Nassim N Taleb - Collected Quotes

"[…] we underestimate the share of randomness in about everything […]  The degree of resistance to randomness in one’s life is an abstract idea, part of its logic counterintuitive, and, to confuse matters, its realizations nonobservable." (Nassim N Taleb, "Fooled by Randomness", 2001)

"A mistake is not something to be determined after the fact, but in the light of the information until that point." (Nassim N Taleb, "Fooled by Randomness", 2001)

"Probability is not about the odds, but about the belief in the existence of an alternative outcome, cause, or motive." (Nassim N Taleb, "Fooled by Randomness", 2001)

"A Black Swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. […] The Black Swan idea is based on the structure of randomness in empirical reality. [...] the Black Swan is what we leave out of simplification." (Nassim N Taleb, “The Black Swan”, 2007)

"A theory is like medicine (or government): often useless, sometimes necessary, always self-serving, and on occasion lethal. So, it needs to be used with care, moderation and close adult supervision." (Nassim N Taleb, "The Black Swan: The Impact of the Highly Improbable", 2007)

"Prediction, not narration, is the real test of our understanding of the world." (Nassim N Taleb, “The Black Swan”, 2007)

"Probability is a liberal art; it is a child of skepticism, not a tool for people with calculators on their belts to satisfy their desire to produce fancy calculations and certainties." (Nassim N Taleb, “The Black Swan”, 2007)

"The inability to predict outliers implies the inability to predict the course of history." (Nassim N Taleb, "The Black Swan" , 2007)

"While in theory randomness is an intrinsic property, in practice, randomness is incomplete information." (Nassim N Taleb, "The Black Swan", 2007)

"Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"Black Swans (capitalized) are large-scale unpredictable and irregular events of massive consequence - unpredicted by a certain observer, and such un - predictor is generally called the 'turkey' when he is both surprised and harmed by these events. [...] Black Swans hijack our brains, making us feel we 'sort of' or 'almost' predicted them, because they are retrospectively explainable. We don’t realize the role of these Swans in life because of this illusion of predictability. […] An annoying aspect of the Black Swan problem - in fact the central, and largely missed, point - is that the odds of rare events are simply not computable." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"Complex systems are full of interdependencies - hard to detect - and nonlinear responses. […] Man-made complex systems tend to develop cascades and runaway chains of reactions that decrease, even eliminate, predictability and cause outsized events. So the modern world may be increasing in technological knowledge, but, paradoxically, it is making things a lot more unpredictable." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"Heuristics are simplified rules of thumb that make things simple and easy to implement. But their main advantage is that the user knows that they are not perfect, just expedient, and is therefore less fooled by their powers. They become dangerous when we forget that." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"It is all about redundancy. Nature likes to overinsure itself." (Nassim N Taleb, "Antifragile: Things That Gain from Disorder", 2012)

"In fact, the most interesting aspect of evolution is that it only works because of its antifragility; it is in love with stressors, randomness, uncertainty, and disorder - while individual organisms are relatively fragile, the gene pool takes ad - vantage of shocks to enhance its fitness. […] So evolution benefits from randomness by two different routes: randomness in the mutations, and randomness in the environment - both act in a similar way to cause changes in the traits of the surviving next generations." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"Social scientists use the term 'equilibrium' to describe balance between opposing forces, say, supply and demand, so small disturbances or deviations in one direction, like those of a pendulum, would be countered with an adjustment in the opposite direction that would bring things back to stability." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"Systems subjected to randomness - and unpredictability - build a mechanism beyond the robust to opportunistically reinvent themselves each generation, with a continuous change of population and species." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"Technology is the result of antifragility, exploited by risk-takers in the form of tinkering and trial and error, with nerd-driven design confined to the backstage." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"This is the central illusion in life: that randomness is risky, that it is a bad thing - and that eliminating randomness is done by eliminating randomness. Randomness is distributed rather than concentrated." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"We can simplify the relationships between fragility, errors, and antifragility as follows. When you are fragile, you depend on things following the exact planned course, with as little deviation as possible - for deviations are more harmful than helpful. This is why the fragile needs to be very predictive in its approach, and, conversely, predictive systems cause fragility. When you want deviations, and you don’t care about the possible dispersion of outcomes that the future can bring, since most will be helpful, you are antifragile. Further, the random element in trial and error is not quite random, if it is carried out rationally, using error as a source of information. If every trial provides you with information about what does not work, you start zooming in on a solution - so every attempt becomes more valuable, more like an expense than an error. And of course you make discoveries along the way." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"When some systems are stuck in a dangerous impasse, randomness and only randomness can unlock them and set them free. You can see here that absence of randomness equals guaranteed death. The idea of injecting random noise into a system to improve its functioning has been applied across fields. By a mechanism called stochastic resonance, adding random noise to the background makes you hear the sounds (say, music) with more accuracy." (Nassim N Taleb, "Antifragile: Things that gain from disorder", 2012)

"The higher the dimension, in other words, the higher the number of possible interactions, and the more disproportionally difficult it is to understand the macro from the micro, the general from the simple units. This disproportionate increase of computational demands is called the curse of dimensionality." (Nassim N Taleb, "Skin in the Game: Hidden Asymmetries in Daily Life", 2018)

"Behavioral finance so far makes conclusions from statics not dynamics, hence misses the picture. It applies trade-offs out of context and develops the consensus that people irrationally overestimate tail risk (hence need to be 'nudged' into taking more of these exposures). But the catastrophic event is an absorbing barrier. No risky exposure can be analyzed in isolation: risks accumulate. If we ride a motorcycle, smoke, fly our own propeller plane, and join the mafia, these risks add up to a near-certain premature death. Tail risks are not a renewable resource." (Nassim N Taleb, "Statistical Consequences of Fat Tails: Real World Preasymptotics, Epistemology, and Applications" 2nd Ed., 2022)

"But note that any heavy tailed process, even a power law, can be described in sample (that is finite number of observations necessarily discretized) by a simple Gaussian process with changing variance, a regime switching process, or a combination of Gaussian plus a series of variable jumps (though not one where jumps are of equal size […])." (Nassim N Taleb, "Statistical Consequences of Fat Tails: Real World Preasymptotics, Epistemology, and Applications" 2nd Ed., 2022)

"[…] it is not merely that events in the tails of the distributions matter, happen, play a large role, etc. The point is that these events play the major role and their probabilities are not (easily) computable, not reliable for any effective use. The implication is that Black Swans do not necessarily come from fat tails; the problem can result from an incomplete assessment of tail events." (Nassim N Taleb, "Statistical Consequences of Fat Tails: Real World Preasymptotics, Epistemology, and Applications" 2nd Ed., 2022)

"Once we know something is fat-tailed, we can use heuristics to see how an exposure there reacts to random events: how much is a given unit harmed by them. It is vastly more effective to focus on being insulated from the harm of random events than try to figure them out in the required details (as we saw the inferential errors under thick tails are huge). So it is more solid, much wiser, more ethical, and more effective to focus on detection heuristics and policies rather than fabricate statistical properties." (Nassim N Taleb, "Statistical Consequences of Fat Tails: Real World Preasymptotics, Epistemology, and Applications" 2nd Ed., 2022)

"[…] whenever people make decisions after being supplied with the standard deviation number, they act as if it were the expected mean deviation." (Nassim N Taleb, "Statistical Consequences of Fat Tails: Real World Preasymptotics, Epistemology, and Applications" 2nd Ed., 2022)