Who knew that they like to drink from the fire hose? This surreal scene seems to embody the future.
Having avoiding the news and all TV for over 20 years so far, I was struck by Taleb’s wisdom: “Reading the newspaper actually decreases your knowledge of the world. We tend to learn the precise, not the general. 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.”
At aeroculus & evermore’s recommendations, I have been enjoying The Black Swan. You see them everywhere once you start to look…
Nassim Taleb defines a Black Swan as a rare event with extreme impact that affords retrospective predictability. (9/11, Google, etc.)
And then I read the current The Economist (8/18/07) on the plane home:
“Goldman Sachs said that its funds had been hit by moves that its models suggested were 25 standard deviations away from normal. In terms of probability, that translates to a likelihood of .0000000…00006, where there are 138 zeros before the six. That is silly.”
Taleb summarizes:
“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 own personal lives.
This extends to all businesses.
The payoff of a human venture is, in general, inversely proportional to what it is expected to be.
Contrary to social-science wisdom, almost no discovery, no technologies of note, came from design and planning—they were just Black Swans.
The reason free markets work is because they allow people to be lucky, thanks to aggressive trail 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.
Our world is dominated by the extreme, the unknown, and the very improbable and all the while we spend our time engaged in small talk, focusing on the known and the repeated.
The future will be increasingly less predictable, while both human nature and social ‘science’ seem to conspire to hide the idea from us.”
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