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The Author
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
Deans professor at University of Massachusetts
Professor of Risk-Engineering at NYU-Polytechnic
The Author..continued
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
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The Book
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
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The Bookcontinued
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
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
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 argumentscontinued
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
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The argumentscontinued
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
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Fragile
Robust
Antifragile
Greek Mythology
Sword of Damocles
Phoenix
Hydra
Errors
Hates mistakes
Financial
dependence
Corporate employment
Dentist, dermatologist
Political systems
Nation-state, centralised
Knowledge
Academic
Economic
Bureaucrats
Reputation
Middle Class
Medicine
Additive treatment
Stress
Chronic stressors
Medicine
Absence of poison
Automated flying
Aeronautics
Expertise
Erudition
Entrepreneurs
Antifragilitycontinued
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
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Self-healing
No or little independence
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Solving Antifragility
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
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Solving Antifragility..cont.
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Solving Antifragility..cont.
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
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Solving Antifragility..cont.
Investigates role of academia in technological knowhow and practise/learning birds to fly/questions
causality/ illusions of cause and effect/educations
relation with wealth and economic growth
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Jet engine
Physicists
Architecture
Euclidean geometry
Heuristic
and secret guild recipes
Cybernetics
Norbert Wiener
Programmers "wiki-style"
Derivative formulas
Medicine
Biological understanding
Industrial Revolution
Growth in knowledge,
scientific revolution
Adventurers, hobbyists
Technology
Formal science
Technology/business
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Addressing ethics
Skin in the game mitigates fragility
Hammurabis 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/Tareks armies/Lawrence of Arabia vs
Meyer Lansky
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