Fooled by Randomness
Fooled by Randomness
Metadata
- Author: Nassim Nicholas Taleb
- ASIN: B001FA0W5W
- Reference: https://amazon.com/dp/B001FA0W5W
- Kindle link
Highlights
(the growth in available information has been exceeded only by the expansion of noise). — location: 445 ^ref-1771
popular opinion warns that bad information is worse than no information at all. — location: 459 ^ref-25787
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. — location: 694 ^ref-49623
This high-yield market resembles a nap on a railway track. One afternoon, the surprise train would run you over. — location: 703 ^ref-39746
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). — location: 786 ^ref-46070
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). — location: 997 ^ref-26318
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. — location: 1022 ^ref-42792
Einstein’s remark that common sense is nothing but a collection of misconceptions acquired by age eighteen. — location: 1034 ^ref-21995
Epiphenomena — location: 1057 ^ref-39165
The invisible histories have a scientific name, alternative sample paths, a name borrowed from the field of mathematics of probability called stochastic processes. The notion of path, as opposed to outcome, indicates that it is not a mere MBA-style scenario analysis, but the examination of a sequence of scenarios along the course of time. We are not just concerned with where a bird can end up tomorrow night, but rather with all the various places it can possibly visit during the time interval. We are not concerned with what the investor’s worth would be in, say, a year, but rather of the heart-wrenching rides he may experience during that period. — location: 1096 ^ref-53680
A mistake is not something to be determined after the fact, but in the light of the information until that point. — location: 1263 ^ref-26695
The opportunity cost of missing a “new new thing” like the airplane and the automobile is minuscule compared to the toxicity of all the garbage one has to go through to get to these jewels (assuming these have brought some improvement to our lives, which I frequently doubt). — location: 1311 ^ref-48608
us assume that the reader shared my opinion, that the market over the next week had a 70% probability of going up and 30% probability of going down. However, let us say that it would go up by 1% on average, while it could go down by an average of 10%. What would the reader do? Is the reader bullish or bearish? — location: 1871 ^ref-43516
“Satisficing” was his idea (the melding together of satisfy and suffice): — location: 2988 ^ref-2831
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. — location: 3004 ^ref-34339
heuristics, — location: 3008 ^ref-58995
“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?” — location: 3067 ^ref-33456
The real problem is, as I have mentioned, that such a natural habitat does not include much information. — location: 3168 ^ref-11501
— location: 3783 ^ref-65535
Stoicism
There is nothing wrong and undignified with emotions—we are cut to have them. What is wrong is not following the heroic or, at least, the dignified path. That is what — location: 3789 ^ref-31535
stoicism truly means. It is the attempt by man to get even with probability. I need not be nasty at all and break the spell of the poem and its message, but I cannot resist some cynicism. A couple of decades later, Cavafy, while dying of throat cancer, did not quite follow the prescription. Deprived of his voice by the surgeons, he used to randomly enter undignified spells of crying and cling to his visitors, preventing them from leaving his death room. Some history. 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 stoic will thus be immune from life’s gyrations as he will be superior to the wounds from some of life’s dirty tricks. — location: 3791 ^ref-42124
