Nassim Nicholas Taleb
| Nassim Nicholas Taleb | |
|---|---|
 | |
| Umumiy maʼlumotlar | |
| Tavalludi |
1960-yil 12-sentyabr Amioun |
| Qardosh loyihalar | |
Nassim Nicholas Taleb (talaffuzi: Nassim Nikolas Taleb; 1960-yil 12-sentyabrda tugʻilgan) – amerikalik essenavis, statistik, aforist va sobiq treyder.
Iqtiboslar
[tahrirlash]Mening asosiy hobbiyim — oʻziga va bilim sifatiga juda jiddiy qaraydigan va baʼzida: „Bilmayman...“ deyishga jurʼati yetmaydigan odamlarni masxara qilish[1]. | |
My major hobby is teasing people who take themselves and the quality of their knowledge too seriously and those who donʼt have the guts to sometimes say: I donʼt know.... |
Siz dunyoni oʻzgartira olmasangiz ham, insoniyatning epistemik takabburligidan foydalanib, hech boʻlmaganda biroz koʻngilxushlik qilishingiz va tirikchilik qilishingiz mumkin[1]. | |
You may not be able to change the world but can at least get some entertainment and make a living out of the epistemic arrogance of the human race. |
Hozirda ilmiy konsensusga koʻra, bizning xavfdan qochish mexanizmimiz miyamizning kognitiv qismlari orqali emas, balki hissiy qismlari orqali boshqariladi. Bu bizni pleystotsen davrida yashashga moslashtirgani ehtimoli bor. Xavfni baholash tizimimiz yoʻlbarslardan qochishga moʻljallangan; u axborotga toʻla zamonaviy dunyoga moslashmagan. [„Nassim Nikolas Taleb bilan suhbat“ kitobining muqaddimasida keltirilgan, Edge (2004-yil aprel soni)] | |
It is now the scientific consensus that our risk-avoidance mechanism is not mediated by the cognitive modules of our brain, but rather by the emotional ones. This may have made us fit for the Pleistocene era. Our risk machinery is designed to run away from tigers; it is not designed for the information-laden modern world. |
Insonlarning xavfdan qochish mexanizmlari haqidagi koʻplab tadqiqotlar shuni koʻrsatadiki, bu mexanizmlar eskirgan va zamonaviy dunyoga mos kelmaydi. Ular asosan takrorlanuvchi tahdidlarga qarshi kurashish va aniq holatlardan saboq olishga moʻljallangan. Masalan, agar kimdir maʼlum bir gʻorda yoʻlbars tomonidan yeyilishdan arang qutulsa, u keyinchalik oʻsha gʻordan uzoq yurishni oʻrganadi. [„Learning to Expect the Unexpected“, The New York Times (2004-04-08)] | |
Much of the research into humans' risk-avoidance machinery shows that it is antiquated and unfit for the modern world; it is made to counter repeatable attacks and learn from specifics. If someone narrowly escapes being eaten by a tiger in a certain cave, then he learns to avoid that cave. |
Biz odamlarni imkonsiz narsalarni oʻylaganlari uchun masxara qilmasdan, aksincha ragʻbatlantirshimiz kerak. [„Learning to Expect the Unexpected“, The New York Times (2004-04-08)] | |
We should reward people, not ridicule them, for thinking the impossible. |
Fooled by Randomness (2001)
[tahrirlash]Maslahat berishning o‘zi bizning hissiy mexanizmimiz emas, balki aqliy tizimimiz harakatlarimiz ustidan ma’lum darajada nazorat o‘rnatishini nazarda tutadi. | |
Delivering advice assumes that our cognitive apparatus rather than our emotional machinery exerts some meaningful control over our actions. |
Muvaffaqiyatsizlik juda og‘ir oqibatlarga olib kelsa, biror narsaning qanchalik tez-tez muvaffaqiyatli bo‘lishi ahamiyatsiz. | |
It does not matter how frequently something succeeds if failure is too costly to bear. |
Savdo-sotiq insonni chuqur fikrlashga undaydi; shunchaki qattiq mehnat qiladiganlar esa ko‘pincha diqqatini va aqliy quvvatini yo‘qotadi. Buning ustiga, ular tasodifiylikka botib ketishadi; mehnat axloqi odamlarni asosiy ma’lumotga emas, balki keraksiz shovqinga e’tibor qaratishga majbur qiladi. | |
Trading forces someone to think hard; those who merely work hard generally lose their focus and intellectual energy. In addition, they end up drowning in randomness; work ethics draw people to focus on noise rather than the signal. |
O‘rtacha muvaffaqiyatni mahorat va mehnat orqali tushuntirish mumkin. Keskin muvaffaqiyat esa tasodifiy omillarga bog‘liq. | |
Mild success can be explainable by skills and labor. Wild success is attributable to variance. |
Omadli ahmoqlar o‘zlarining omadli ahmoq ekanliklaridan zarracha shubhalanmaydilar - ta’rifga ko‘ra, ular shunday toifaga mansubligini anglamaydilar. | |
Lucky fools do not bear the slightest suspicion that they may be lucky fools - by definition, they do not know that they belong to such a category. |
Rus ruletkasi singari aniq belgilangan, xavf-xatari oltiga ko‘paytirish va bo‘lish orqali hisoblash mumkin bo‘lgan o‘yindan farqli o‘laroq, haqiqatning "to‘pponcha og‘zi"ni kuzatib bo‘lmaydi. | |
Unlike a well-defined, precise game like Russian roulette, where the risks are visible to anyone capable of multiplying and dividing by six, one does not observe the barrel of reality. |
Epik shoir qahramonlarni natijasiga qarab baholamasdi... Ularning taqdiri butunlay tashqi kuchlarga bog‘liq edi... Qahramonlar g‘alaba qozongani yoki mag‘lubiyatga uchragani uchun emas, balki xatti-harakatlari qahramonona bo‘lgani uchun qahramondirlar. [Two: A Bizarre Accounting Method | George Will is No Solon: On Counterintuitive Truths] | |
[T]he epic poet did not judge heroes by the result... their fate depended on totally external forces... Heroes are heroes because they are heroic in behavior, not because they won or lost. |
Bashorat va karomat qilishni aralashtirib yuborish tasodifiylik va nodonlikka xos belgidir... [Two: A Bizarre Accounting Method | George Will is No Solon: On Counterintuitive Truths] | |
Mixing forecast and prophecy is symptomatic of randomness-foolishness... |
Men dalillarni imkon qadar soddalashtirish kerakligiga qarshi emasman... ammo odamlar ko‘pincha ommaviy axborot vositalariga mos tushuntirib bo‘lmaydigan murakkab g‘oyalarni chalkash fikrning belgisi deb noto‘g‘ri tushunishadi. MBA darajasiga ega bo‘lganlar moliyaviy bozorlarda tez-tez inqirozga uchrashadi, chunki ular keragidan ortiq soddalashtirish uchun tayyorlanadi. (Men o‘zim ham afsuski shu darajaga egaman.) [Two: A Bizarre Accounting Method | George Will is No Solon: On Counterintuitive Truths | Humiliated in Debates] | |
I do not dispute that arguments should be simplified to their maximum... but people often confuse complex ideas that cannot be simplified into a media-friendly statement as symptomatic of a confused mind. ...MBAs tend to blow up in financial markets, as they are trained to simplify... beyond... requirement. (...I am myself the unhappy holder of the degree.) |
Kishining ongidagi ehtimollik xaritasi shunchalik shov-shuvga yo‘naltirilganki, u yangiliklardan voz kechish orqali axborot yutuqlarini anglab yetadi. [Two: A Bizarre Accounting Method | George Will is No Solon: On Counterintuitive Truths | A Different Kind of News] | |
[T]he mental probabilistic map in one's mind is so geared toward the sensational that one would realize informational gains by dispensing with the news. |
Muassasa nuqtai nazaridan, risk menejerining mavjudligi haqiqiy riskni kamaytirish bilan kamroq bog‘liq, chunki u riskni kamaytirish taassuroti bilan bog‘liq. [Two: A Bizarre Accounting Method | George Will is No Solon: On Counterintuitive Truths | Epiphenomena] | |
From the standpoint of an institution, the existence of a risk manager has less to do with actual risk reduction than it has to do with the impression of risk reduction. |
1990-yillarning boshida... men o‘zim qurishni o‘rganib olgan turli xil Monte-Karlo dasturlariga mukkasidan ketdim... Kompyuter inqilobining asosiy natijasi... elektron pochta xabarlari va... suhbat xonalarida emas, balki bir daqiqada millionlab namuna yo‘llarini yaratishga qodir bo‘lgan tezkor protsessorlarning to‘satdan paydo bo‘lishida edi. [Three: A Mathematical Meditation on History | Fun in My Attic | Making History] | |
In the early 1990s... I became addicted to the various Monte Carlo engines, which I taught myself to build... The dividend of the computer revolution... did not come in... e-mail messages and... chat rooms; it was in the sudden availability of fast processors capable of generating a million sample paths per minute. |
Mening modellarim ko‘rsatishicha, oxir-oqibat deyarli hech kim omon qolmadi; ayiqlar bozordagi pasayishda pashshadek qirilib ketdi, buqalar esa so‘yib tashlandi... Biroq, bitta istisno bor edi... opsion xaridorlari... ular inqirozga qarshi sug‘urta sotib olishlari mumkin edi... [Three: A Mathematical Meditation on History | Fun in My Attic | Zorglubs Crowding the Attic] | |
My models showed that ultimately almost nobody really survived; bears dropped like flies in the rally and bulls ended up being slaughtered... But there was one exception... option buyers... could buy the insurance against blowup... |
Tarixdan saboq olishning ikki usuli bor: o‘tmishni o‘rganish uchun keksalarning yozganlarini o‘qiyman; kelajakni bashorat qilish uchun esa Monte-Karlo modellashtirish usulidan foydalanaman. | |
I have two ways of learning from history: from the past, by reading the elders; and from the future, thanks to my Monte Carlo toy. | |
| — Three: A Mathematical Meditation on History | Fun in My Attic | Denigration of History |
Orqaga nazar tashlashning zararli ta’sirlaridan biri shuki, o‘tmishni bashorat qilishda yaxshi bo‘lganlar o‘zlarini kelajakni ham bashorat qilishda mohir deb hisoblaydilar. Aslida, biz muhim voqealarni oldindan aytib bo‘lmaydigan dunyoda yashayapmiz. [Three: A Mathematical Meditation on History | Fun in My Attic | Skills in Predicting Past History] | |
A... vicious effect of... hindsight bias is that those that are good at predicting the past... think of themselves as good at predicting the future... [W]e live in a world where important events are not predictable... |
Tarix tajribaga yo‘l qo‘ymaydi. Biroq... u yovuz insonni oxir-oqibat yo‘q qilish uchun yetarli kuchga ega. Noto‘g‘ri qarorlar oqibati senga yetib keladi... Ehtimollik nazariyasi mutaxassislari buni ergodiklik deb atashadi. Taxminan aytganda... juda uzoq vaqt davomidagi jarayonning xususiyatlari qisqaroq jarayonlar o‘rtachasining Monte-Karlo xususiyatlariga o‘xshash bo‘ladi. Qobiliyatli bo‘lishiga qaramay omadsiz bo‘lganlar vaqt o‘tishi bilan ko‘tariladi. Omadli ahmoq asta-sekin kamroq omadli nodonning holatiga yaqinlashadi. Har bir kishi o‘zining uzoq muddatli xususiyatlariga qaytadi. [Three: A Mathematical Meditation on History | Fun in My Attic | My Salon] | |
[H]istory cannot lend itself to experimentation. But... is potent enough... to eventually bury the bad guy. Bad trades catch up with you... Mathematicians of probability give that a... name: ergodicity. [R]oughly... properties of a very... long sample path would be similar to the Monte Carlo properties of an average of shorter ones. ...Those unlucky... in spite of their skills would eventually rise. The lucky fool... would slowly converge to the state of a less-lucky idiot. Each ...would revert to his long-term properties. |
Yosh - bu go‘zallik. Mening tuyg‘um yangi fikrlardan ko‘ra, ularning ko‘rinishidan qat’i nazar, uzoq vaqt davomida shakllangan fikrlarni qadrroq bilishdir. Bu esa to‘shagim yonida to‘plangan qadimiy kitoblarni yig‘ishimning yana bir sababi. G‘oyaning ko‘plab davrlardan omon qolishi uning nisbiy moslanishini ko‘rsatadi. Shovqin, hech bo‘lmaganda uning bir qismi, filtrlanib ketdi. Taraqqiyot shuni anglatadiki, ba’zi yangi ma’lumotlar eski ma’lumotlardan yaxshiroq, ammo bu yangi ma’lumotlarning o‘rtachasi eski ma’lumotlarni butunlay siqib chiqaradi degani emas. [Three: A Mathematical Meditation on History | Distilled Thinking On Your Palm Pilot | Breaking News] | |
[A]ge is beauty. ...[M]y instinct is to value distilled thought over newer thinking, regardless of its apparent sophistication—another reason to accumulate the hoary volumes by my bedside... For an idea to have survived so many cycles is indicative of its relative fitness. Noise, at least some noise, was filtered out. ...[P]rogress means that some new information is better than past information, not that the average of new information will supplant past information... |
O‘ychan jurnalistlar ko‘plab... Shunchaki, taniqli ommaviy axborot vositalari jurnalistikasi odamlarning e’tiborini tortadigan shovqinni yetkazishning o‘ylanmagan jarayonidir va bu ikki toifani bir-biridan ajratish uchun hech qanday mexanizm mavjud emas. [Three: A Mathematical Meditation on History | Distilled Thinking On Your Palm Pilot | Shiller Redux] | |
There are hordes of thoughtful journalists... [I]t is just that prominent media journalism is a thoughtless process of providing the noise that captures people's attention and there exists no mechanism for separating the two. |
Men... yoshi katta treyderlarni tanlashda ularning mutlaq muvaffaqiyatidan ko‘ra ko‘proq yillik tajribasini mezon sifatida ishlatishda sezilarli ustunlik topdim... Keksa odamlar kamdan-kam uchraydigan hodisalarga uzoqroq vaqt davomida duch kelganlari sababli, ishonchli tarzda, ularga nisbatan barqarorroq bo‘lishlari mumkin. [Three: A Mathematical Meditation on History | Distilled Thinking On Your Palm Pilot | Gerontocracy] | |
I... found a significant advantage in selecting aged traders, using as a selection criterion their cumulative years of experience rather than their absolute success... [O]lder people have been exposed longer to the rare event and can be, convincingly, more resistant to it. |
Qisqa vaqt oralig‘ida portfelning daromadini emas, balki uning o‘zgaruvchanligini kuzatamiz. Faqat tebranishni ko‘ramiz, boshqa hech narsani emas. His-tuyg‘ularimiz buni anglashga moslashmagan. Men bu bilan shug‘ullanish uchun ma’lumotlarga umuman murojaat qilmayman. Buning o‘rniga she’riyat o‘qishni afzal ko‘raman. [Three: A Mathematical Meditation on History | Philostratus in Monte Carlo: On the Difference Between Noise and Information] | |
Over a short time increment, one observes the variability of the portfolio, not the returns. ...[O]ne sees the variance, little else. ...Our emotions are not designed to understand the point. ...I deal with it by having no access to information. ...I prefer to read poetry. |
Yangiliklar... shovqin-suronga to‘la, tarix esa bundan deyarli xoli. [Three: A Mathematical Meditation on History | Philostratus in Monte Carlo: On the Difference Between Noise and Information] | |
[N]ews... is full of noise and... history is largely stripped of it. |
Savdogarning aqliy qurulmasi uni aynan boshqalar qilmaydigan ishni bajarishga yo‘naltirishi lozim. [Five: Survival of the Least Fit—Can Evolution be Fooled by Randomness | Carlos the Emerging-Markets Wizard | Lines in the Sand] | |
A trader's mental construction should direct him to do precisely what other people do not do. |
Tajribali savdogar Marti O‘Konnell buni "yong‘in depo effekti" deb ataydi. O‘t o‘chiruvchilar bir-biri bilan uzoq vaqt suhbatlashganda, tashqi va xolis kuzatuvchi kulgili deb hisoblaydigan ko‘p narsalar bo‘yicha kelishib olishadi. [Five: Survival of the Least Fit—Can Evolution be Fooled by Randomness | Carlos the Emerging-Markets Wizard | Lines in the Sand] | |
Veteran trader Marty O'Connell calls this the firehouse effect. ...[F]iremen ...who talk to each other for too long come to agree on many things that an outside, impartial observer would find ludicrous... |
Har qanday vaqtda eng boy savdogarlar ko‘pincha eng yomon savdogarlar bo‘ladi. Men buni kesishma muammo deb atardim: ma’lum bir vaqtda... eng muvaffaqiyatli savdogarlar, ehtimol, so‘nggi davrga eng mos keladiganlaridir. [Five: Survival of the Least Fit—Can Evolution be Fooled by Randomness | Carlos the Emerging-Markets Wizard | Lines in the Sand] | |
[A]t any point in time, the richest traders are often the worst traders. This I will call the cross-sectional problem: At a given time... the most successful traders are likely to be those fit for the latest cycle. |
Ular "o‘tkir muvaffaqiyatli tasodifiylik ahmog‘i"ning xususiyatlariga ega bo‘lib, bundan tashqari, eng tartibsiz muhitlarda faoliyat yuritadilar. Ularning rahbarlari va ish beruvchilari ham xuddi shu xususiyatni o‘zlarida mujassam etgan. Ular ham bozordan butunlay chetda qolib ketishgan. [Five: Survival of the Least Fit—Can Evolution be Fooled by Randomness | John the High Yield Trader | The Traits They Shared] | |
[T]hey share the traits of the acute successful randomness fool who, in addition, operates in the most random of environments. ...[T]heir bosses and employers shared the same trait. They, too, are permanently out of the market. |
- There is a saying that bad traders divorce their spouse sooner than abandon their positions. Loyalty to ideas is not a good thing for traders, scientists - or anyone.
- Five: Survival of the Least Fit—Can Evolution be Fool by Randomness | A Review of Market Fools of Randomness Constants | The Traits They Shared
- Just as an animal could have survived because its sample path was lucky... free of the evolutionary rare event, the "best" operators in a given business can... One vicious attribute is that the longer these... can go without encountering the rare event, the more vulnerable they will be to it. ...[S]hould one extend time to infinity, then by ergodicity, that event will happen with certainty—the species will be wiped out! For evolution means fitness to... only one time series, not the average of all possible environments.
- Five: Survival of the Least Fit—Can Evolution be Fool by Randomness | A Review of Market Fools of Randomness Constants | Can Evolution be Fooled by Randomness?
- Why do [people] confuse probability and expectation, that is, probability [vs.] probability times payoff? Mainly because much... schooling comes from examples in symmetric environments... the... bell curve... is entirely symmetric.
- Six: Skewness and Symmetry | The Median is Not the Message
- I have organized my career and business in such a way as to... benefit... I am profiting from the rare event, with asymmetric bets.
- Six: Skewness and Symmetry | Bull and Bear Zoology | Rare Events
- In most disciplines... asymmetry does not matter. ...People in most fields ...do not have problems eliminating extreme values from their sample, when the difference in payoff between different outcomes is not significant ...A professor ...removes the ...outliers, and takes the average of the remaining ones, without ...being ...unsound. A casual weather forecaster does the same ...So people in finance borrow the technique and ignore infrequent events, not knowing that the effect ...can bankrupt a company.
- Six: Skewness and Symmetry | Bull and Bear Zoology | Symmetry and Science
- Many scientists... are... subject to such foolishness... One flagrant example is... global warming... These scientists initially ignored the fact that these [high temperature] spikes, although rare, had the effect of adding disproportionately to the cumulative melting of the ice caps. ...[A]n event, although rare, that brings large consequences cannot be ignored.
- Six: Skewness and Symmetry | Bull and Bear Zoology | Symmetry and Science
- Sometimes market data becomes a simple trap; it shows you the opposite of its nature... [e.g.,] Currencies that exhibit the largest historical stability... are the most prone to crashes.
- Six: Skewness and Symmetry | Almost Everyone is Above Average
- I reject a sole time series of the past as an indication of future performance; I need a lot more than data.
- Six: Skewness and Symmetry | Almost Everyone is Above Average
- [W]e read too much into shallow recent history... but not from history in general [which] teaches us that things that never happened before do happen. ...outside of the narrowly defined time series; the broader the look, the better the lesson.
- Six: Skewness and Symmetry | Almost Everyone is Above Average
- [T]here is a category of traders who have inverse rare events, for whom volatility is often the bearer of good news. Those traders lose money frequently, but in small amounts, and make money rarely, but in large amounts. ...crisis hunters. I am happy to be one of them.
- Six: Skewness and Symmetry | The Rare-Event Fallacy | The Mother of All Deceptions
- Statistics... is all based on... the steady augmentation of the confidence level... [F]or an n times increase in sample size, we increase our knowledge by the square root on n. ...Where statistics ...fails us, is when we have distributions that are not symmetric... If there is a very small probability of finding a red ball in an urn dominated by black ones, then our knowledge about the absence of red balls will increase [even more] slowly. ...On the other hand, our knowledge of the presence of red balls will dramatically improve once one of them is found. This asymmetry in knowledge... is the central philosophical problem for... David Hume and Karl Popper.
- Six: Skewness and Symmetry | The Rare-Event Fallacy | Why Don't Statisticians Detect Rare Events?
- David Hume posed the issue in the following way (as rephrased in the black swan problem by... John Stuart Mill) No amount of observations of white swans can allow the inference that all swans are white, but the observation of a single black swan is sufficient to refute that conclusion.
- Seven: The Problem of Induction | From Bacon to Hume | Cygnus Atratus
- Science had shifted, thanks to Bacon, into an emphasis on empirical observation. The problem is that, without a proper method, empirical observations can lead you astray. Hume came to... stress the need for some rigor in the gathering and interpretation of knowledge... epistemology... Hume is the first modern epistemologist... he was an obsessive skeptic and never believed... that a link between two items could be established as being causal.
- Seven: The Problem of Induction | From Bacon to Hume | Cygnus Atratus
- Maximizing the probability of winning does not lead to maximizing the expectation from the game when one's strategy may include skewness, i.e., a small chance of a large loss and a large chance of a small win. If you engaged in a Russian Roulette-type strategy... you are likely to show up as the winner in almost all samples—except in the year when you are dead.
- Seven: The Problem of Induction | From Bacon to Hume | Neiderhoffer
- [W]e like to emit logical and rational ideas but we do not enjoy this execution.
- Seven: The Problem of Induction | Sir Karl's Promoting Agent | Nobody is Perfect
- What is easier to remember, a collection of facts glued together, or a story, something that offers a series of logical links? Causality is easier to commit to memory. ...What is induction exactly? ...It is very handy, as the general takes much less room in onel's memory than a collection of particulars. The effect of such compression is the reduction in the degree of detected randomness.
- Seven: The Problem of Induction | Sir Karl's Promoting Agent | Induction and Memory
- I will use statistics and inductive methods to make aggressive bets, but I will not use them to manage my risks and exposure. ...[A]ll the surviving traders I know seem to have done the same. ...[T]hey make sure the cost of being wrong is limited ...they know ...which events would prove their conjecture wrong and allow for it ...They would then terminate their trade. This is called a stop loss ...I find it rarely practiced.
- Seven: The Problem of Induction | Sir Karl's Promoting Agent | Pascal's Wager
- A mistake is not something to be determined after the fact, but in the light of the information until that point.
- I always remind myself that what one observes is at best a combination of variance and returns, not just returns.
- I try to make money infrequently, as infrequently as possible simply because I believe that rare events are not fairly valued, and that the rarer the event, the more undervalued it will be in price.
- The major problem with inference... is that those whose profession it is to derive conclusions from data often fall into the trap faster and more confidently... The more data we have, the more likely we are to drown in it. For common wisdom... is to base... decision making on the following principle: It is very unlikely for someone to perform... well in a consistent fashion without doing something right. ...[I]f someone performed better... in the past then there is a great[er] chance of performing better than the crowd in the future... But... [a] small knowledge of probability can lead to worse results than no knowledge at all.
- Part II Monkeys on Typewriters | Survivorship and Other Biases
- [B]ecoming more rational, or not feeling the emotions of social slights, is not part of the human race... not with our current biology. There is no solace to be found from reasoning...
- Eight: Too Many Millionaires | How to Stop the Sting of Failure | You're a Failure
- Optimism, it is said, is predictive of success. ...It can also be predictive of failure. Optimistic people... take more risks as they are overconfident of the about the odds; those who win show up among the rich and famous, others fail and disappear from the analysis.
- Eight: Too Many Millionaires | A Guru's Opinion
- Let us use 10,000 fictional investment managers... [O]nce a manager has a single bad year, he is thrown out of the sample. ...[T]oss a coin; heads and the manager will make $10,000 over the year, tails and he will lose $10,000. ...We have, in a fair game, 313 managers who made money five years in a row. ...[I]f we throw one of these ...into the real world we would get ...comments on his remarkable style, his incisive mind... His biographer will dwell on ...a great mind in the making. ...[S]hould he stop performing (...his odds ...have stayed at 50%) they would start ...finding fault with his dissipated lifestyle. They will find something he stopped doing, and attribute his failure... The truth ...he simply ran out of luck.
- Nine: It is Easier to Buy and Sell than to Fry an Egg | Fooled by the Numbers | Placebo Investors
- The information that a person derived some profit in the past... by itself, is neither meaningful nor relevant. We need to know the size of the population from which he came. If the initial population is 10,000 managers, I would ignore the results.
- Nine: It is Easier to Buy and Sell than to Fry an Egg | Fooled by the Numbers | Ergodicity
- Professor Karl Pearson... devised the first test of nonrandomness... He examined millions of runs of what was called a Monte Carlo (the old name for a roulette wheel)... He discovered... the runs were not purely random. ...Philosophers of statistics call this the reference case problem to explain that there is no true attainable randomness in practice, only in theory.
- Nine: It is Easier to Buy and Sell than to Fry an Egg | Comparative Luck | Professor Pearson Goes to Monte Carlo (Literally): Randomness does not Look Random!
- Even the fathers of statistical science forgot that a random series is bound to exhibit some pattern... Pearson was among the first scholars interested in creating artificial random number generators, tables one could use as inputs for... simulations (precursors of our Monte Carlo simulator). ...[T]hey did not want these tables to exhibit... regularity. Yet real randomness does not look random! ...A single random run is bound to exhibit some pattern ...
- Nine: It is Easier to Buy and Sell than to Fry an Egg | Comparative Luck | Professor Pearson Goes to Monte Carlo (Literally): Randomness does not Look Random!
- At no point during his ordeal did Nero think of himself as 72% alive and 28% dead.
- Probability is not about the odds, but about the belief in the existence of an alternative outcome, cause, or motive.
- We favor the visible, the embedded, the personal, the narrated, and the tangible; we scorn the abstract.
- Wittgenstein's ruler: "Unless you have confidence in the ruler's reliability, if you use a ruler to measure a table you may also be using the table to measure the ruler." (page 224)
- [E]conomists are evaluated on how intelligent they sound, not on a scientific measure of their knowledge of reality. (page 85)
- [E]conomics is a narrative discipline, and explanations are easy to fit retrospectively. (page 257)
- [In] economics... you can disguise charlatanism under the weight of equations and nobody can catch you since there is no such thing as a controlled experiment. Now the spirit of such methods, called scientism by its detractors, continued into the discipline of finance as a few technicians thought their mathematical knowledge could lead them to understand markets. The practice of financial engineering came along with massive doses of pseudoscience. (page 115)