Nassim Taleb wrote a book you really need for your arsenal. It will definitely help you stay on offense. The title is “Antifragile” and the subtitle “Things That Gain From Disorder.” If you read any of Taleb’s books you better put your thinking cap on. This one doesn’t contain formulas, only some graphs. It still makes you think.
If you don’t do deadlifts on a regular basis you will after you read this book. Why? Because they make you “antifragile” or as others might say, “hard to kill.”
A Definition
Taleb explains why he chose a “neologism.” It was because “there is no simple noncompound word in the Oxford English Dictionary the expresses the point of reverse fragility. For the idea of antifragility is not part of our consciousness-but, luckily, it is part of our ancestral behavior, our biological apparatus, and ubiquitous property of every system that has survived.”
With that Taleb begins his book. He uses some big words. That is why I put quotes around neologism. It is a word most of us need to lookup. However, in spite of the erudite nature of his work, it is useful stuff.
This book is over four-hundred pages so I will only be picking a few outstanding ideas from it. You really need to read the whole thing to become convinced.
Life, Death, and Mistakes
Chapter four of Taleb’s book is titled, “What Kills Me Makes Others Stronger.” He discusses many things. Here is a typical statement, “If every plane crash makes the next one less likely, every bank crash makes the next one more likely.” Think about that. He says reinsurance companies do well after they take a hit from some catastrophe.
Taleb says “…my definition of a loser is someone who, after making a mistake, doesn’t introspect, doesn’t exploit it, feels embarrassed and defensive rather than enriched with a new piece of information, and tries to explain why he made the mistake rather than moving on.”
Then he states that “what does not kill me kills others.” He sites Nietzsche when he says, “what does not kill me makes me stronger.” Then he says it could also mean, “what did not kill me did not make me stronger, but spared me because I am stronger than others, but it killed others and the average population is now stronger because the weak are gone. In other words, I passed an exit exam.”
Later when discussing randomness he says, “This is the central illusion of life: that randomness is risky, that it is a bad thing-and that eliminating randomness is done by eliminating randomness.” He goes on to say that “plumbers, dentists, tailors, etc have some volatility in their income but they are rather robust to a minor professional Black Swan.” However, employees can just get a call from HR and their income goes to zero. “Employees risks are hidden.” Two things about that. First, if you are scratching your head and asking, “What is a Black Swan,” then you need to read his book “The Black Swan.” Second, everyone who works for someone else should re-read this paragraph.
“The Turkey Problem”
This gem alone is worth the price of the book, but I am going to reproduce it here and then promise there are more like it.
“A turkey is fed for a thousand days by a butcher; every day confirms to its staff of analysts that butchers love turkeys “with increased statistical confidence.” The butcher will keep feeding the turkey until a few days before Thanksgiving. Then comes the day when it is really not a very good idea to be a turkey. So with the butcher surprising it, the turkey will have a revision of belief-right when its confidence in the statement the butcher loves turkeys is maximal and “it is very quiet” and soothingly predictable in the life of the turkey. This example builds on an adaptation of a metaphor by Bertrand Russell. The key here is that such a surprise will be a Black Swan event; but just for the turkey, not the butcher.”
He goes on to say, “We can also see from the turkey story the mother of all harmful mistakes: mistaking absence of evidence (of harm) for evidence of absence, a mistake that will see tends to prevail in intellectual circles and one that is grounded in the social sciences.
“So our mission in life becomes simply “how not to be a turkey,” or, if possible, how to be a turkey in reverse- antifragile, that is. Not being a turkey starts with figuring out the difference between true and manufactured stability.”
Other Insights
There are many other insights in this book. For instance, he discusses size and says, “In spite of what is studied in business schools concerning “economies of scale,” size hurts your times of stress; it is not a good idea to be large during difficult times.”
Another Talebism is that things that have been around a very long time will probably still be around when you are gone. He applies this idea to many areas of life.
Then being comfortable is not good. It makes you fragile.
Complex systems are risky and he says, “humans should not be given explosive toys (like atomic bombs, financial derivatives, or tons to create life).”
Medicine. He says because not all doctors are sophisticated you shouldn’t go to the doctor often. “…it is a serious error to infer that if we live longer because of medicine, all medical treatments make us live longer.”
Exercise. “..walking effortlessly, any a pace below the stress level, can have some benefits-or, as I speculate, is necessary for humans, perhaps as necessary as sleep, which at some point modernity could not rationalize and tried to reduce.”
The concept of “skin in the game” is well associated with Taleb. If you are a salesman for a company and don’t make a sale it impacts your income. You have skin in the game. So your opinion of sales means something. This is why he doesn’t like academics in general because none of them have skin in the game.
Marketing. “Anything one needs to market heavily is necessarily either an inferior product or an evil one.” That is really something to think about.
And finally, he says, “The best way to verify that you are alive is by checking if you like variations. Remember that food would not have a taste if it weren’t for hunger; results are meaningless without effort, joy without sadness, convictions without uncertainty, and an ethical life isn’t so when stripped of personal risk.”
