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1 
Antifragile 
How to live in a world we don’t understand 
By Nassim Nicholas Taleb 
Presented By Prof. Eon Smit 
Inspiring thought leadership across Africa 
Date: September 2014
2 
“Likewise, the government-sponsored institution Fanny Mae, when I Look at their risks, seems to be setting on a barrel of dynamite, vulnerable to the slightest hiccup. But do not worry: their large staff of scientists deemed these event “unlikely””
The Author 
3 
Education 
•Schooling in Lebanon (exiled at 15) 
•PhD (University of Paris) 
•MBA (Wharton) 
Career 
•Independent pit trader (Chicago Mercantile Exchange) 
•Owned derivatives firm for six years 
•Senior derivatives trader in Credit Suisse, UBS, BNP-Paribas, Indo Suez, Deutsche Bank 
•Taught derivatives at New York University 
•Dean’s professor at University of Massachusetts 
•Professor of Risk-Engineering at NYU-Polytechnic
The Author……..continued 
4 
•Visiting Professor, London Business School 
•Advisor on security, model risk, risk management 
•Principal of hedge fund and director of companies 
•Author and speaker 
Interest 
•Scholar of applied probability and risk management 
•Role of high-impact of events 
•Establishing roles for decision making under incomplete information 
•Shielding individuals and society from Black Swans 
•Philosophy, medicine, classical literature, economics
The Book 
5 
•Follow - up to “The Black Swan” 
•Book consist of seven essays – opposite of a textbook – contains autobiographical musings mixed with parables and philosophical and scientific investigations 
•Multidisciplinary (history, economics, philosophy, sociology, methodology of science, psychology, finance, forecasting, mathematics, linguistics, comparative culture, storytelling, autobiographical) 
•Brilliant in intellectual sweep, but opaque in places 
•Rich in intellectual gems and quotes
The Book…………continued 
6 
•Rich in newly-developed vocabulary 
•Rich in barbed-wire side-slaps, invective, dismissive of business schools, academics, bureaucrats 
•Judges people by name with “uncompromising sincerity” 
•Degree of self-indulgence/regards himself as a man of great erudition 
•Leaves the reader with the uncomfortable feeling that his examples have been selected purposefully to support his thesis.
The arguments 
7 
•Black Swan is an extremely rare event/severe impact/retrospective predictability 
•Positive examples: Internet/Google/JK Rawlings/Taleb 
•Negative examples: Market crash 1987/Bank failures 2008/pandemics/Demise of the Soviet block/ 9/11 
•At epistemological level it illustrates a severe limitation to our learning from observations and experience and hence the fragility of knowledge 
•Unpredictable – Absence of evidence is not evidence of absence/Falsification
The arguments……..continued 
8 
•The family of disorder: uncertainty, variability, imperfect knowledge, change, chaos, volatility, entropy, time, the unknown, randomness, turmoil, stressor, error, dispersion of outcomes, unknowledge 
•The antifragile thrives when exposed to members of this family of disorder/the fragile is harmed by it/the resilient resists shocks and stays the same 
•Aim is to build a guide to non-predictive decision making/measure fragility – then reduce fragility or harness fragility 
•Simple test of asymmetry – anything with more upside than downside from random events (shocks) is antifragile
The arguments………continued 
9 
•Depriving antifragile systems from volatility/stress/ randomness will harm them – examples muscle atrophy/top-down policies/neurotically overprotective parents/absence of “skin-in-the game”/ bureaucrats/ bankers/academics or consultants with no real downside/ accountability 
•Bottom-up processes thrive under stress and disorder – discovery, innovation, progress depends on antifragile tinkering, aggressive risk bearing rather than formal education 
•Mother Nature is antifragile and best manager of Black Swans
The arguments………continued 
10 
•Debunks the illusion that world functions due to programmed design, university research and bureaucratic funding /evidence that this is an illusion/“lecturing birds how to fly” 
•Fragilista causes fragility because of mistakenly thinking they understand what is going on / they deprive antifragile systems of errors / mistaking organisms for machines / engaging in policies and actions where benefits are small and visible, side effects potentially severe and invisible/medical overprescribing/interventionist social planners/ soccer mums/financial experts using risks models that destroy banking systems
Examples of exposure in the Triad 
11 
Class 
Fragile 
Robust 
Antifragile 
Greek Mythology 
Sword of Damocles 
Phoenix 
Hydra 
Errors 
Hates mistakes 
Mistakes just information 
Loves mistakes 
Financial dependence 
Corporate employment 
Dentist, dermatologist 
Taxi driver, artisan 
Political systems 
Nation-state, centralised 
Collection of city states, decentralised 
Knowledge 
Academic 
Expertise 
Erudition 
Economic 
Bureaucrats 
Entrepreneurs 
Reputation 
Middle Class 
Minimum-wage earners 
Bohemian, aristocracy, old money 
Medicine 
Additive treatment 
Subtractive treatment 
Stress 
Chronic stressors 
Acute stressors 
with recovery 
Medicine 
Absence of poison 
Hormesis 
Aeronautics 
Automated flying 
Hand-on experience
Antifragility………continued 
12 
•Post-traumatic growth building character 
•Inverse hormesis/absence of stressors/ horseracing/ 
busy humans/soft speaking/white noise 
•Redundancy/over insurance of nature/two kidneys 
•Risk management focuses on worst outcome in past/Fukushima/Greenspan 
•Nature assumes worse harm is possible 
•Weightlifting examples 
•Antifragility of riots/love/book banning
Benefiting from mild stressors 
13 
Mechanic and organic 
Non-complex Complex 
Needs continuous repair and maintenance 
Self-healing 
Hates randomness 
Loves variation in small doses 
No need for recovery 
Needs recovery between stressors 
No or little independence 
High degree of independence 
Stressors cause fatigue 
Absence of stressors cause atrophy 
Age with use 
Age with disuse 
Undercompensates from shocks 
Overcompensates from shocks
Benefiting from mild stressors…….cont. 
14 
•Stressors are information/stay in space/pain is risk management information/weightlifting also strengthening bones 
•Crimes against children – eliminating mood swings 
•Learning a new language 
•The thirst for chance/adventure – sucking out randomness by touristification of life/opposite of ancestral life 
•Antifragility by layers/natural organisms/restaurants 
•Parts may be fragile to make organism antifragile/ evolution/tension between nature and individual organisms
Benefiting from mild stressors…….cont. 
15 
•Organisms have one lifespan/next generation learns from errors arising from external randomness/also applies to historical systems e.g. single empire dominance 
•Antibiotic resistance 
•Learning from others’ mistakes/Titanic/Fukushima Plane crashes/learning through errors may cause reliability in yourself or in others 
•Bailouts transfer fragility from the collective to the unfit 
•Entrepreneurs are at the source of our antifrigility
The denial of Antifragility 
16 
•Hurting systems by playing conductor 
•Procrustean bed/cushy and comfortable/harmful modernity 
•The bank clerk and taxi driver 
•Switzerland/does not have large central government or Central Bank 
•Stability in Switzerland due to decentralised administration/local efficiencies vs. bureaucracies/ lobbyists 
•Mediocristan and extremistan/caloric intake vs. novel sales/bell curve vs. fat tails
The denial of Antifragility….cont. 
17 
•Turkey problem/mission how not to be a turkey/ antifragile 
•Risks in substituting large nation states for small state- lings and city-states in constant tension and shifting alliances
Loving some randomness 
18 
•The governors of Maxwell leading to machine breakdown – the dangers of control 
•The folly of fixing prices and eliminating noise traders – in praise of volatility 
•The punctual husband/small forest fires/weakness caused by long periods of prosperity/absence of fluctuations in markets will worsen fragility 
•Buridan’s donkey – adding randomness/stochastic resonance/annealing in metallurgy/tapping the barometer/stabilising chaotic systems/in praise of regicide/the ancient’s use of random draws
Loving some randomness…..cont. 
19 
•In praise of small wars/the Great War/Egypt before 2011 riots/the risk in Saudi Arabia/US Middle East policy since 9/11 
•Introduces “Modernity” – large scale domination of environment, smoothing of jaggedness, stifling of stressors/nanny-state/lion in zoo/violence and financial indiscipline transferred from individual to state 
•Introduces “iatrogenic”- hidden or delayed damage of treatment in excess of benefits/ tonsillectomies/ bloodletting/”hospital fever”/agency problem/first do no harm
Loving some randomness…..cont. 
20 
•The errors of “theory”/in praise of phenomenology/ the observation of empirical regularity without a visible theory/true in social science – not in physics where errors get smaller 
•The iatrogenics of Greenspan and Brown 
•Overzealous editor 
•Emphasizes the natural fragility of systems and their ability to take care of themselves/looking for a systematic protocol to determine when and where not to intervene
Loving some randomness…..cont. 
21 
•In praise of procrastination/doctors refraining from operations/preventing massive losses/preventing calamities/heroes not rewarded 
•Difference between signal and noise/the neurotic and imperturbable/data frequency and signal to noise
Prediction as child modernity 
22 
•Prediction is impossible and harmful/causes iatrogenics to risk-takers 
•Leads to central idea 
-Detecting fragility is easier than prediction 
-First make things robust to defects and forecasting errors/making lemonade from lemons 
-Antifragility is how things move forward under stressors, also time 
•Focus on exposure to failure making prediction irrelevant/make world greed proof/disaster- proof/economic crisis proof
Prediction as child modernity….cont. 
23 
•Remember, in Black Swan terrain events are unpredictable and consequential 
•What can be predicted/someone who predicts will be fragile to prediction errors, take more risks, perhaps fail
Solving Antifragility 
24 
•Seneca the Stoic philosopher – advanced a certain indifference to fate 
•Mental exercises to write off possessions/ psychological insurance/ planning for shipwreck/resignation letter/mental exercise of worst thing happening 
•Seneca showed preference for wealth without being harmed by poverty/upside-downside asymmetry 
• Fragility implies more to lose than to gain, equals more downside than upside/equals unfavourable asymmetry
Solving Antifragility…..cont. 
25 
•Proposes barbell strategy/extreme risk aversion coupled with extreme risk loving on other side 
•Examples: Investing/Cheating with rock star/Writers being civil servants/Staff on plane/personal risks/social policy – protecting the weak, the strong do the job 
•The barbell is the domestication of uncertainty 
•Thales’ rental of oil presses and Aristotle’s mistake – the absence of knowledge 
•The option – the right and the obligation 
•Life is about options/lunch in London/tenant of a rent-controlled apartment/all you need is the wisdom to recognise favourable outcomes
Solving Antifragility…..cont. 
26 
•Nature understands optionality/spontaneous abortion/trial and error tinkering 
•Option = asymmetry + rationality/Fragile has no option/antifragile needs to select best/banks vs. technology 
•Life is long gamma 
•Wheeled-suitcase demonstrates that technology is only trivial retrospectively/demonstrates lack of imagination 
•Randomness plays a role at two levels – the inventor and the implementation
Solving Antifragility…..cont. 
27 
•Investigates role of academia in technological know- how and practise/learning birds to fly/questions causality/ illusions of cause and effect/education’s relation with wealth and economic growth
Lecturing birds how-to-fly-effects 
28 
Field 
Origination and development (textbook version) 
Real origination and developments 
Jet engine 
Physicists 
Tinkering engineers with no theoretical insight 
Architecture 
Euclidean geometry 
Heuristic 
and secret guild recipes 
Cybernetics 
Norbert Wiener 
Programmers "wiki-style" 
Derivative formulas 
Black, Sholes, Merton 
Traders and practitioners 
Medicine 
Biological understanding 
Luck, trial and error, side affects of other medicines 
Industrial Revolution 
Growth in knowledge, scientific revolution 
Adventurers, hobbyists 
Technology 
Formal science 
Technology/business
Remaining fragilities – via negativa 
29 
•Describing God and sculpturing David 
•Charlatans will only offer positive advice/ten steps for …/success depends on avoiding the negatives 
•Knowledge comes from a subtractive epistemology /one small observation can disprove/millions can hardly confirm/what you know is robust, the opposite is fragile and speculative 
•Simple forecasting models better than the complicated/”fast and frugal” heuristics good for decisions/less is more
Remaining fragilities… cont. 
30 
•Extension of Pareto principle/1% modification of systems can lower fragility by 99%/small number of homeless, customers, disgruntled employees, ill, cost overruns account for most problems or largest costs 
•More data lead to missing the main point/more than one reason for doing something, don’t do it/French army/long bio 
•Antifragility co-exists with passing time 
•Try to forecast future surroundings in twenty years/intuition is to add/test is to take away
Remaining fragilities… cont. 
31 
•Consider Verne/Wells/Orwell – almost everything imagined never tool place/today’s new tools were not foreseen 
•Amongst the antifragile: cooking utensils, restaurants, wine, glasses, chairs, bicycles, literature 
•Difference between perishable and non-perishable – technologies that age are already dead 
•Fragility in handling information – books, scientific papers, conferences proceedings/what to read
Remaining fragilities… cont. 
32 
•The role of prophets 
•Subtraction of medical expenses bound to extend lives/same holds for abstention from food (in general), some products in particular
Addressing ethics 
33 
•Skin in the game mitigates fragility 
•Hammurabi’s code/Getting on a plane without a pilot/voting for and sending a son to war/talkers have a free option – no opinion without risk 
•Privilege used to come with obligations 
•Predicting – free option 
•Friedman and Stiglitz/Stiglitz syndrome = fragilista + ex-post cherry picking 
•Never ask anyone for their opinion, forecast or recommendation – ask after their portfolio/ same with doctors/Tarek’s armies/Lawrence of Arabia vs Meyer Lansky

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Living in an Unpredictable World

  • 1. 1 Antifragile How to live in a world we don’t understand By Nassim Nicholas Taleb Presented By Prof. Eon Smit Inspiring thought leadership across Africa Date: September 2014
  • 2. 2 “Likewise, the government-sponsored institution Fanny Mae, when I Look at their risks, seems to be setting on a barrel of dynamite, vulnerable to the slightest hiccup. But do not worry: their large staff of scientists deemed these event “unlikely””
  • 3. The Author 3 Education •Schooling in Lebanon (exiled at 15) •PhD (University of Paris) •MBA (Wharton) Career •Independent pit trader (Chicago Mercantile Exchange) •Owned derivatives firm for six years •Senior derivatives trader in Credit Suisse, UBS, BNP-Paribas, Indo Suez, Deutsche Bank •Taught derivatives at New York University •Dean’s professor at University of Massachusetts •Professor of Risk-Engineering at NYU-Polytechnic
  • 4. The Author……..continued 4 •Visiting Professor, London Business School •Advisor on security, model risk, risk management •Principal of hedge fund and director of companies •Author and speaker Interest •Scholar of applied probability and risk management •Role of high-impact of events •Establishing roles for decision making under incomplete information •Shielding individuals and society from Black Swans •Philosophy, medicine, classical literature, economics
  • 5. The Book 5 •Follow - up to “The Black Swan” •Book consist of seven essays – opposite of a textbook – contains autobiographical musings mixed with parables and philosophical and scientific investigations •Multidisciplinary (history, economics, philosophy, sociology, methodology of science, psychology, finance, forecasting, mathematics, linguistics, comparative culture, storytelling, autobiographical) •Brilliant in intellectual sweep, but opaque in places •Rich in intellectual gems and quotes
  • 6. The Book…………continued 6 •Rich in newly-developed vocabulary •Rich in barbed-wire side-slaps, invective, dismissive of business schools, academics, bureaucrats •Judges people by name with “uncompromising sincerity” •Degree of self-indulgence/regards himself as a man of great erudition •Leaves the reader with the uncomfortable feeling that his examples have been selected purposefully to support his thesis.
  • 7. The arguments 7 •Black Swan is an extremely rare event/severe impact/retrospective predictability •Positive examples: Internet/Google/JK Rawlings/Taleb •Negative examples: Market crash 1987/Bank failures 2008/pandemics/Demise of the Soviet block/ 9/11 •At epistemological level it illustrates a severe limitation to our learning from observations and experience and hence the fragility of knowledge •Unpredictable – Absence of evidence is not evidence of absence/Falsification
  • 8. The arguments……..continued 8 •The family of disorder: uncertainty, variability, imperfect knowledge, change, chaos, volatility, entropy, time, the unknown, randomness, turmoil, stressor, error, dispersion of outcomes, unknowledge •The antifragile thrives when exposed to members of this family of disorder/the fragile is harmed by it/the resilient resists shocks and stays the same •Aim is to build a guide to non-predictive decision making/measure fragility – then reduce fragility or harness fragility •Simple test of asymmetry – anything with more upside than downside from random events (shocks) is antifragile
  • 9. The arguments………continued 9 •Depriving antifragile systems from volatility/stress/ randomness will harm them – examples muscle atrophy/top-down policies/neurotically overprotective parents/absence of “skin-in-the game”/ bureaucrats/ bankers/academics or consultants with no real downside/ accountability •Bottom-up processes thrive under stress and disorder – discovery, innovation, progress depends on antifragile tinkering, aggressive risk bearing rather than formal education •Mother Nature is antifragile and best manager of Black Swans
  • 10. The arguments………continued 10 •Debunks the illusion that world functions due to programmed design, university research and bureaucratic funding /evidence that this is an illusion/“lecturing birds how to fly” •Fragilista causes fragility because of mistakenly thinking they understand what is going on / they deprive antifragile systems of errors / mistaking organisms for machines / engaging in policies and actions where benefits are small and visible, side effects potentially severe and invisible/medical overprescribing/interventionist social planners/ soccer mums/financial experts using risks models that destroy banking systems
  • 11. Examples of exposure in the Triad 11 Class Fragile Robust Antifragile Greek Mythology Sword of Damocles Phoenix Hydra Errors Hates mistakes Mistakes just information Loves mistakes Financial dependence Corporate employment Dentist, dermatologist Taxi driver, artisan Political systems Nation-state, centralised Collection of city states, decentralised Knowledge Academic Expertise Erudition Economic Bureaucrats Entrepreneurs Reputation Middle Class Minimum-wage earners Bohemian, aristocracy, old money Medicine Additive treatment Subtractive treatment Stress Chronic stressors Acute stressors with recovery Medicine Absence of poison Hormesis Aeronautics Automated flying Hand-on experience
  • 12. Antifragility………continued 12 •Post-traumatic growth building character •Inverse hormesis/absence of stressors/ horseracing/ busy humans/soft speaking/white noise •Redundancy/over insurance of nature/two kidneys •Risk management focuses on worst outcome in past/Fukushima/Greenspan •Nature assumes worse harm is possible •Weightlifting examples •Antifragility of riots/love/book banning
  • 13. Benefiting from mild stressors 13 Mechanic and organic Non-complex Complex Needs continuous repair and maintenance Self-healing Hates randomness Loves variation in small doses No need for recovery Needs recovery between stressors No or little independence High degree of independence Stressors cause fatigue Absence of stressors cause atrophy Age with use Age with disuse Undercompensates from shocks Overcompensates from shocks
  • 14. Benefiting from mild stressors…….cont. 14 •Stressors are information/stay in space/pain is risk management information/weightlifting also strengthening bones •Crimes against children – eliminating mood swings •Learning a new language •The thirst for chance/adventure – sucking out randomness by touristification of life/opposite of ancestral life •Antifragility by layers/natural organisms/restaurants •Parts may be fragile to make organism antifragile/ evolution/tension between nature and individual organisms
  • 15. Benefiting from mild stressors…….cont. 15 •Organisms have one lifespan/next generation learns from errors arising from external randomness/also applies to historical systems e.g. single empire dominance •Antibiotic resistance •Learning from others’ mistakes/Titanic/Fukushima Plane crashes/learning through errors may cause reliability in yourself or in others •Bailouts transfer fragility from the collective to the unfit •Entrepreneurs are at the source of our antifrigility
  • 16. The denial of Antifragility 16 •Hurting systems by playing conductor •Procrustean bed/cushy and comfortable/harmful modernity •The bank clerk and taxi driver •Switzerland/does not have large central government or Central Bank •Stability in Switzerland due to decentralised administration/local efficiencies vs. bureaucracies/ lobbyists •Mediocristan and extremistan/caloric intake vs. novel sales/bell curve vs. fat tails
  • 17. The denial of Antifragility….cont. 17 •Turkey problem/mission how not to be a turkey/ antifragile •Risks in substituting large nation states for small state- lings and city-states in constant tension and shifting alliances
  • 18. Loving some randomness 18 •The governors of Maxwell leading to machine breakdown – the dangers of control •The folly of fixing prices and eliminating noise traders – in praise of volatility •The punctual husband/small forest fires/weakness caused by long periods of prosperity/absence of fluctuations in markets will worsen fragility •Buridan’s donkey – adding randomness/stochastic resonance/annealing in metallurgy/tapping the barometer/stabilising chaotic systems/in praise of regicide/the ancient’s use of random draws
  • 19. Loving some randomness…..cont. 19 •In praise of small wars/the Great War/Egypt before 2011 riots/the risk in Saudi Arabia/US Middle East policy since 9/11 •Introduces “Modernity” – large scale domination of environment, smoothing of jaggedness, stifling of stressors/nanny-state/lion in zoo/violence and financial indiscipline transferred from individual to state •Introduces “iatrogenic”- hidden or delayed damage of treatment in excess of benefits/ tonsillectomies/ bloodletting/”hospital fever”/agency problem/first do no harm
  • 20. Loving some randomness…..cont. 20 •The errors of “theory”/in praise of phenomenology/ the observation of empirical regularity without a visible theory/true in social science – not in physics where errors get smaller •The iatrogenics of Greenspan and Brown •Overzealous editor •Emphasizes the natural fragility of systems and their ability to take care of themselves/looking for a systematic protocol to determine when and where not to intervene
  • 21. Loving some randomness…..cont. 21 •In praise of procrastination/doctors refraining from operations/preventing massive losses/preventing calamities/heroes not rewarded •Difference between signal and noise/the neurotic and imperturbable/data frequency and signal to noise
  • 22. Prediction as child modernity 22 •Prediction is impossible and harmful/causes iatrogenics to risk-takers •Leads to central idea -Detecting fragility is easier than prediction -First make things robust to defects and forecasting errors/making lemonade from lemons -Antifragility is how things move forward under stressors, also time •Focus on exposure to failure making prediction irrelevant/make world greed proof/disaster- proof/economic crisis proof
  • 23. Prediction as child modernity….cont. 23 •Remember, in Black Swan terrain events are unpredictable and consequential •What can be predicted/someone who predicts will be fragile to prediction errors, take more risks, perhaps fail
  • 24. Solving Antifragility 24 •Seneca the Stoic philosopher – advanced a certain indifference to fate •Mental exercises to write off possessions/ psychological insurance/ planning for shipwreck/resignation letter/mental exercise of worst thing happening •Seneca showed preference for wealth without being harmed by poverty/upside-downside asymmetry • Fragility implies more to lose than to gain, equals more downside than upside/equals unfavourable asymmetry
  • 25. Solving Antifragility…..cont. 25 •Proposes barbell strategy/extreme risk aversion coupled with extreme risk loving on other side •Examples: Investing/Cheating with rock star/Writers being civil servants/Staff on plane/personal risks/social policy – protecting the weak, the strong do the job •The barbell is the domestication of uncertainty •Thales’ rental of oil presses and Aristotle’s mistake – the absence of knowledge •The option – the right and the obligation •Life is about options/lunch in London/tenant of a rent-controlled apartment/all you need is the wisdom to recognise favourable outcomes
  • 26. Solving Antifragility…..cont. 26 •Nature understands optionality/spontaneous abortion/trial and error tinkering •Option = asymmetry + rationality/Fragile has no option/antifragile needs to select best/banks vs. technology •Life is long gamma •Wheeled-suitcase demonstrates that technology is only trivial retrospectively/demonstrates lack of imagination •Randomness plays a role at two levels – the inventor and the implementation
  • 27. Solving Antifragility…..cont. 27 •Investigates role of academia in technological know- how and practise/learning birds to fly/questions causality/ illusions of cause and effect/education’s relation with wealth and economic growth
  • 28. Lecturing birds how-to-fly-effects 28 Field Origination and development (textbook version) Real origination and developments Jet engine Physicists Tinkering engineers with no theoretical insight Architecture Euclidean geometry Heuristic and secret guild recipes Cybernetics Norbert Wiener Programmers "wiki-style" Derivative formulas Black, Sholes, Merton Traders and practitioners Medicine Biological understanding Luck, trial and error, side affects of other medicines Industrial Revolution Growth in knowledge, scientific revolution Adventurers, hobbyists Technology Formal science Technology/business
  • 29. Remaining fragilities – via negativa 29 •Describing God and sculpturing David •Charlatans will only offer positive advice/ten steps for …/success depends on avoiding the negatives •Knowledge comes from a subtractive epistemology /one small observation can disprove/millions can hardly confirm/what you know is robust, the opposite is fragile and speculative •Simple forecasting models better than the complicated/”fast and frugal” heuristics good for decisions/less is more
  • 30. Remaining fragilities… cont. 30 •Extension of Pareto principle/1% modification of systems can lower fragility by 99%/small number of homeless, customers, disgruntled employees, ill, cost overruns account for most problems or largest costs •More data lead to missing the main point/more than one reason for doing something, don’t do it/French army/long bio •Antifragility co-exists with passing time •Try to forecast future surroundings in twenty years/intuition is to add/test is to take away
  • 31. Remaining fragilities… cont. 31 •Consider Verne/Wells/Orwell – almost everything imagined never tool place/today’s new tools were not foreseen •Amongst the antifragile: cooking utensils, restaurants, wine, glasses, chairs, bicycles, literature •Difference between perishable and non-perishable – technologies that age are already dead •Fragility in handling information – books, scientific papers, conferences proceedings/what to read
  • 32. Remaining fragilities… cont. 32 •The role of prophets •Subtraction of medical expenses bound to extend lives/same holds for abstention from food (in general), some products in particular
  • 33. Addressing ethics 33 •Skin in the game mitigates fragility •Hammurabi’s code/Getting on a plane without a pilot/voting for and sending a son to war/talkers have a free option – no opinion without risk •Privilege used to come with obligations •Predicting – free option •Friedman and Stiglitz/Stiglitz syndrome = fragilista + ex-post cherry picking •Never ask anyone for their opinion, forecast or recommendation – ask after their portfolio/ same with doctors/Tarek’s armies/Lawrence of Arabia vs Meyer Lansky