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Book Summary: Antifragile by Nassim Taleb

https://rkirti.wordpress.com/2016/03/12/book-summary-antifragile-by-nassim-taleb/
Antifragile a term used to mean the opposite of fragile, and denote
things that gain from disorder, chaos, stressors. It is not the same thing
as robust or resilient. Fragile things are negatively impacted by
uncertainty, stress. Robust things are unimpacted by them. Antifragile
things actually grow and flourish in the face of uncertainty and stress.
The analogy wind puts out a candle, but encourages a fire embodies
this.
This is an interesting and important concept to think about as it is all
around us in nature and evolution only the antifragile setups could
have lasted billions of years in an unpredictable universe. Yet, no
known language has a word for the exact opposite of fragile, leading
the author to coin antifragile.
Human emotions are a good example to understand antifragile
behavior thoughts or emotions such as anger and bitterness grow the
more they are suppressed. Countless stories tell the tale of someone
whose love/attraction for their chosen ones grows in spite of emotional
abuse or mistreatment from the person they desire.
Fragilistas A condescending term the author uses for folks who cause
more harm, while trying to do good, by being overprotective and
encouraging fragility. This includes overprotective parents who shield
their kids from harm, medical experts who prescribe more medication
for every small issue rather than helping develop immunity and health.
Being antifragile implies thriving on a number of small mistakes. Silicon
Valley is cited as an example of antifragile-ism. Research that is narrow
and focused is fragile adding in random tinkering makes it antifragile.
Post-traumatic stress disorder is an instance of fragility. Post-traumatic
growth (e.g. paraplegics finding themselves gradually more capable
and thriving in life after losing their limbs) is an example of antifragility.
Chronic stressors are small (in impact), low-level stressors that are
repetitive, occur often in our environment and increase fragility. The
continuous stress of a boss or bad commute is an example of this. On
the other hand, what the author calls acute stressors with recovery
are relatively infrequent events, that start with an unexpected
Book Summary: Antifragile by Nassim Taleb
https://rkirti.wordpress.com/2016/03/12/book-summary-antifragile-by-nassim-taleb/
challenge (e.g. snake appearing out of nowhere) and end with
conquering or containing that challenge. Acute stressors increase
antifragility.
The economic system is inherently fragile. Unlike, say, a bunch of
restaurants in an area (fragile individually, antifragile as a whole
unpopular or bad restaurants will go down in favor of better liked
ones), globalized economic systems operate as one entity errors
spread and compound. It is not possible to have small mistakes and
learn from them, in a manner like the global aviation community learns
from one major plane crash.
Common human mistake absence of evidence (confirming harm) is
the same as evidence of absence (of harm itself). This is akin to a
group of turkeys fed well months before Thanksgiving, that humans
absolutely love them. The butchering days before Thanksgiving comes
as a black swan event! Not being a turkey starts with figuring out the
difference between true and perceived/manufactured stability.
Excess intervention (as a promoter of fragility) it depletes mental and
economic resources, it is rarely available when it is needed the most.
Time is the mother of all stressors more time, more events and more
randomness.
Social, economic and cultural life lie in the Black Swan domain trying
to predict that is being a turkey predicting its fate (with stable but
absolutely incorrect info).
Move the discourse from trying to predict risk to trying to predict
fragility (and develop antifragility.
Thoughts on becoming anti-fragile:
Follow stoicism be immune to misfortune.
From the authors own toolbox of experiences at a job, start
each day expecting the worst case to come true. The rest of the day
is then a bonus. Before you start a job, write the resignation letter,
put it in a drawer, lock it away and then youll find yourself free
each day at the job, knowing that you made it easy to quit.
Book Summary: Antifragile by Nassim Taleb
https://rkirti.wordpress.com/2016/03/12/book-summary-antifragile-by-nassim-taleb/
A Stoic sage is someone who transforms fear into prudence, pain into
information, mistakes into initiation, and desire into undertaking.
You want to create an upside-downside asymmetry if unexpected
events create less downside than upside, then you are antifragile. If
they dont create downside (true for stoics), you are at least robust.
Implement antifragility like a barbell with the two ends of the barbells
being two approaches paranoia at one end (for negative Black Swan
events) and aggressive risk-taking at the other end (for positive Black
Swan events). But these must be implemented as two separate
strategies for two different categories (not mixed into one middle of
the road approach, that leads to nowhere).
Stoicism is a domestication, not elimination of emotions. The barbell
approach (adopt a mix of two extreme approaches) is a domestication,
not elimination of uncertainty.
Overcompensation and overreaction
These are baked into good systems.
Theres a reason the boss assigns the new pressing task to the
busiest person on the team (apart from them being reliable). The
more strained you are, the more your intellectual abilities are
available for use. (N.Taleb merely touches upon this, Kahneman has
a detailed discussion of this in Thinking Fast and Slow).
Humans are bad at estimating worst case scenarios, and it is
precisely in those low-probability worst case scenarios that the
spare capacity or inefficiency becomes a boon, or very efficient.
Only a fool would think that the tallest mountain in the world is
the tallest one that she has visited. However, most humans base
their assumptions of the worst case on the worst case that they
have seen or heard of in the past.
Those from whom we benefit arent those who have tried to help us,
rather those who have tried, and eventually failed, to harm us.
Anything living is inherently antifragile to a certain extent it is living
because it has withstood some unexpectedness, disorder.
Book Summary: Antifragile by Nassim Taleb
https://rkirti.wordpress.com/2016/03/12/book-summary-antifragile-by-nassim-taleb/
Fragility (as a property) is more predictable than risk. Prediction
models that try to estimate risk are stupid (past is not an indicator of
the future) instead try to predict the fragility (or antifragility) of the
system and work on that.
Artisanal careers are good lessons in antifragility when you are a taxi
driver, craftsman, dentist etc, small variations in external conditions
(market situation, population changes, natural disasters) will make you
adapt pretty effectively.
Optionality makes you antifragile the ability to change course lets
you benefit from the positive side of uncertainty, without serious harm
from the negative side.
Option = asymmetry + rationality. It allows for big discoveries, while
restricting oneself to small errors.
Optionality is Promethean (after the Greek fore-thinker character).
Narratives are Epimethean (after-thinking).
History is written by the losers (academicians) while the tinkerers
move on to newer experiments. Academics rationalize after the fact
like putting a bird in a room, showering lectures at it, and assuming
you taught it how to fly! Few academics will admit that we create
theories from practice.
Avoidance of boredom is the only worthy mode of action. Life
otherwise is not worth living.
Never let the other person frame the question. In every question, an
answer is planted. Never respond straight to a question that makes no
sense to you.
Education is an institution that has been growing without external
stressors eventually it will collapse.
Procrustean bed named a Greek inn-keeper who made his guests fit
to his bed by stretching or chopping their limbs. You will encounter
many logical Procrustean beds in life, where the non-linear is simplified
to the linear.
Fragility asymmetry nonlinearity concave curves.
Antifragility asymmetry nonlinearity convex curves.
Book Summary: Antifragile by Nassim Taleb
https://rkirti.wordpress.com/2016/03/12/book-summary-antifragile-by-nassim-taleb/
Financial crisis problems are primarily to do with size with size, comes
fragility.
Figure out if your misforecasts are on balance more harmful than they
are helpful and how accelerating the damage is.
Property of a convex function the function of the average of x is
greater than the average of the function of x. e.g. for y=x^2, average
of the function of a few values is higher than function of the average of
these values.
When you create optionality for yourself (convex curves), you can do
worse than random (be wrong more than 50% of the time) and still
making a killing, since the payoffs from being right are high.
If you have favorable asymmetries or positive convexity, then in the
long run you will do reasonably well outperforming the average in the
presence of uncertainty!
The more powerful a concept the more incomplete is our linguistic
grasp of it. Antifragility is an example.
It is a result of convex curves that we are moving more and more
into Extremistan while the 80:20 rule held earlier, today we see the
99:1 rule in many ways. For instance, 1% controlling more than 99% of
the wealth.
Obvious decisions, which are robust to error, require no more than a
single reason. By invoking more than one reason, you are convincing
yourself to do something so if you find yourself giving more than one
reason for an important decision, look deeper.
The future lies mostly in the past Vibrams shoes of today mimic
barefootedness of the past, tablet computers with touchscreens are
closer to Babylonian tablets. Both of these are new inventions that
resulted after a bunch of unnatural iterations.
Time brings about disorder anything time-tested is worthwhile. If you
pick a school textbook, most likely any concept you pick in there is still
relevant in your life. Meanwhile, papers from a conference of 5 years
ago may have been obsoleted.
Book Summary: Antifragile by Nassim Taleb
https://rkirti.wordpress.com/2016/03/12/book-summary-antifragile-by-nassim-taleb/
Fragility in the medical field interventionism by doctors and over-
medication leads to harm that is not visible (takes 3/4th of a
generation to show up). Humans assume no evidence of harm to be
evidence of no harm, which is dangerous. For instance, synthetic fats
like margarine were considered to be a great invention until the heart
effects showed up.
Interventions almost always have negative convexity effects (mild
known benefits, high unknown losses).
Antifragility of a system comes from the mortality of its components.
Antifragility at the expense of others fragility: People can hide
risks and hurt others pretty easily without the law ever catching them.
2008 crisis is an example.
Basic rules to follow
Dont get on a plane without a pilot. For any venture, the person
advocating it or influencing you must have skin in the game.
Have a copilot. Have redundancy, remove asymmetries in your
sensitivity to risk (or bias them in your favor).
Burn the boats develop skin in the game.
The more complicated the system, the more prone it is to arbitrage by
insiders.
Look for optionality, and have a non-narrative approach to life.
When faced with a variable x in life, it is much easier to understand
and modify f(x), the impact of it on your, rather than to understand x
itself. Predicting how x will vary is useless. Instead try to apply the
barbell transformation to f(x) so you have more benefits on the
upside and cap the downside.