Fresh Nuggets - DO NOT Try to be Resilient. Do this Instead... (Nassim Taleb)
Hey friend!
I just uploaded a new video that I created from a fascinating conversation between Nassim Taleb and Daniel Kahneman (nobel prize in Economics). I was curious about this talk since Nassim is so critical (and, as Daniel argued in the talk, unnecessary rude sometimes) of economists. The parts I took are focused on what is "antifragility", how we can become more "antifragile" (we will see there are certain activities and behaviors which can put us more in this category) and why it is much better than being just resilient.
Here are all the notes and reflections I took...
🧠 Quotes
" A system that does not convert stressors / problems / variability to fuel is doomed" - Nassim Taleb
"A blazing fire makes flame and brightness out of everything that is thrown into it. // The impediment to action advances action. What stands in the way becomes the way" - Marcus Aurelius
"Never let a mistake go to waste. Learn from every mistake to become better." - Nassim Taleb
"Forgetting your mistakes is a terrible error if you are trying to improve your cognition." - Charlie Munger
👨 Speakers
Nassim Taleb
Nassim Taleb's work concerns problems of randomness, probability, and uncertainty. Author of many successful books, including The Black Swan, which The Sunday Times considers one of the 12 most influential books since World War II.
Daniel Kahneman (source: wikipedia)
Daniel Kahneman is notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences (shared with Vernon L. Smith). His empirical findings challenge the assumption of human rationality prevailing in modern economic theory.
📝 Notes
Nassim Taleb & Daniel Kahneman
- Just like there are things that are fragile, there are also things that are antifragile.
* Antifragility is the opposite of fragility. Thus, is not robustness (which would be the neutral --> neither fragile or antifragile properties)
- 3 categories in which we can separate everything:
* Fragile
** Things that lose from Chaos / Volatility
*** E.g./
tourists with strict travel agenda,
employees following a career path,
insurance providers.
** Downside > Upside
* Antifragile
** Things that gain from Chaos / Volatility
*** E.g./
adventurous people,
entrepreneurs,
insurance clients.
* Robust
** Things that neither gain nor lose. Neutral state.
---------------
- Organic vs. Engineered products....
* Organic entities *need* some amount of Volatility (Variability or Disorder) to get better
* Engineered products (e.g./ washing machine) do not benefit from any amount of Volatility.
** Some Organic-Complex Entities...
(Picking Nugget's Note:
Where is likely to find antifragility [things that gain from variability] -- in living-complex systems. "Living" in this context refers literally (e.g./ the biology of a human being) or figuratively ( anything in which the outcomes are influenced by the aggregation of human behavior // e.g./ The progression of popularity of an artist's work, The Economy, Entrepreneurship.... In all these kind of systems, it is a mistake to consciously micromanage the system's behavior to avoid randomness and struggle. Because these systems thrive from disorder, but gets worse in the lack of it (there is no neutral state)
- Reflections from Shortform's synthesis of the book "Antifragile".)
*** The human Being
**** The Source of Variability for human biology are Stressors.
***** If we do not get stressors --> we get weaker
***** If we do get stressors (to an amount that is not lethal) ---> we get stronger / better
(Heart rate variability --> improves health condition,
Muscle hypertrophy --> gets you physically stronger)
(Picking Nuggets Note:
We are biased to think binary about things or events, so if we see something that might kill us potentially, we tend to avoid it all together. So we miss on the gains of small amounts of harm AND become weaker, given this tendency to remove all discomfort / harm completely.
In our primitive past this tendency wasn't an issue even if existed, since we didn't have much control over the environment, so we couldn't remove discomfort even if we wished to.)
On this picture...
Living organisms are both antifragile and fragile (if the amount of stress is lethal). Thus, the key is to get stressors, but not too much that it kills us :(
(in other realms such as entrepreneurship or trading financial options, is all ANTIFRAGILITY!! there are no lethal amounts to worry about!).
*** The Economy
**** If we try to over-manage / stabilize it (get rid of stressors)...
***** We are making the system weaker --> which makes it more fragile / vulnerable.
**** Booms and busts are natural (in an Economy).
"The best predictor of a hedge fund that is going to collapse is steady earnings. It means they are taking a lot of hidden risks"
- Nassim Taleb
- The Denial of Antifragility (in living-complex systems)
* Eliminating small risks makes us more vulnerable to risks overall.
(lack of stressors --> weaker system --> more vulnerable to risks)
- Bottom line on how to become more antifragile...
" A system that does not convert stressors / problems / variability to fuel is doomed" - Nassim Taleb
"A blazing fire makes flame and brightness out of everything that is thrown into it. // The impediment to action advances action. What stands in the way becomes the way" - Marcus Aurelius
* Never let a mistake go to waste. Learn from every mistake to become better.
"Forgetting your mistakes is a terrible error if you are trying to improve your cognition." - Charlie Munger
- The Table from the book "Antifragility" on events / systems fitting into these 3 categories commented:
Link to the video:
https://www.youtube.com/watch?v=dq1rcdEds5Q&feature=youtu.be&ab_channel=PickingNuggets
The Fresh Nuggets (Newsletter) is brought to you by Shortform
Shortform is THE platform to go if you wanna find highly valuable nuggets (big ideas) from important non-fiction books. Beyond offering book summaries, they provide you with a full guide and synthesis of all the worthy ideas in a book. Personally, I love it because I can absorb book ideas at a faster pace compared to reading the entire books, and there is a deep analysis on each idea! (it is not shallowly explained, as it is the case in other platforms).
(Many times book authors will make hundreds of pages based on just a few new ideas just for the sake of producing a book, but in reality they could have given you these new-interesting ideas in just few pages. This is the cool thing about Shortform: you cut to the chase and get the book insights without unnecessary extensions of them. Besides, in any book guide on Shortform you can find links to blogposts that talk about the same ideas! -- as Naval Ravikant argues: reading books to completion is more of a vanity metric. What actually matters is to look for ideas, and once you find good interesting ideas, you reflect and research on them. [Naval on the podcast with Joe Rogan]. And it is the foundational understanding of all these truthful and interdisciplinary ideas that will make you better in any life dimension [Charlie Munger, Warren Buffet, Naval Ravikant]).
Besides, I have found at least 50-60 books (on Shortform) that were on my personal reading list. These include 4 popular books of Nassim Taleb:
(there is a synthesis of all the ideas for each chapter of each of these 4 books!!)
So you will likely find many interesting book guides on Shortform! My plan is to read these book guides and if in a particular one I find a super interesting-new idea to me, I will also buy the book and read it entirely!
If you wanna check out Shortform, you can use my special link to have a 5-day FREE trial and a 20% off the annual subscription - shortform.com/pickingnuggets
👨💻Other themes I've been bingeing on...
Robert Greene on Reading, The Laws of Power, and Detecting Lies | Knowledge Project Podcast Archive — www.youtube.com Robert Greene is a five-time NYT bestselling author and world-renowned strategist. We discuss how he reads and retains, how to spot a bullshitter, and how to...
Until next time,
Julio xx
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