When consuming information, we strive for more signal and less noise. Intuitively we feel like the more information we consume the more signal we receive. While this is probably true on an absolute basis, Nassim Taleb argues in this excerpt from his forthcoming book, Antifragile, that it is not true on a relative basis. Taleb [...]
Do Something Syndrome
Nassim Taleb at UPenn talking about anti-fragility: There’s something called action bias. People think that doing something is necessary. Like in medicine and a lot of places. Like every time I have an MBA—except those from Wharton, because they know what’s going on!—they tell me, “Give me something actionable.” And when I was telling them, [...]
I recommend reading Nassim Taleb’s recent article (PDF) in Foreign Affairs. If you don’t have time here are my notes: Complex systems that have artificially suppressed volatility tend to become extremely fragile, while at the same time exhibiting not visible risks. Seeking to restrict variability seems to be good policy (who does not prefer stability [...]
Do you know of any good approaches to solve general problems? Well, I didn’t. My approach seemed to consist mostly of dumb luck. That works most of the time, but feels inadequate for someone looking to improve their ability to make good decisions. So I did what any person preferring reading to reality TV does [...]
One natural human bias is that we tend to draw strong conclusions based on few observations. This bias unearth’s itself in many ways including the gambler and hot hand fallacies. Such biases may induce public opinion and the media to call for dramatic swings in policies or regulation in response to highly improbable events. These [...]
“Investing is where you find a few great companies and then sit on your ass” – Charlie Munger Most of us are taught from a young age that effort leads to results. But if you take effort to mean activity, the lesson doesn’t apply for long-term investors. The message here is simple: investors often make changes to [...]
The United States is the most obese nation in the world. Without knowing the real cause of why, lawmakers assume that people are just ignorant to what they are eating and thus consume too many calories. New York, for instance, created a law that required chain-restaurants to post calories in order to lower calorie consumption [...]
Information without context is falsely empowering and incredibly dangerous. As an adult, have you ever picked up a child’s shape-sorter and tried to put the square item through the round hole? Of course not. Adults know better — or at least we’re supposed to. Yet we often take square solutions and cram them into round [...]
