Nassim Taleb is the original, idiosyncratic mind behind Fooled by Randomness, The Black Swan, and Antifragile, a bestselling series of books on the nature of complexity, randomness, and a world where rare events dominate the landscape.
[quote]“Probability is a liberal art; it is a child of skepticism, not a tool for people with calculators on their belts to satisfy their desire to produce fancy calculations and certainties.”[/quote]
Nassim Nicholas Taleb, born in Lebanon, started his career as a derivatives trader on Wall Street. Yet he publicly disdains the models promoted by the finance industry. He is exquisitely credentialed, with a Wharton MBA and a PhD from the University of Paris, yet believes that academia produces insights that are far removed from the realities of the world, and that credentials are largely for show.
These contradictions are at the heart of a unique mind. With his childhood in Lebanon interrupted by the Lebanese Civil War, Taleb is a serious autodidact who claims to have spent many months simply reading for 60 hours per week. While he had success taking an unusual approach to derivatives trading, smack in the middle of his finance career Taleb began producing books of personal essays in his free time. They were meditations on the nature of uncertainty and how we live in a world we don’t fully understand. How to avoid being a sucker. How to go for “long” volatility (in finance parlance). Why it’s better not to plan out your vacations. Why reading the news makes you stupid. Why forecasting is a waste of time, but being prepared for anything is not.
Taleb’s main thrust has been understanding the application of what statisticians call “fat tails” — rare events at the edges of a statistical distribution that often carry the greatest consequences, yet are also the most unpredictable. He popularized the phrase “Black Swan” to represent the big events that have never happened and cannot be predicted, but still need our attention. He might say that he specializes in the ideas that count the most.
Such independent, free-range thinking comes with great scrutiny, and part of Taleb’s approach includes a strict code of ethics to which he holds himself and others. For instance, we are not allowed to take risks that will not hurt us personally if things go south. We are not allowed to make claims without empirical proof. We cannot hide behind credentials. We cannot turn knowledge into a spectator sport. We must take full responsibility for our forecasts. And so on.
Taleb has now produced five books (the three mentioned above, plus a technical treatise on options trading and a book of parables). His very public work — much of it in the form of scholarly papers — continues as he tries to develop a rigorous mathematical basis for “fat-tailed” probability theory, while tackling fields like economics, psychology, game theory, and political science in the meantime.
With his work, we seek to find strategies of living in a world where rare events have the most consequences, where “knowledge” cannot be taken for granted as true, and where only non-suckers can survive.
Nassim Taleb Quotes
“My major hobby is teasing people who take themselves and the quality of their knowledge too seriously.”
“We should reward people, not ridicule them, for thinking the impossible.”
“Injecting some confusion stabilizes the system.”
“This is the central illusion in life: that randomness is a risk, that it is a bad thing.”
“Much of modern life is preventable chronic stress injury.”
“The fragile wants tranquility, the antifragile grows from disorder, and the robust doesn’t care too much.”
“A man is morally free when … he judges the world, and judges other men, with uncompromising sincerity. This is not just an aim but an obligation.”
“Simply, people need to be blinded by knowledge—we are made to follow leaders who can gather people together because the advantages of being in groups trump the disadvantages of being alone. It has been more profitable for us to bind together in the wrong direction than to be alone in the right one. Those who have followed the assertive idiot rather than the introspective wise person have passed us some of their genes. This is apparent from a social pathology: psychopaths rally followers.”
“Don’t cross a river if it is four feet deep on average.”
“But it remains the case that you know what is wrong with a lot more confidence than you know what is right.”
“If you want to get an idea of a friend’s temperament, ethics, and personal elegance, you need to look at him under the tests of severe circumstances, not under the regular rosy glow of daily life.”
“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.”
Suggested Readings on Nassim Taleb
34 Insights from Nassim Taleb – Nassim Taleb shares 34 insights from his Facebook account.
The Noise Bottleneck: When More Information Is Harmful – Taleb argues that as you consume more data and as the ratio of noise to signal increases, you know less about what’s going on and are more likely to cause trouble inadvertently.
Nassim Taleb on the Notion of Alternative Histories – In Fooled by Randomness, Taleb describes his notion of alternative histories.
Nassim Taleb: How Not to Be a Sucker from the Past – Taleb advises us to adopt the empirical skeptic approach of Menodotus, which was to “know history without theorizing from it” and to not make any large theoretical or scientific claims.
Nassim Taleb: The Winner-Take-All Effect in Longevity – Taleb elaborates on the Copernican Principle.
Nassim Taleb: A Definition of Antifragile and Its Implications – Antifragility has a singular property of allowing us to deal with the unknown, to do things without understanding them — and do them well.
Nassim Taleb: The Big Errors of Big Data – Taleb offers another way to look at the concept of Big Data.
The Bed of Procrustes — 20 Aphorisms from Nassim Taleb – Here are 20 of Taleb’s famous aphorisms.
Nassim Taleb: Seven Rules of Anti-Fragility The seven rules of anti-fragility, laid out by Taleb.
Nassim Taleb: The Definition of a Black Swan – A Black Swan has three major attributes.
Videos
Nassim Taleb and Daniel Kahneman Discuss Antifragility – The title says it all: Two brilliant men discuss one man’s brilliant work.
Nassim Taleb Talks at Google – Taleb goes to Google and discusses the main themes of his Incerto series.
Nassim Taleb on The Black Swan – Taleb discusses in detail the main points of his book The Black Swan.
Nassim Taleb Explains Antifragility – Taleb discusses the elusive concept of antifragility: things that gain from disorder.
Nassim’s Personal YouTube Channel – Taleb posts infrequent but insightful videos on probability and other pet topics.
Articles
- Articles Written on Medium
- Articles on Fat-Tails Research
- Articles on the Precautionary Principle
- Understanding Is a Poor Substitute for Convexity
- The Fourth Quadrant: A Map of the Limits of Statistics
- Real Life Is Not a Casino
- Ten Rules for a Black Swan–Robust World
- The Opiates of the Middle Classes
- The Hard Problem
Books
Skin in the Game (See Chapters posted online here, here, here, and here)
Book Recommendations
Book Recommendations from Nassim Taleb