The Black Swan

Author:: Nassim Nicholas Taleb Full Title:: The Black Swan Tags:#media/book

• themes::
  • theme 1
• Summary::
  • summary 1

* highlights from 2021-02-08

* rarity, extreme impact, and retrospective (though not prospective) predictability.* A small number of Black Swans explain almost everything in our world, from the success of ideas and religions, to the dynamics of historical events, to elements of our own personal lives. ([Location 276](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=276))
* All follow these Black Swan dynamics. Literally, just about everything of significance around you might qualify. ([Location 285](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=285))
* Go ask your portfolio manager for his definition of “risk,” and odds are that he will supply you with a measure that excludes the possibility of the Black Swan—hence one that has no better predictive value for assessing the total risks than astrology ([Location 290](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=290))
* why does reading the newspaper actually decrease your knowledge of the world? ([Location 296](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=296))
* It is easy to see that life is the cumulative effect of a handful of significant shocks. ([Location 296](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=296))
* Black Swan logic makes what you don’t know far more relevant than what you do know.* Consider that many Black Swans can be caused and exacerbated by their being unexpected. ([Location 302](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=302))
* Isn’t it strange to see an event happening precisely because it was not supposed to happen? ([Location 307](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=307))
* It may be odd that, in such a strategic game, what you know can be truly inconsequential. ([Location 309](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=309))
* The payoff of a human venture is, in general, inversely proportional to what it is expected to be. ([Location 316](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=316))
* The inability to predict outliers implies the inability to predict the course of history, ([Location 319](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=319))
* What is surprising is not the magnitude of our forecast errors, but our absence of awareness of it. ([Location 324](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=324))
* There are so many things we can do if we focus on antiknowledge, or what we do not know. Among many other benefits, you can set yourself up to collect serendipitous Black Swans (of the positive kind) by maximizing your exposure to them. ([Location 331](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=331))
* We will see that, contrary to social-science wisdom, almost no discovery, no technologies of note, came from design and planning—they were just Black Swans. The strategy for the discoverers and entrepreneurs is to rely less on top-down planning and focus on maximum tinkering and recognizing opportunities when they present themselves. So I disagree with the followers of Marx and those of Adam Smith: the reason free markets work is because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or “incentives” for skill. The strategy is, then, to tinker as much as possible and try to collect as many Black Swan opportunities as you can. ([Location 334](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=334))
* Another related human impediment comes from excessive focus on what we do know: we tend to learn the precise, not the general. ([Location 339](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=339))
* We do not spontaneously learn that we don’t learn that we don’t learn. The problem lies in the structure of our minds: we don’t learn rules, just facts, and only facts. Metarules (such as the rule that we have a tendency to not learn rules) we don’t seem to be good at getting. We scorn the abstract; we scorn it with passion. ([Location 347](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=347))
* recursive environment. ([Location 350](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=350))
* What are our minds made for? It looks as if we have the wrong user’s manual. Our minds do not seem made to think and introspect; ([Location 352](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=352))
* We remember the martyrs who died for a cause that we knew about, never those no less effective in their contribution but whose cause we were never aware of—precisely because they were successful. ([Location 363](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=363))
* This is a far more vicious kind of ingratitude: the feeling of uselessness on the part of the silent hero. ([Location 365](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=365))
* The person who imposed locks on cockpit doors gets no statues in public squares, not so much as a quick mention of his contribution in his obituary. ([Location 371](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=371))
    * **Note**: Bad example ofc u can just overindex on this. 
* Those you saw in the media, on television performing heroic acts, and those whom you saw trying to give you the impression that they were performing heroic acts. The latter category includes someone like the New York Stock Exchange chairman Richard Grasso, who “saved the stock exchange” ([Location 378](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=378))
* Who is more valuable, the politician who avoids a war or the one who starts a new one (and is lucky enough to win)? ([Location 384](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=384))
* It is the same logic reversal we saw earlier with the value of what we don’t know; everybody knows that you need more prevention than treatment, but few reward acts of prevention. ([Location 385](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=385))
* I don’t particularly care about the usual. If you want to get an idea of a friend’s temperament, ethics, and personal elegance, you need to look at him under the tests of severe circumstances, not under the regular rosy glow of daily life. ([Location 393](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=393))
    * **Note**: Counterargument: the things people do when no one is looking are more of a testament to their character
* Almost everything in social life is produced by rare but consequential shocks and jumps; all the while almost everything studied about social life focuses on the “normal,” particularly with “bell curve” methods of inference that tell you close to nothing. Why? Because the bell curve ignores large deviations, cannot handle them, yet makes us confident that we have tamed uncertainty. Its nickname in this book is GIF, Great Intellectual Fraud. ([Location 396](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=396))
* Likewise, what many people commoditize and label as “unknown,” “improbable,” or “uncertain” is not the same thing to me; it is not a concrete and precise category of knowledge, a nerdified field, but its opposite; it is the lack (and limitations) of knowledge. It is the exact contrary of knowledge; one should learn to avoid using terms made for knowledge to describe its opposite. ([Location 404](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=404))
* our tendency to mistake the map for the territory, to focus on pure and well-defined “forms,” whether objects, like triangles, or social notions, like utopias (societies built according to some blueprint of what “makes sense”), even nationalities. When these ideas and crisp constructs inhabit our minds, we privilege them over other less elegant objects, those with messier and less tractable structures ([Location 408](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=408))
* Platonicity is what makes us think that we understand more than we actually do. ([Location 411](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=411))
* Models and constructions, these intellectual maps of reality, are not always wrong; they are wrong only in some specific applications. The difficulty is that a) you do not know beforehand (only after the fact) where the map will be wrong, and b) the mistakes can lead to severe consequences. These models are like potentially helpful medicines that carry random but very severe side effects. The Platonic fold is the explosive boundary where the Platonic mind-set enters in contact with messy reality, where the gap between what you know and what you think you know becomes dangerously wide. It is here that the Black Swan is produced. ([Location 413](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=413))
* Thus I rail against “sterile skepticism,” the kind we can do nothing about, and against the exceedingly theoretical language problems that have made much of modern philosophy largely irrelevant to what is derisively called the “general public.” ([Location 433](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=433))
* There is a contradiction; this book is a story, and I prefer to use stories and vignettes to illustrate our gullibility about stories and our preference for the dangerous compression of narratives. ([Location 440](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=440))
* You need a story to displace a story. Metaphors and stories are far more potent (alas) than ideas; they are also easier to remember and more fun to read. If I have to go after what I call the narrative disciplines, my best tool is a narrative. Ideas come and go, stories stay. ([Location 442](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=442))
* I call this overload of examples naïve empiricism—successions of anecdotes selected to fit a story do not constitute evidence. Anyone looking for confirmation will find enough of it to deceive himself—and no doubt his peers. ([Location 449](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=449))
* This implies the need to use the extreme event as a starting point and not treat it as an exception to be pushed under the rug. I also make the bolder (and more annoying) claim that in spite of our progress and the growth in knowledge, or perhaps because of such progress and growth, the future will be increasingly less predictable, while both human nature and social “science” seem to conspire to hide the idea from us. ([Location 454](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=454))
* The highly expected not happening is also a Black Swan. Note that, by symmetry, the occurrence of a highly improbable event is the equivalent of the nonoccurrence of a highly probable one. ([Location 476](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=476))
* Indeed, the more you know, the larger the rows of unread books. Let us call this collection of unread books an antilibrary. We tend to treat our knowledge as personal property to be protected and defended. It is an ornament that allows us to rise in the pecking order. ([Location 504](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=504))
* People don’t walk around with anti-résumés telling you what they have not studied or experienced (it’s the job of their competitors to do that), but it would be nice if they did. ([Location 507](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=507))
* Let us call an antischolar—someone who focuses on the unread books, and makes an attempt not to treat his knowledge as a treasure, or even a possession, or even a self-esteem enhancement device—a skeptical empiricist. ([Location 510](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=510))
* humans deal with knowledge—and our preference for the anecdotal over the empirical. ([Location 512](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=512))
* History doesn’t crawl; it jumps—“It ([Location 524](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=524))
* In a classical case of static thinking, nobody took into account the differentials in birthrate between communities and it was assumed that a slight Christian majority would remain permanent. ([Location 554](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=554))
* There were some obvious benefits in showing one’s ability to act on one’s opinions, and not compromising an inch to avoid “offending” or bothering others. ([Location 579](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=579))
* It is one thing to be cosmetically defiant of authority by wearing unconventional clothes—what social scientists and economists call “cheap signaling”—and another to prove willingness to translate belief into action. ([Location 583](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=583))
* Brain drain is hard to reverse, and some of the old refinement may be lost forever. ([Location 600](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=600))
* History is opaque. You see what comes out, not the script that produces events, the generator of history. There is a fundamental incompleteness in your grasp of such events, since you do not see what’s inside the box, how the mechanisms work. ([Location 609](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=609))
* They continuously ran counterfactuals in their minds, generating alternative scenarios that could have happened and prevented these historical ruptures, such as “if the Shah had not named this incompetent man as prime minister, we would still be there.” It was as if the historical rupture had a specific cause, and that the catastrophe could have been averted by removing that specific cause. ([Location 632](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=632))
* Much of what took place would have been deemed completely crazy with respect to the past. Yet it did not seem that crazy after the events. ([Location 644](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=644))
* These events were unexplainable, but intelligent people thought they were capable of providing convincing explanations for them—after the fact. Furthermore, the more intelligent the person, the better sounding the explanation. What’s more worrisome is that all these beliefs and accounts appeared to be logically coherent and devoid of inconsistencies. ([Location 649](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=649))
* History and societies do not crawl. They make jumps. They go from fracture to fracture, with a few vibrations in between. Yet we (and historians) like to believe in the predictable, small incremental progression. ([Location 675](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=675))
* While we have a highly unstable memory, a diary provides indelible facts recorded more or less immediately; it thus allows the fixation of an unrevised perception and enables us to later study events in their own context. ([Location 707](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=707))
* It is not just knowledge but information that can be of dubious value. It came to my notice that almost everybody was acquainted with current events in their smallest details. ([Location 726](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=726))
* They assign the same importance to the same sets of circumstances and cut reality into the same categories—once again the manifestation of Platonicity, the desire to cut reality into crisp shapes. ([Location 733](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=733))
* Categorizing is necessary for humans, but it becomes pathological when the category is seen as definitive, preventing people from considering the fuzziness of boundaries, let alone revising their categories. ([Location 740](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=740))
* Categorizing always produces reduction in true complexity. It is a manifestation of the Black Swan generator, that unshakable Platonicity that I defined in the Prologue. Any reduction of the world around us can have explosive consequences since it rules out some sources of uncertainty; it drives us to a misunderstanding of the fabric of the world. ([Location 760](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=760))
* I felt in my spine the weight of the epistemic arrogance of the human race. ([Location 779](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=779))
* To be genuinely empirical is to reflect reality as faithfully as possible; to be honorable implies not fearing the appearance and consequences of being outlandish. ([Location 936](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=936))
* Now being lazy, considering laziness as an asset, and eager to free up the maximum amount of time in my day to meditate and read, I immediately (but mistakenly) drew a conclusion. ([Location 954](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=954))
* So the distinction between writer and baker, speculator and doctor, fraudster and prostitute, is a helpful way to look at the world of activities. It separates those professions in which one can add zeroes of income with no greater labor from those in which one needs to add labor and time (both of which are in limited supply)—in other words, those subjected to gravity. ([Location 965](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=965))
* If I myself had to give advice, I would recommend someone pick a profession that is not scalable! A scalable profession is good only if you are successful; they are more competitive, produce monstrous inequalities, and are far more random, with huge disparities between efforts and rewards—a few can take a large share of the pie, leaving others out entirely at no fault of their own. ([Location 971](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=971))
* The alphabet allowed stories and ideas to be replicated with high fidelity and without limit, without any additional expenditure of energy on the author’s part for the subsequent performances. ([Location 1000](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1000))
* In the days of bards and troubadours, everyone had an audience. A storyteller, like a baker or a coppersmith, had a market, and the assurance that none from far away could dislodge him from his territory. Today, a few take almost everything; the rest, next to nothing. ([Location 1004](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1004))
* the supreme law of Mediocristan as follows: When your sample is large, no single instance will significantly change the aggregate or the total. ([Location 1042](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1042))
* Let us call these social matters, as they are man-made, as opposed to physical ones, like the size of waistlines. In Extremistan, inequalities are such that one single observation can disproportionately impact the aggregate, or the total. ([Location 1059](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1059))
* Mediocristan is where we must endure the tyranny of the collective, the routine, the obvious, and the predicted; Extremistan is where we are subjected to the tyranny of the singular, the accidental, the unseen, and the unpredicted. ([Location 1092](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1092))
* How can we logically go from specific instances to reach general conclusions? How do we know what we know? How do we know that what we have observed from given objects and events suffices to enable us to figure out their other properties? There are traps built into any kind of ([Location 1181](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1181))
* Think of the feeding again: What can a turkey learn about what is in store for it tomorrow from the events of yesterday? A lot, perhaps, but certainly a little less than it thinks, and it is just that “little less” that may make all the difference. ([Location 1188](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1188))
* The turkey problem can be generalized to any situation where the same hand that feeds you can be the one that wrings your neck. ([Location 1190](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1190))
* Let us go one step further and consider induction’s most worrisome aspect: learning backward. Consider that the turkey’s experience may have, rather than no value, a negative value. ([Location 1193](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1193))
* Mistaking a naïve observation of the past as something definitive or representative of the future is the one and only cause of our inability to understand the Black Swan. ([Location 1212](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1212))
* From the standpoint of the turkey, the nonfeeding of the one thousand and first day is a Black Swan. For the butcher, it is not, since its occurrence is not unexpected. So you can see here that the Black Swan is a sucker’s problem. In other words, it occurs relative to your expectation. ([Location 1244](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1244))
* but historical changes and technological implementations are Black Swans that can take decades. In general, positive Black Swans take time to show their effect while negative ones happen very quickly—it is much easier and much faster to destroy than to build. ([Location 1254](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1254))
* Above all, an erudite can be dissatisfied with his own knowledge, and such dissatisfaction is a wonderful shield against Platonicity, the simplifications of the five-minute manager, or the philistinism of the overspecialized scholar. Indeed, scholarship without erudition can lead to disasters. ([Location 1324](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1324))
* all I will be showing you in this book is how to avoid crossing the street blindfolded. ([Location 1336](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1336))
* someone who observed the turkey’s first thousand days (but not the shock of the thousand and first) would tell you, and rightly so, that there is no evidence of the possibility of large events, i.e., Black Swans. You are likely to confuse that statement, however, particularly if you do not pay close attention, with the statement that there is evidence of no possible Black Swans. ([Location 1381](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1381))
* NED, which stands for No Evidence of Disease. There is no such thing as END, Evidence of No Disease. ([Location 1436](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1436))
* a simple confusion of absence of evidence of the benefits of mothers’ milk with evidence of absence of the benefits ([Location 1440](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1440))
* We can get closer to the truth by negative instances, not by verification! It is misleading to build a general rule from observed facts. Contrary to conventional wisdom, our body of knowledge does not increase from a series of confirmatory observations, like the turkey’s. But there are some things I can remain skeptical about, and others I can safely consider certain. This makes the consequences of observations one-sided. ([Location 1470](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1470))
* Sometimes a lot of data can be meaningless; at other times one single piece of information can be very meaningful. It is true that a thousand days cannot prove you right, but one day can prove you to be wrong. ([Location 1477](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1477))
* But it remains the case that you know what is wrong with a lot more confidence than you know what is right. ([Location 1495](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1495))
* This, perhaps, is true self-confidence: the ability to look at the world without the need to find signs that stroke one’s ego. ([Location 1520](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1520))
* The narrative fallacy addresses our limited ability to look at sequences of facts without weaving an explanation into them, or, equivalently, forcing a logical link, an arrow of relationship, upon them. Explanations bind facts together. They make them all the more easily remembered; they help them make more sense. Where this propensity can go wrong is when it increases our impression of understanding. ([Location 1609](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1609))
* While narrativity comes from an ingrained biological need to reduce dimensionality, robots would be prone to the same process of reduction. Information wants to be reduced. ([Location 1615](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1615))
* not theorizing is an act—that theorizing can correspond to the absence of willed activity, the “default” option. It takes considerable effort to see facts (and remember them) while withholding judgment and resisting explanations. ([Location 1624](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1624))
* Another difference between the hemispheres is that the right brain deals with novelty. It tends to see the gestalt (the general, or the forest), in a parallel mode, while the left brain is concerned with the trees, in a serial mode. ([Location 1654](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1654))
* Our minds are like inmates, captive to our biology, unless we manage a cunning escape. ([Location 1684](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1684))
* perception of causation has a biological foundation. ([Location 1687](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1687))
* the central problems of probability and information theory. The first problem is that information is costly to obtain. The second problem is that information is also costly to store ([Location 1690](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1690))
* Finally, information is costly to manipulate and retrieve. ([Location 1693](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1693))
* may be just indexing problems. ([Location 1695](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1695))
* By finding the pattern, the logic of the series, you no longer need to memorize it all. You just store the pattern. And, as we can see here, a pattern is obviously more compact than raw information. You looked into the book and found a rule. It is along these lines that the great probabilist Andrey Nikolayevich Kolmogorov defined the degree of randomness; it is called “Kolmogorov complexity.” ([Location 1706](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1706))
* Myths impart order to the disorder of human perception and the perceived “chaos of human experience.” ([Location 1716](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1716))
* To view the potency of narrative, consider the following statement: “The king died and the queen died.” Compare it to “The king died, and then the queen died of grief.” This exercise, presented by the novelist E. M. Forster, shows the distinction between mere succession of information and a plot. But notice the hitch here: although we added information to the second statement, we effectively reduced the dimension of the total. The second sentence is, in a way, much lighter to carry and easier to remember; we now have one single piece of information in place of two. As we can remember it with less effort, we can also sell it to others, that is, market it better as a packaged idea. This, in a nutshell, is the definition and function of a narrative. ([Location 1721](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1721))
* Our tendency to perceive—to impose—narrativity and causality are symptoms of the same disease—dimension reduction. Moreover, like causality, narrativity has a chronological dimension and leads to the perception of the flow of time. Causality makes time flow in a single direction, and so does narrativity. ([Location 1732](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1732))
* Consider that we recall events in our memory all the while knowing the answer of what happened subsequently. It is literally impossible to ignore posterior information when solving a problem. This simple inability to remember not the true sequence of events but a reconstructed one will make history appear in hindsight to be far more explainable than it actually was—or is. ([Location 1736](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1736))
* In reality, memory is dynamic—not static—like a paper on which new texts (or new versions of the same text) will be continuously recorded, thanks to the power of posterior information. ([Location 1740](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1740))
* Memory is more of a self-serving dynamic revision machine: you remember the last time you remembered the event and, without realizing it, change the story at every subsequent remembrance. ([Location 1742](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1742))
* mere absence of nonsense may not be sufficient to make something true. ([Location 1768](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1768))
* This does not mean that we cannot talk about causes; there are ways to escape the narrative fallacy. How? By making conjectures and running experiments, or as we will see in Part Two (alas), by making testable predictions. ([Location 1771](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1771))
* Could it be that fiction reveals truth while nonfiction is a harbor for the liar? Could it be that fables and stories are closer to the truth than is the thoroughly fact-checked ABC News? Just consider that the newspapers try to get impeccable facts, but weave them into a narrative in such a way as to convey the impression of causality (and knowledge). There are fact-checkers, not intellect-checkers. Alas. ([Location 1817](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1817))
* Adding the because makes these matters far more plausible, and far more likely. Cancer from smoking seems more likely than cancer without a cause attached to it—an unspecified cause means no cause at all. ([Location 1840](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1840))
* The Black Swans we imagine, discuss, and worry about do not resemble those likely to be Black Swans. We worry about the wrong “improbable” events, ([Location 1849](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1849))
* “One death is a tragedy; a million is a statistic.” Statistics stay silent in us. ([Location 1903](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1903))
* The way to avoid the ills of the narrative fallacy is to favor experimentation over storytelling, experience over history, and clinical knowledge over theories. ([Location 1979](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=1979))
* Our emotional apparatus is designed for linear causality. For instance, if you study every day, you expect to learn something in proportion to your studies. If you feel that you are not going anywhere, your emotions will cause you to become demoralized. But modern reality rarely gives us the privilege of a satisfying, linear, positive progression: you may think about a problem for a year and learn nothing; then, unless you are disheartened by the emptiness of the results and give up, something will come to you in a flash. ([Location 2047](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2047))
* These nonlinear relationships are ubiquitous in life. Linear relationships are truly the exception; ([Location 2063](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2063))
    * **Note**: What is actually nonlinear that apears to be linear?
* that our highest currency is respect. ([Location 2090](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2090))
* The person involved in such gambles is paid in a currency other than material success: hope. ([Location 2096](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2096))
* As a matter of fact, your happiness depends far more on the number of instances of positive feelings, what psychologists call “positive affect,” than on their intensity when they hit. ([Location 2102](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2102))
* I presented the Black Swan as the outlier, the important event that is not expected to happen. But consider the opposite: the unexpected event that you very badly want to happen. ([Location 2148](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2148))
* If you engage in a Black Swan–dependent activity, it is better to be part of a group. ([Location 2168](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2168))
* Let us separate the world into two categories. Some people are like the turkey, exposed to a major blowup without being aware of it, while others play reverse turkey, prepared for big events that might surprise others. In some strategies and life situations, you gamble dollars to win a succession of pennies while appearing to be winning all the time. In others, you risk a succession of pennies to win dollars. In other words, you bet either that the Black Swan will happen or that it will never happen, two strategies that require completely different mind-sets. ([Location 2198](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2198))
* His premise was the following trivial point: some business bets in which one wins big but infrequently, yet loses small but frequently, are worth making if others are suckers for them and if you have the personal and intellectual stamina. But you need such stamina. ([Location 2210](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2210))
* The problem with business people, Nero realized, is that if you act like a loser they will treat you as a loser—you set the yardstick yourself. There is no absolute measure of good or bad. It is not what you are telling people, it is how you are saying it. But you need to remain understated and maintain an Olympian calm in front of others. ([Location 2241](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2241))
* History, I will repeat, is any succession of events seen with the effect of posteriority. ([Location 2272](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2272))
* As drowned worshippers do not write histories of their experiences (it is better to be alive for that), so it is with the losers in history, whether people or ideas. ([Location 2287](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2287))
* They fail to take into account the nightingales among the ancients’ work! Notice that close to two centuries ago people had an idealized opinion of their own past, just as we have an idealized opinion of today’s past. ([Location 2344](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2344))
* the mechanism of retrospective determinism we will find the “cause”—actually, we need to see the cause. ([Location 2366](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2366))
* Note the following central fact: every single rat, including the strong ones, will be weaker after the radiation than before. ([Location 2387](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2387))
* Owing to the invisibility of the dead rats, the more lethal the risks, the less visible they will be, since the severely victimized are likely to be eliminated from the evidence. ([Location 2397](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2397))
* In addition, our representation of the standard criminal might be based on the properties of those less intelligent ones who were caught. ([Location 2416](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2416))
* The dropouts, by definition, will no longer be part of the surviving gamblers’ community. This explains beginner’s luck. ([Location 2428](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2428))
* A ramification of the idea concerns our decision making under a cloud of possibilities. We see the obvious and visible consequences, not the invisible and less obvious ones. Yet those unseen consequences can be—nay, generally are—more meaningful. ([Location 2446](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2446))
* A life saved is a statistic; a person hurt is an anecdote. Statistics are invisible; anecdotes are salient. Likewise, the risk of a Black Swan is invisible. ([Location 2479](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2479))
* This bias causes the survivor to be an unqualified witness of the process. ([Location 2517](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2517))
* The reader can now see why I use Casanova’s unfailing luck as a generalized framework for the analysis of history, all histories. I generate artificial histories featuring, say, millions of Giacomo Casanovas, and observe the difference between the attributes of the successful Casanovas (because you generate them, you know their exact properties) and those an observer of the result would obtain. ([Location 2521](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2521))
* that we got here by accident does not mean that we should continue to take the same risks. ([Location 2543](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2543))
* anthropic cosmological argument, ([Location 2561](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2561))
* The reference point argument is as follows: do not compute odds from the vantage point of the winning gambler (or the lucky Casanova, or the endlessly bouncing back New York City, or the invincible Carthage), but from all those who started in the cohort. ([Location 2592](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2592))
* In each of these examples, we are taking a condition, survival, and looking for the explanations, instead of flipping the argument on its head and stating that conditional on such survival, one cannot read that much into the process, and should learn instead to invoke some measure of randomness ([Location 2615](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2615))
* But have the integrity to deliver your “because” very sparingly; try to limit it to situations where the “because” is derived from experiments, not backward-looking history. ([Location 2619](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2619))
* Tony, in spite of his lack of culture, has an enormous curiosity about the texture of reality, and his own erudition—to me, he is more scientific in the literal, though not in the social, sense than Dr. John. ([Location 2698](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2698))
* ludic fallacy—the attributes of the uncertainty we face in real life have little connection to the sterilized ones we encounter in exams and games. ([Location 2702](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2702))
* In real life you do not know the odds; you need to discover them, and the sources of uncertainty are not defined. ([Location 2744](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2744))
* Those who spend too much time with their noses glued to maps will tend to mistake the map for the territory. ([Location 2753](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2753))
* notion of probability that remains fuzzy throughout, as it needs to be, since such fuzziness is the very nature of uncertainty. Probability is a liberal art; it is a child of skepticism, ([Location 2762](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2762))
* Most of all we favor the narrated. ([Location 2824](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2824))
* beaming light on the unseen is costly in both computational and mental effort. ([Location 2828](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2828))
* Train yourself to spot the difference between the sensational and the empirical. ([Location 2841](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2841))
* Why on earth do we predict so much? Worse, even, and more interesting: Why don’t we talk about our record in predicting? Why don’t we see how we (almost) always miss the big events? I call this the scandal of prediction. ([Location 2909](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2909))
* epistemic arrogance, literally, our hubris concerning the limits of our knowledge. ([Location 2912](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2912))
* Epistemic arrogance bears a double effect: we overestimate what we know, and underestimate uncertainty, by compressing the range of possible uncertain states (i.e., by reducing the space of the unknown). ([Location 2951](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2951))
* the difference between what people actually know and how much they think they know. ([Location 2959](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=2959))
* Moral? 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. ([Location 3017](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3017))
* The increase in the information set did not lead to an increase in their accuracy; their confidence in their choices, on the other hand, went up markedly. Information proved to be toxic. ([Location 3033](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3033))
* We can already see the difference between “know-how” and “know-what.” The Greeks made a distinction between technē and epistēmē. The empirical school of medicine of Menodotus of Nicomedia and Heraclites of Tarentum wanted its practitioners to stay closest to technē (i.e., “craft”), and away from epistēmē (i.e., “knowledge,” “science”). ([Location 3055](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3055))
* You cannot ignore self-delusion. The problem with experts is that they do not know what they do not know. Lack of knowledge and delusion about the quality of your knowledge come together—the same process that makes you know less also makes you satisfied with your knowledge. ([Location 3083](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3083))
* His study exposed an expert problem: there was no difference in results whether one had a PhD or an undergraduate degree. Well-published professors had no advantage over journalists. 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. ([Location 3148](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3148))
* The “almost right” defense. Retrospectively, with the benefit of a revision of values and an informational framework, it is easy to feel that it was a close call. ([Location 3168](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3168))
* These “experts” were lopsided: on the occasions when they were right, they attributed it to their own depth of understanding and expertise; when wrong, it was either the situation that was to blame, since it was unusual, or, worse, they did not recognize that they were wrong and spun stories around it. They found it difficult to accept that their grasp was a little short. But this attribute is universal to all our activities: there is something in us designed to protect our self-esteem. ([Location 3173](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3173))
* I am not recommending that anyone become a hedgehog—rather, be a fox with an open mind. I know that history is going to be dominated by an improbable event, I just don’t know what that event will be. ([Location 3201](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3201))
* “statistically sophisticated or complex methods do not necessarily provide more accurate forecasts than simpler ones.” ([Location 3211](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3211))
    * **Note**: For real ljfe major events
* into geodesics, atmospheric sciences, or political science, instead of incorporating these fields into his studies and accepting that his field does not exist in isolation. ([Location 3234](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3234))
* nerd effect, which stems from the mental elimination of off-model risks, or focusing on what you know. You view the world from within a model. ([Location 3267](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3267))
* the longer you wait, the longer you will be expected to wait. ([Location 3308](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3308))
* The policies we need to make decisions on should depend far more on the range of possible outcomes than on the expected final number. ([Location 3340](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3340))
* The second fallacy lies in failing to take into account forecast degradation as the projected period lengthens. We do not realize the full extent of the difference between near and far futures. ([Location 3345](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3345))
* that it is the lower bound of estimates (i.e., the worst case) that matters when engaging in a policy—the worst case is far more consequential than the forecast itself. This is particularly true if the bad scenario is not acceptable. ([Location 3359](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3359))
* It is often said that “is wise he who can see things coming.” Perhaps the wise one is the one who knows that he cannot see things far away. ([Location 3362](https://readwise.io/to_kindle?action=open&asin=B00139XTG4&location=3362))