Incerto 4-Book Bundle: Fooled by Randomness, The Black Swan, The Bed of Procrustes, Antifragile

by Nassim Nicholas Taleb

For many people, knowledge has the remarkable power of producing confidence instead of measurable aptitude.

KNOWLEDGE often makes us comfortable with our decisions. Does it make us right? Well, I happen to think it helps.

We are suckers for those who help us navigate uncertainty, whether the fortune-teller or the “well-published” (dull) academics or civil servants using phony mathematics.

We are suckers for supposed experts who predict with confidence.

From Yogi Berra to Henri Poincaré

The larger the role of the Black Swan, the harder it will be for us to predict.

THE SCANDAL OF PREDICTION

employees experience differential wealth from the rest of the local population, with concomitant pressures on them to live by a sophisticated script (wine and opera).

RICH PEOPLE have to PRETEND THEY LIKE things I'm not interested in. They need to be SOPHISTICATED by likeing such things as EXPENSIVE RAZOR, CIGARS, OPERA, CARS YOU CAN'T LET OUT OF YOUR SITE.

The Sydney Opera House was supposed to open in early 1963 at a cost of AU$ 7 million. It finally opened its doors more than ten years later, and, although it was a less ambitious version than initially envisioned, it ended up costing around AU$ 104 million.

This chapter has two topics. First, we are demonstrably arrogant about what we think we know.

I'll change this thought. People who know a little bit express their opinions louder and more often than people who know a lot. It seems to be fashionable for people who know a lot to give up on convincing unlearned people. They'd rather go learn something new. THOSE WHO ACTUALLY DO KNOW DON'T TELL.

ON THE VAGUENESS OF CATHERINE’S LOVER COUNT

epistemic arrogance, literally, our hubris concerning the limits of our knowledge.

People assume that if they know a LITTLE they know a LOT and they assume the people who actually do know a LOT only know a LITTLE. Those with little knowledge are always criticizing the actions of those who know a lot. I'm learning to say, "I don't know" when I don't know. I don't need to know everything or even anything.

True, our knowledge does grow, but it is threatened by greater increases in confidence, which make our increase in knowledge at the same time an increase in confusion, ignorance, and conceit.

In this case it is more honorable to just say, “I don’t want to play the game; I have no clue.”

When you don't know, say so. What percentage of COVID deaths were actually caused by something else. "I don't know" and I'd add, "You tell me, but give scientific support or I'm not interested." The response won't make me popular, but I'm tired of being forced to accept bullshit.

Literally any decision pertaining to the future is likely to be infected by it.

The it is our tendency to think we know more than we know, and because of this, we think our predictions are more accurate than they could possibly be. Tangent: I just got an urge to check the temperature on my phone because i'm going jogging in a little bit. Cal Newton, author of "Digital Minimalism" warned me that little digital distraction can ruin my concentration for an hour. Back to focusing on this book.

I remind the reader that I am not testing how much people know, but assessing the difference between what people actually know and how much they think they know.

BLACK SWAN BLINDNESS REDUX

Left to our own devices, we tend to think that what happens every decade in fact only happens once every century, and, furthermore, that we know what’s going on.

Donald Trump keeps mentioning the Spanish Flu from 1917 to 1918. I'm reading "The Great Influenza" which is about the Spanish Flu. It was published in 2004. It references a "recent study" which found there had been a flu epidemic for 19 of the last 33 years. They killed from a few thousand to forty thousand just in the United States. Given this context, is COVID-19 really a Black Swan? We could have predicted it. I think the government did an excellent job responding. Was it precisely the correct level of concern? Don't be silly. There is no such thing. THey did the best they could with the information they had at the time.

The longer the odds, the larger the epistemic arrogance.

Furthermore, people who make forecasts professionally are often more affected by such impediments than those who don’t.

When you were a financial advisor, you would only buy stock in companies that had 10 successive years of increasing earnings. You looked at other factors to see if the trend was stable. You told your clients only one in three stocks they bought would go up in the long term. One in three would do nothing. One in three would go down and one in three would go bankrupt. The portfolio would likely go up. Look at the total value, not at the individual stocks. Some persisted in looking at the individual choices. Fortunately, there was only one who never stopped doing this.

INFORMATION IS BAD FOR KNOWLEDGE

When you are employed, hence dependent on other people’s judgment, looking busy can help you claim responsibility for the results in a random environment.

Let us discuss one main effect of information: impediment to knowledge.

additional knowledge of the minutiae of daily business can be useless, even actually toxic, is indirectly but quite effectively testable.

Learning every little detail about COVID can be toxic, All I really need to know are the basics as they apply to me. If I don't go near people they can't transmit the disease to me. This doesn't affect my lifestyle in any meaningful way. I don't need to get in any masked vs. unmasked fights.

The more information you give someone, the more hypotheses they will formulate along the way, and the worse off they will be. They see more random noise and mistake it for information.

The problem is that our ideas are sticky: once we produce a theory, we are not likely to change our minds—so those who delay developing their theories are better off.

Once we develop a theory, we are unlikely to change it even when presented with contrary evidence. Mick developed the theory that people who vote democrat are more likely to get sick. He did this based on a flimsy meme that was factually incorrect. However, when I sent him a study that showed an association between counties with decreasing lifespans and voting for Trump, he DIDN'T EVEN ACKNOWLEDGE IT. Ok...an annoying habit I've picked up. Say OK when I want to collect my thoughts. OK, people may be physically or mentally INCAPABLE of overcoming a bias when seeking new information. They may decide the car was red when it was actually blue. They will forever recall the car was red becuse that's what their mind saw. "I know what I saw..." Well, this is true. They do know what their mind saw. However, they don't know that what their mind saw was actually the same thing in front of them.

Remember that we treat ideas like possessions, and it will be hard for us to part with them.

Listening to the news on the radio every hour is far worse for you than reading a weekly magazine, because the longer interval allows information to be filtered a bit.

We are better off examining an idea at longer intervals. No, let me change that a bit. We are better off taking a longer time between making preliminary theories. Maybe this isn't right. Maybe we should never have a final answer. No, then you end up with someone who can't make a decision. Oh well, I'll ponder this.

They just got more confident in their original diagnosis.

I’ve struggled much of my life with the common middlebrow belief that “more is better”—more is sometimes, but not always, better.

According to Malcom Gladwell, in the book "Blink," less knowledge is better when making large, emotional decisions. A large decision such as buying a house is automatically emotional. More knowledge is better when making a small decision such as buying a razor.

THE EXPERT PROBLEM, OR THE TRAGEDY OF THE EMPTY SUIT

Epistemic arrogance does not preclude skills.

Arrogance about the level of knowledge does not preclude skills. It is good to question the expert's estimation of the probability of error.

But their probabilities, on the other hand, will be off—and, this is the disturbing point, you may know much more on that score than the expert. No matter what anyone tells you, it is a good idea to question the error rate of an expert’s procedure.

I will separate the two cases as follows. The mild case: arrogance in the presence of (some) competence, and the severe case: arrogance mixed with incompetence (the empty suit).

(As an example of a computer using a single metric, the ratio of liquid assets to debt fares better than the majority

of credit analysts.)

We can already see the difference between “know-how” and “know-what.”

Experts who tend to be experts: livestock judges, astronomers, test pilots, soil judges, chess masters, physicists, mathematicians (when they deal with mathematical problems, not empirical ones), accountants, grain inspectors, photo interpreters, insurance analysts (dealing with bell curve–style statistics).

Experts who tend to be … not experts: stockbrokers, clinical psychologists, psychiatrists, college admissions officers, court judges, councilors, personnel selectors, intelligence analysts (the CIA’s record,

Simply, things that move, and therefore require knowledge, do not usually have experts, while things that don’t move seem to have some experts.

Things where the future is unpredictable don't usually have expets. An expert can tell us how many cases of COVID there are after they are done arguing about what counts as COVID. The experts cannot predict with certainty what precautions will affect the number of cases. My distress is caused by the people without science who expect experts to be 100% right. WHen they aren't, they say their uneducated opinions are right, and nothing the experts say should be followed. It spills over into everything the experts do with anarchy as the result.

but rather that those who provide no tangible added value are generally dealing with the future.

Not everyone who deals with the future is devoid of value. However, those experts who are devoid of value generally deal with the future. I should use care when I talk about the future as i am not an expert. However, there are cases where I know the future is largely unpredicable.I shouldn't make predictions.

You cannot ignore self-delusion. The problem with experts is that they do not know what they do not know.

How to Have the Last Laugh

People learn the names of economic indicators and the verbil swill associated with them. The ridicule those who forecast with tea leaves and bones. They are both equally accurate...perhaps the latter is more accurate. The safe way to navigate bullshit is to take care not to step in it. This means, don't participate. Let the bullshitters bullshit off in a corner someplace. Unfortnately, I don't come close to having this skill.

But the stars are foolish enough to publish their projected numbers, right there, for posterity to observe and assess their degree of competence.

One elementary empirical test is to compare these star economists to a hypothetical cabdriver (the equivalent of Mikhail from Chapter 1): you create a synthetic agent, someone who takes the most recent number as the best predictor of the next, while assuming that he does not know anything.

Events Are Outlandish

What matters is not how often you are right, but how large your cumulative errors are.

events, it turns out, are almost always outlandish.

Herding Like Cattle

I Was “Almost” Right

The only regularity Tetlock found was the negative effect of reputation on prediction: those who had a big reputation were worse predictors than those who had none.