to remain skeptical; it takes inordinate courage to introspect, to confront oneself, to accept one's limitations–Scientists are seeing more and more evidence that we are specifically designed by mother nature to fool ourselves." - Nassim Taleb

"If we are (almost) the only animal with a sense of justice, it is because we also are (almost) the only animal with a sense of cruelty." - Nassim Taleb

"When people call you intelligent it is almost always because they agree with you."

$3K: Scam $4K: Scam $5K: Scam $6K: Scam $7K: Meh $8K: Meh $9K: Meh $10K: Meh $11K: Meh $12K: “Moving” $13K: Hm $14K: Hm $15K: Hm $16K: Maybe $17K: Maybe $18K: Wow $19K: WOW $20K: Google: “How to buy Bitcoin” Market psychology is just that simple and weird.

"Newspapers used to be written by journalists; they are now written for journalists."

"In order to make a decision you need to focus on the consequences (which you can know) rather than the probability (which you can’t know) is the central idea of uncertainty." - Nassim Nicholas Taleb

"I woke with this conclusion from Skin in the Game: 1) Things work thanks to a handful of people; the rest operates by situational imitation, narrow mimicry, and semi-conscious role-playing." - Nassim Nicholas Taleb

"Capitalism is about adventurers who get harmed by their mistakes, not people who harm others with their mistakes." - Nassim Nicholas Taleb

"Luck is the residue of hard work." –Mike Walter

"I'm a greater believer in luck, and I find the harder I work the more I have of it."–Thomas Jefferson

"Bring the good news in trickles, the bad news in lumps." - Nassim Nicholas Taleb

It seems that the sophistication of French cuisine arose from the need to mask the lack of freshness of the ingredients –much as perfume came from the need to compensate for bad hygiene. In contrast, Italian and East Med cuisines make salient the freshness of the ingredients.

"There is no more unmistakable sign of failure than that of a middle-aged man boasting of his successes in college."

"The problem is architects building structures to impress other architects –but plumbers don't act on impressing other plumbers. Any activity where agents impress peers (architects, academia) rather than satisfying the needs constituents ends up rotting. "

With friends like me you are guaranteed to never need a single enemy.

"Libertarianism is about replacing authority with laws (legal systems, courts). Hard sciences (math, physics) obey laws, bullshit disciplines (psychology, history, sociology) obey authority. In the absence of #skininthegame, authority evolves to BS. In anything."

"Asking science to explain life and vital matters is equivalent to asking a grammarian to explain poetry."

"A mathematician starts with a problem and creates a solution; a consultant starts by offering a “solution” and creates a problem." - Nassim Nicholas Taleb

"A GOLDEN RULE in ETHICS Take a moment to figure out whether you'd rather be praiseworthy but not praised, or praised but not praiseworthy." - Nassim Taleb

"A very useful heuristic, a potent filter: When someone criticizes you, train to immediately ask yourself: "Would I rather be him/her, or I'd rather be me?" before taking the remark at face value. It works wonders. #SkinintheGame" - Nassim Nicholas Taleb

"At no point in history have so many non-risk-takers, that is, those with no personal exposure, exerted so much control." - Nassim Nicholas Taleb

"Failure-proof is achievable; failure-free is not."

"IQ" measures an inferior form of intelligence, stripped of 2nd order effects, meant to select paper shufflers, obedient IYIs.

When someone asks you a question in REAL LIFE, you focus first on "WHY is he asking me that?", which slows down. (Fat Tony vs Dr John)

Someone who took too many philosophy classes in college (or perhaps not enough) might object that the sighting of a Black Swan does not invalidate the theory that all swans are white since such a black bird is not technically a swan since whiteness to him may be the essential property of a swan. Remember, today is the tomorrow you worried about yesterday. The artificial gives us hangovers, the natural inverse-hangovers.

Uitvinder van het electrische gasfornuis

The only problem with the last laugh is that the winner has to laugh alone.

Intelligence without imagination: a deadly combination.

There is no more unmistakable sign of failure than that of a middle-aged man boasting of his successes in college.

[If] someone is making an effort to ignore you he is not ignoring you.

The danger of reading financial & other news (or econobullshit) is that things that don't make sense at all start making sense to you after progressive immersion.

It's a sign of weakness to worry about showing signs of weakness.

I trust those who trust me and distrust those who are suspicious of others.

A good man is warm and respectful towards the waiter or people of lower rank.

Journalists feel contempt for those who fear them and a deep resentment for those who don't.

When someone starts a sentence with the first half containing "I", "not", and "but", the "not" should be removed and the "but" replaced with "therefore.”

The only valid political system is one that can handle an imbecile in power without suffering from it.

Journalists cannot grasp that what is interesting is not necessarily important; most cannot even grasp that what is sensational is not necessarily interesting.

Never buy a product that the owner of the company that makes it doesn't use, or, in the case of, say, medication, wouldn't contingently use.

Injuries done to us by others tend to be acute; the self-inflicted ones tend to be chronic.

We often benefit from harm done to us by others; almost never from self-inflicted injuries.

You will never know if someone is an asshole until he becomes rich.

When someone writes "I dislike you but I agree with you", I read "I dislike you because I agree with you."

A great book eludes summaries. A great aphorism resists expansion. The rest is just communication.

For a free person, the optimal - most opportunistic - route between two points should never be the shortest one.

What counts is not what people say, it is how much energy they spend saying it.

Used skillfully, a compliment will be much more offensive than any disparagement.

I trust those who are greedy for money a thousand time more than those who are greedy for credentials.

Just as eating cow-meat doesn't turn you into a cow, studying philosophy doesn't make you wiser.

It is a great compliment for an honest person to be mistaken for a crook by a crook.

Many want to learn how to memorize things; few seek that rare ability to forget.

The ultimate freedom lies in not having to explain "why" you did something.

A book that can be summarized should not be written as a book.