Nassim Taleb Risk Quotes & Sayings

Statin drugs are meant to lower cholesterol in your blood. But there is an asymmetry, and a severe one. One needs to treat fifty high risk persons for five years to avoid a single cardiovascular event. Statins can potentially harm people who are not very sick, for whom the benefits are either minimal or totally nonexistent. — Nassim Nicholas Taleb

Let me simplify my take on intervention. To me it is mostly about having a systematic protocol to determine when to intervene and when to leave systems alone. And we may need to intervene to control the iatrogenics of modernity - particularly the large-scale harm to the environment and the concentration of potential (though not yet manifested) damage, the kind of thing we only notice when it is too late. The ideas advanced here are not political, but risk-management based. I do not have a political affiliation or allegiance to a specific party; rather, I am introducing the idea of harm and fragility into the vocabulary so we can formulate appropriate policies to ensure we don't end up blowing up the planet and ourselves. — Nassim Nicholas Taleb

In politics we face the choice between warmongering, nation-state loving, big-business agents on one hand; and risk-blind, top-down, epistemic arrogant big servants of large employers on the other. But we have a choice. — Nassim Nicholas Taleb

If you roll dice, you know that the odds are one in six that the dice will come up on a particular side. So you can calculate the risk. But, in the stock market, such computations are bull - you don't even know how many sides the dice have! — Nassim Nicholas Taleb

The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deemed these events "unlikely." — Nassim Nicholas Taleb

A system, artificially stabilized, and of course you have hidden risks under the surface, and you don't know where the risks are. — Nassim Nicholas Taleb

Since procrastination is a message from our natural willpower via low motivation, the cure is changing the environment, or one's profession, by selecting one in which one does not have to fight one's impulses. Few can grasp the logical consequence that, instead, one should lead a life in which procrastination is good, as a naturalistic-risk-based form of decision making. — Nassim Nicholas Taleb

Many people keep deploring the low level of formal education in the United states (as defined by, say, math grades). Yet these fail to realize that the new comes from here and gets imitated elsewhere. And it is not thanks to universities, which obviously claim a lot more credit than their accomplishments warrant. Like Britain in the Industrial Revolution, America's asset is, simply, risk taking and the use of optionality, this remarkable ability to engage in rational forms fo trial and error, with no comparative shame in failing again, starting again, and repeating failure. — Nassim Nicholas Taleb

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. — Nassim Nicholas Taleb

But I also buy the opposite argument that regulating street signs does not seem to reduce risks; drivers become more placid. Experiments show that alertness is weakened when one relinquishes control to the system (again, lack of overcompensation). Motorists need the stressors and tension coming from the feeling of danger to feed their attention and risk controls, rather than some external regulator - fewer pedestrians die jaywalking than using regulated crossings. — Nassim Nicholas Taleb

While the meetings included traders, that is, people who are judged on their numerical performance, it was mostly a forum for salespeople (people capable of charming customers), and the category of entertainers called Wall Street "economists" or "strategists," who make pronouncements on the fate of the markets, but do not engage in any form of risk taking, thus having their success dependent on rhetoric rather than actually testable facts. — Nassim Nicholas Taleb

Joseph Stiglitz, with two colleagues, the Orszag brothers (Peter and Jonathan), looked at the very same Fannie Mae. They assessed, in a report, that "on the basis of historical experience, the risk to the government from a potential default on GSE debt is effectively zero."* Supposedly, they ran simulations - but didn't see the obvious. They also said that the probability of a default was found to be "so small that it is difficult to detect." It is statements like these and, to me, only statements like these (intellectual hubris and the illusion of understanding of rare events) that caused the buildup of these exposures to rare events in the economy. This is the Black Swan problem that I was fighting. This is Fukushima. — Nassim Nicholas Taleb

Anything that provides you with very, very stable income, very stable conditions, maybe generally stable, that often, it masks real risks, risks of blow-ups. — Nassim Nicholas Taleb

It was obvious that their profits were simply cash borrowed from destiny with some random payback time. — Nassim Nicholas Taleb

from increasing the number of people in the "tails," that small, very small number of risk takers crazy enough to have ideas of their own, those endowed with — Nassim Nicholas Taleb

Muscles without strength, friendship without trust, opinion without risk, change without aesthetics, age without values, food without nourishment, power without fairness, facts without rigor, degrees without erudition, militarism without fortitude, progress without civilization, complication without depth, fluency without content; these are the sins to remember. — Nassim Nicholas Taleb

But fragility and antifragility are part of the current property of an object, a coffee table, a company, an industry, a country, a political system. We can detect fragility, see it, even in many cases measure it, or at least measure comparative fragility with a small error while comparisons of risk have been (so far) unreliable. — Nassim Nicholas Taleb

Now take a look at the cemetery. It is quite difficult to do so because people who fail do not seem to write memoirs, and, if they did, those business publishers I know would not even consider giving them the courtesy of a returned phone call (as to returned e-mail, fuhgedit). Readers would not pay $26.95 for a story of failure, even if you convinced them that it had more useful tricks than a story of success.* The entire notion of biography is grounded in the arbitrary ascription of a causal relation between specified traits and subsequent events. Now consider the cemetery. The graveyard of failed persons will be full of people who shared the following traits: courage, risk taking, optimism, et cetera. Just like the population of millionaires. There may be some differences in skills, but what truly separates the two is for the most part a single factor: luck. Plain luck. — Nassim Nicholas Taleb

Technology is the result of antifragility, exploited by risk-takers in the form of tinkering and trial and error, with nerd-driven design confined to the backstage. — Nassim Nicholas Taleb

The consequences are not trivial: It means that rational thinking has little, very little, to do with risk avoidance. Much of what rational thinking seems to do is rationalize one's actions by fitting some logic to them. — Nassim Nicholas Taleb

At no point in history have so many non-risk-takers, that is, those with no personal exposure, exerted so much control. — Nassim Nicholas Taleb

Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty. — Nassim Nicholas Taleb

Had Prozac been available last century, Baudelaire's "spleen," Edgar Allan Poe's moods, the poetry of Sylvia Plath, the lamentations of so many other poets, everything with a soul would have been silenced*....
If large pharmaceutical companies were able to eliminate the seasons, they would probably do so--for profit, of course.

*This does not mean that Sylvia Plath should not have been medicated at all. The point is that pathologies should be medicated when there is risk of suicide, not mood swings. — Nassim Nicholas Taleb

We see the world as less random than it actually is. — Nassim Taleb

Bullish or bearish are terms used by people who do not engage in practicing uncertainty, like the television commentators, or those who have no experience in handling risk. Alas, investors and businesses are not paid in probabilities; they are paid in dollars. Accordingly, it is not how likely an event is to happen that matters, it is how much is made when it happens that should be the consideration. — Nassim Nicholas Taleb

The process of discovery (or innovation, or technological progress) itself depends on antifragile tinkering, aggressive risk bearing rather than formal education. — Nassim Nicholas Taleb

Reality is far more vicious than Russian roulette. First, it delivers the fatal bullet rather infrequently, like a revolver that would have hundreds, even thousands of chambers instead of six. After a few dozen tries, one forgets about the existence of a bullet, under a numbing false sense of security. Second, 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. One is capable of unwittingly playing Russian roulette - and calling it by some alternative "low risk" game. — Nassim Nicholas Taleb

Philosophers talk about truth and falsehood. People in life talk about payoff, exposure, and consequences (risks and rewards), hence fragility and antifragility. And sometimes philosophers and thinkers and those who study conflate Truth with risks and rewards. — Nassim Nicholas Taleb

A country's assets reside in the tinkerers, the hobbyists, and the risk-takers. — Nassim Nicholas Taleb

We should ban banks from risk-taking because society is going to pay the price. — Nassim Nicholas Taleb