How do you innovate? First, try to get in trouble. I mean serious, but not terminal, trouble. I hold—it is beyond speculation, rather a conviction—that innovation and sophistication spark from initial...
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...
Harvard is like a Vuitton bag or a Cartier watch. It is a huge drag on the middle-class parents who have been plowing an increased share of their savings into these institutions, transferring their mo...
For the fragile, the cumulative effect of small shocks is smaller than the single effect of an equivalent single large shock.
Evidence shows that we do much less thinking than we believe we do-except, of course, when we think about it.
Don’t tell me what you think, tell me what you have in your portfolio.
Consider a more extreme example than the casino experiment. Assume a collection of people play Russian roulette a single time for a million dollars—this is the central story in Fooled by Randomness. A...
But things are even worse: in real life, every single bit of risk you take adds up to reduce your life expectancy. If you climb mountains and ride a motorcycle and hang around the mob and fly your own...
Bureaucracy is a construction by which a person is conveniently separated from the consequences of his or her actions.
Bob Rubin Trade: payoff in a skewed domain where the benefits are visible (and rewarded with some compensation) and the detriment is rare (and unpunished owing to absence of skin in the game). Can be...
Black Swans and tail events run the socioeconomic world
Beyond our perceptional distortions, there is a problem with logic itself. How can someone have no clue yet be able to hold a set of perfectly sound and coherent viewpoints that match the observations...
Because what matters in life isn’t how frequently one is right about outcomes, but how much one makes when one is right. Being wrong, when it is not costly, doesn’t count—in a way that’s similar to tr...
Aside from the movies, examples of positive-Black Swan businesses are: some segments of publishing, scientific research, and venture capital. In these businesses, you lose small to make big. You have...
Also consider that lobbyists—this annoying race of lobbyists—cannot exist in a municipality or small region.
A system with skin-in-the-game requirements holds together through the notion of a sacrifice in order to protect the collective or entities higher in the hierarchy that are required to survive.
A simple solution, but quite drastic: anyone who goes into public service should not be allowed to subsequently earn more from any commercial activity than the income of the highest paid civil servant...
A mistake is not something to be determined after the fact, but in light of the information available until that point
A man is morally free when … he judges the world, and judges other men, with uncompromising sincerity.
A complex system, contrary to what people believe, does not require complicated systems and regulations and intricate policies. The simpler, the better. Complications lead to multiplicative chains of...