Nassim Nicholas Taleb: the prophet of boom and doom

[Cramulus]

“The only way you can say ‘Fuck you’ to fate is by saying it’s not going to affect how I live. So if somebody puts you to death, make sure you shave.” -Taleb

Here's an article I found on our boy Nassim Nicholas Taleb, author of The Black Swan.

http://business.timesonline.co.uk/tol/business/economics/article4022091.ece?print=yes&randnum=1212675666154

It's a good insight into Taleb, and documents a few of his mannerisms and habits. Here are some good quotes:

Startlingly, this great sceptic, this non-guru who believes in nothing, is still a practising Christian. He regards with some contempt the militant atheism movement led by Richard Dawkins.

“Scientists don’t know what they are talking about when they talk about religion. Religion has nothing to do with belief, and I don’t believe it has any negative impact on people’s lives outside of intolerance. Why do I go to church? It’s like asking, why did you marry that woman? You make up reasons, but it’s probably just smell. I love the smell of candles. It’s an aesthetic thing.”

Take away religion, he says, and people start believing in nationalism, which has killed far more people. Religion is also a good way of handling uncertainty. It lowers blood pressure. He’s convinced that religious people take fewer financial risks.

This quote is pretty much directly from the Black Swan, and summarizes Taleb's opinion on eggheads.

For the non-mathematician, probability is an indecipherably complex field. But Taleb makes it easy by proving all the mathematics wrong. Let me introduce you to Brooklyn-born Fat Tony and academically inclined Dr John, two of Taleb’s creations. You toss a coin 40 times and it comes up heads every time. What is the chance of it coming up heads the 41st time? Dr John gives the answer drummed into the heads of every statistic student: 50/50. Fat Tony shakes his head and says the chances are no more than 1%. “You are either full of crap,” he says, “or a pure sucker to buy that 50% business. The coin gotta be loaded.”

The chances of a coin coming up heads 41 times are so small as to be effectively impossible in this universe. It is far, far more likely that somebody is cheating. Fat Tony wins. Dr John is the sucker. And the one thing that drives Taleb more than anything else is the determination not to be a sucker. Dr John is the economist or banker who thinks he can manage risk through mathematics. Fat Tony relies only on what happens in the real world.

The central point is that we have created a world we don’t understand. There’s a place he calls Mediocristan. This was where early humans lived. Most events happened within a narrow range of probabilities – within the bell-curve distribution still taught to statistics students. But we don’t live there any more. We live in Extremistan, where black swans proliferate, winners tend to take all and the rest get nothing – there’s Bill Gates, Steve Jobs and a lot of software writers living in a garage, there’s Domingo and a thousand opera singers working in Starbucks. Our systems are complex but over-efficient. They have no redundancy, so a black swan strikes everybody at once. The banking system is the worst of all.

“Complex systems don’t allow for slack and everybody protects that system. The banking system doesn’t have that slack. In a normal ecology, banks go bankrupt every day. But in a complex system there is a tendency to cluster around powerful units. Every bank becomes the same bank so they can all go bust together.”

Taleb on investing your money:

And you and me? Well, the good investment strategy is to put 90% of your money in the safest possible government securities and the remaining 10% in a large number of high-risk ventures. This insulates you from bad black swans and exposes you to the possibility of good ones. Your smallest investment could go “convex” – explode – and make you rich. High-tech companies are the best. The downside risk is low if you get in at the start and the upside very high. Banks are the worst – all the risk is downside. Don’t be tempted to play the stock market – “If people knew the risks they’d never invest.”

good quote on human nature:

“Let’s be human the way we are human. Homo sum – I am a man. Don’t accept any Olympian view of man and you will do better in society.”

and finally,

Taleb's top life tips

1 Scepticism is effortful and costly. It is better to be sceptical about matters of large consequences, and be imperfect, foolish and human in the small and the aesthetic.

2 Go to parties. You can’t even start to know what you may find on the envelope of serendipity. If you suffer from agoraphobia, send colleagues.

3 It’s not a good idea to take a forecast from someone wearing a tie. If possible, tease people who take themselves and their knowledge too seriously.

4 Wear your best for your execution and stand dignified. Your last recourse against randomness is how you act — if you can’t control outcomes, you can control the elegance of your behaviour. You will always have the last word.

5 Don’t disturb complicated systems that have been around for a very long time. We don’t understand their logic. Don’t pollute the planet. Leave it the way we found it, regardless of scientific ‘evidence’.

6 Learn to fail with pride — and do so fast and cleanly. Maximise trial and error — by mastering the error part.

7 Avoid losers. If you hear someone use the words ‘impossible’, ‘never’, ‘too difficult’ too often, drop him or her from your social network. Never take ‘no’ for an answer (conversely, take most ‘yeses’ as ‘most probably’).

8 Don’t read newspapers for the news (just for the gossip and, of course, profiles of authors). The best filter to know if the news matters is if you hear it in cafes, restaurants... or (again) parties.

9 Hard work will get you a professorship or a BMW. You need both work and luck for a Booker, a Nobel or a private jet.

10 Answer e-mails from junior people before more senior ones. Junior people have further to go and tend to remember who slighted them.

[Bebek Sincap Ratatosk]

Top Life Tips now hanging in my cubicle.

[Mesozoic Mister Nigel]

Those are wonderful.

[Rumckle]

Really good stuff.

I like the stuff about our systems not having any slack. Reminded me of a New Scientist article I read a couple of months back that said our entire globalised system was too complex, and that by each separate part on the system relying so heavily on every other part, it is easy for a chain reaction to bring down the entire system.

[Cain]

Really good stuff.

I like the stuff about our systems not having any slack. Reminded me of a New Scientist article I read a couple of months back that said our entire globalised system was too complex, and that by each separate part on the system relying so heavily on every other part, it is easy for a chain reaction to bring down the entire system.

Its true.  John Robb has been talking about this for a while.  He worries a terrorist network will eventually collapse one of those heavily relied apon node and throw the international system into chaos.

I'm actually trying to learn how to map such networks, though it seems to be slow work.

[LMNO]

I wish I could remember where I heard this, but someone said that basically, Osama won.  He attacked the towers, triggering an expensive and destabilizing war which drove up gas prices, forced the US into reducing civil liberties, and pretty much tanked the economy.

Thoughts?

[Adios]

I wish I could remember where I heard this, but someone said that basically, Osama won.  He attacked the towers, triggering an expensive and destabilizing war which drove up gas prices, forced the US into reducing civil liberties, and pretty much tanked the economy.

Thoughts?

I think you can hear it every day on the news.

What did it cost him? A few low level people. I would call that a win of epic proportions. Especially since he's still free.

[Cain]

He won and lost.

The chief aim of Ayman al-Zawahiri in the 9/11 attacks was to break what he called the "media embargo" on Jihadist activities and beliefs.  In that sense, they succeeded beyond their wildest dreams.  7 years later and Al-Qaeda is still the world's biggest bogeyman.  He also managed to draw attention to the concept of jihad and strategy of Al-Qaeda to every corner of the globe.

However, they lost much of their experienced personnel and a safe base of operations in the invasion of Afghanistan.  That was a really greivous blow, and I honestly think Bin Laden didn't expect the hammer to fall so hard, or so fast.  That said, the viral message is out now.  That is the real victory.  He doesn't need a base, he doesn't even need to be alive, because the worldview justifying the violence, and the technical expertise is out there.  Whereever there are Muslims who respond to terrorism against Western interests or their own leaders, there will be "Al-Qaeda" now.

So far, it hasn't managed to achieve the primary aim, the forcing of the USA out of Middle East politics, but thats not to say it never will.  Al-Qaeda did score a victory on 9/11, because they showed they could dictate events, even beyond the power of the USA to shape the world.  And that sort of symbolism sticks in the mind.  It will only take one lucky, competent cell to replicate such a success in the Middle East (like Zarqawi nearly did in Jordan) and it seals Al-Qaeda's credentials as a workable model and theory.  And if that does happen, its going to really stretch US forces.  As the oil starts to run out, they're going to have to question if its worth the effort to overthrow Salafist regimes.

[Bebek Sincap Ratatosk]

He won and lost.

The chief aim of Ayman al-Zawahiri in the 9/11 attacks was to break what he called the "media embargo" on Jihadist activities and beliefs.  In that sense, they succeeded beyond their wildest dreams.  7 years later and Al-Qaeda is still the world's biggest bogeyman.  He also managed to draw attention to the concept of jihad and strategy of Al-Qaeda to every corner of the globe.

However, they lost much of their experienced personnel and a safe base of operations in the invasion of Afghanistan.  That was a really greivous blow, and I honestly think Bin Laden didn't expect the hammer to fall so hard, or so fast.  That said, the viral message is out now.  That is the real victory.  He doesn't need a base, he doesn't even need to be alive, because the worldview justifying the violence, and the technical expertise is out there.  Whereever there are Muslims who respond to terrorism against Western interests or their own leaders, there will be "Al-Qaeda" now.

So far, it hasn't managed to achieve the primary aim, the forcing of the USA out of Middle East politics, but thats not to say it never will.  Al-Qaeda did score a victory on 9/11, because they showed they could dictate events, even beyond the power of the USA to shape the world.  And that sort of symbolism sticks in the mind.  It will only take one lucky, competent cell to replicate such a success in the Middle East (like Zarqawi nearly did in Jordan) and it seals Al-Qaeda's credentials as a workable model and theory.  And if that does happen, its going to really stretch US forces.  As the oil starts to run out, they're going to have to question if its worth the effort to overthrow Salafist regimes.

I agree with this view. The key job of terrorism is publicity, AQ won that. As a bonus, they scared the s**t out of the Land of the Free and Home of the Brave and prompted a costly waste of treasure and blood. While not perfect, I'd say that beats the success rate of Bush's response.

[Rumckle]

I'm actually trying to learn how to map such networks, though it seems to be slow work.

That's not surprising, seeing as though many large companies have interests in many areas, and have so many deals with each other. Still, if it can be done, the map would be rather interesting.

On the AQ side, it would seem that they have an easier goal to achieve than the "free world". And their form of fighting doesn't really need a central base of operations anyway, at least not in a physical sense.