Nicholas Taleb's Amazon Reviews
amazon.com
amazon.com
Actually though, I've actually a bunch of his videos super educational and well made - if you can get past the terrible camera / sound quality.
I watched his explanation of the central limit theorem [2] the other day and found it super helpful. I'm not great at math, but I took multiple stat classes at uni (including two where we went through proofs for the CLT at some level). But this single 10 minute video helped me "get it" more than any class. The big observation that I was missing is that the sample mean is pretty much the same as the sample sum, and the sample sum can sum to "things in the middle" in more ways that things not in the middle (e.g. if you have two dice, rolling a 7 is more likely than rolling a 12).
I'm sure I'm butchering it mostly, but that little bit of intuition was just *nice* - especially after 2 stat classes of rote proof following w/ little to no intuition building.
[1] https://www.youtube.com/channel/UC8uY6yLP9BS4BUc9BSc0Jww
Stats suffers quite heavily from having to introduce some ideas, most importantly distributions, which can be tricky to intuit at first. Running through some examples with Wolfram (there is a free version which you can in Jupyter) or using the stats package from scipy in Python was very helpful to me personally.
- Sir Francis Galton, on the Central Limit Theorem
Two interactive demos...
http://mfviz.com/central-limit/
http://www.ltcconline.net/greenl/java/Statistics/clt/cltsimu...
Also, Taleb often disses certain methods without providing alternatives or entertaining the idea that alternatives already exist.
My recent favorite is his rant about correlation where he shows that linear regression can yield a slope of zero on certain piecewise examples.
He just makes fun of regression and moves on without acknowledging piecewise and kernel regression exist to address those cases. Instead he'll make some comment about information theory being the solution without any further elaboration.
Sure correlation can be abused, but so can mutual information and any other information theoretic metric you choose.
Antifragile: what doesn't kill you makes you stronger.
Black Swan: Forecasting is really hard, perfect forecasting is impossible.
No, you've missed the point of the book (or haven't read it). It's about that some things become better in the presence of error/noise/damage/volatility. But not all things, some other, fragile things, become worse and worse as damage accumulates. And that there's no word for such a property, so he calls it "Antifragile". And then the book goes in great detail about lots and lots of examples (with the usual rambling).
Consider a portfolio of out of the money options, with some short closer to the money options to "collect premium". This is how Taleb made good amount of his money while trading options back in the day (I personally call such setups "a Taleb trade"). He himself describes it as "trades that make little money on small moves, lose medium amounts on medium moves, win a lot on big moves". But this has absolutely nothing to do with Lindy.
A Lindy "trade" would be something like hoarding gold. It's been around for sooooooo long.
I think the name for that property is "age". :)
Do you have an example of something that gets better in the presence of accumulated damage? Maybe giving something the "weathered" look on purpose? I can really only think of subjective examples.
Things that get worse with accumulated damage definitely abound in physics. One example that came immediately to mind. https://en.wikipedia.org/wiki/Hot-carrier_injection
Collectively DNA reproduction has been antifragile and kept up a continuous chain of existence for at least 4 billion years.
And even people who "know" that they're two separate domains fail to ACT like they know it.
If you're trying to predict what happens with 52 cards or a six-sided die, well that's easy. Everything works out nice and cleanly, with no ambiguity.
But if you're trying to predict markets, the math is intractable, for fundamental reasons. An example is that Michael Lewis talks about the "Value At Risk" that Wall St. metric in one of his books, leading to the 2008 crash. That's clearly casino math applied to real life, failing catastrophically.
The charitable interpretation is that people saying "well this only happens once in 100 million years" are genuinely naive. The other interpretation is that they know that their gains will be privatized and their losses will be socialized, so they have no incentive to use math that's not nonsense.
This is basically the "ludic fallacy" [1], although I think "casino math fallacy" is easier to remember. You're applying the math of games to real life, which is wrong exactly where it matters (in the fat tail).
"It is my ambition to say in ten sentences what everyone else says in a whole book"
Antifragile: be convex when applicable.
Black Swan: not all distributions are made the same.
The ideas in Antifragile are to me an good application of the bets to make in life and love. Skin in the game is to evaluate the bets (actions) of others. Doctor prescribing statins...hmmm...what are his incentives around the upsides/downsides of it?
Fooled by Randomness is a prescription of how to evaluate systemic performance (or failure). Black swans is eh...just about black swans or how outlier events in power law distributions can fool us by not showing up for a long time and then ...watch out.
Nassim can appear to be overly verbose but his books defy summarization. I recommend reading them but given my own experience can empathize by the contra opinions.
People may "nod their head yes" when you give the one sentence descriptions, and think they understand it. But then they ACT in a different way, especially when they have "skin in the game".
Taleb actually has a name for that: "domain dependence". That is, you can nod your head in agreement while reading a book, but then when confronted with the exact same situation in real life, you act as if you don't have that knowledge, or you act contrary to it.
I've noticed this in programming vs. computer science. In a test or interview situation, someone might say they'll do things one way. But then their production code they do it a different way, just because that's the common way they've seen it done, in that particular situation.
This can be good or bad -- sometimes the textbook way is actually better; sometimes not. You can also flip it around -- it also applies to the person asking the question. They might expect a certain answer of the interviewee, but when they have skin in the game, they do something else.
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I also don't agree with the one sentence description of the Black Swan. I'd say the most important idea is that outliers are often ignored, but they're precisely what drives history. [1] And also that they're more likely than naive mathematics would suggest, i.e. "fat tails".
To use an example that's HN friendly, every successful company is an outlier. And we always seem to be talking about the biggest outliers of them all (e.g. FAANG, none of which existed when I started using computers.) Making statements about the average new company isn't informative, because the average one fails and doesn't matter.
[1] Thiel has a similar sentiment, something like "every big moment in business happens exactly once. The next Google isn't making a search engine, etc."
https://www.mayoclinic.org/diseases-conditions/coronavirus/i...
[0] https://necsi.edu/systemic-risk-of-pandemic-via-novel-pathog...
It's the opposite of Taleb. Basically, if people were rational and used financial instruments properly, a lot of the risks of our lives can be mitigated. The trick isn't so much to control everything but to trade the less desirable forms of risk for the ones you can handle.
Edit: love how I’m getting downvotes for a factual statement
To sum it up: do what is at the limit of your competence and what you feel very drawn too (as in very interested in it). That’s where you’ll find a balance of your existing knowledge and pressure to expand your horizons, plus you are following your passion. That gives meaning.
It’s certainly worked for me recently. It’s very good advice.
I would suggest to try to read writing of Epicurus instead. At least he did followed own principles as far as we know.
I may be mistaken, but I think Aurelius complained about this too in meditations.
It has been a long time since I read it, but my basic understanding was that a lot of success is from luck and showed how that works. I remember clearly the math around investment managers being mostly lucky to have returns above the average yet they get a lot of praise and then their luck runs out. But there are still some that stay lucky for a long time.
If I was a successful investment manager I might question my success.
You may also try Memories, Dreams, Reflections by Carl Jung
But in general there is no such book as there is no universal meaning. One has to find it oneself.
I have not read Thinking Fast and Slow ether but really disliked "The tipping point" by Malcolm Gladwell.
Most impressive book: Thus spoke Zarathustra.
Here’s a link for your perusal: https://en.wikipedia.org/wiki/L%C3%A9vy_flight
He does tell a few “I’m such a badass” stories a la Taleb, but somehow he’s a much more sympathetic character. When he talks about bullying some bureaucrat into accepting his dissertation, you can’t help but root for him. Like, it’s a pretty bombastic story, but at the same time he’s such an underdog in the story itself.
Plus the mathematical modeling stuff was eye opening for me too.
Highly recommended.
Edit to add: Kahneman’s writing is much closer to Mandelbrot than to Taleb. I think you’d like Thinking Fast and Slow.
Ride The Tiger by Julius Evola.
Unlike most of these suggestions this book will actually give you purpose and meaning in life, but you will be vilified for even mentioning it. That's how you know it's good.
I came here to say the same! I’ve been thinking about this recently. It began after hearing the Weinstein brothers talk about Taleb[1]. My hunch is that a significant part of Taleb’s popularity stems from how dogmatically polarizing his views are. I’m not sure if he’s doing so authentically (I think he is), or: if he’s dogmatic in his opinions primarily because he knows doing so will result in wider distribution of his views.
I struggle with this dilemma.
On one hand, there’s a case for being strong-willed, dogmatic and polarizing. It takes courage.
On the other hand, there’s a case for being open-minded, flexible in your thinking, and uncertain. Yet, this is generally perceived as weak-willed and doesn’t attract nearly the same attention as the polarizing stance.
"""An Outside Context Problem was the sort of thing most civilisations encountered just once, and which they tended to encounter rather in the same way a sentence encountered a full stop."""
https://en.wikipedia.org/wiki/Excession#Outside_Context_Prob...
Basically he talks (from an inflated ego) about tail risk, randomness, and some types of system reliability
He is definitely someone whose ideas are worth making up your own mind on, rather than listening to an internet critic (or fanboi's) opinion on.
Of course it might as well be that Nassim is only compelled to write a review when something is really good, or really bad.