Post: #1

Antifragility.

An interesting concept.

I’m currently reading “Antifragility” by Nassim Nicholas Taleb (who also wrote “The Black Swan”).
He worked 20 years in investment banking and risk management.

In a world too complex for us to understand, with unpredictable risks, we cannot prepare for those risks (Fukushima, financial meltdown, etc.).
The author gives a good example:

A turkey, seemingly living in a secure environment. He gets fed for a thousand days and tells his fellow turkey analysts “with increasing statistical confidence” that butchers are your friends.

All very predictable. Until Thanksgiving comes.

Our task in life is to avoid being a turkey. Or, if possible, to become a reverse turkey. Start by distinguishing true and artificially created stability.

Take, for example, reputation: A corporate manager is fragile regarding his reputation; a scandal might bring him down. Actors, writers, rock stars, on the other hand –are antifragile: they usually profit from a scandal, their sales goes up. A corporate manager might get laid off for reasons completely out of his reach. A taxi driver, however, has a much more robust income, just small fluctuations during the days.

Post: #2

Great book. I'll have a book review of it coming in the future on ROK.

Post: #3

My question is this: if we don't know where the step changes/ tech disruptions / black swans will come from, can we really build anti-fragility into a system?

The taxi driver is certainly more robust to changes in demand for his job than the corporate manager, but he's not robust to a tech disruption like driverless cars. His career is very fragile in response to that event.

Actors might be antifragile regarding their reputation, but is it an antifragile career overall? It could be very fragile in domains that we previously never considered because there wasn't much variation in those domains... until the black swan hits. Maybe virtual reality will quickly take hold and meet all our entertainment needs (ridiculous, but if it did, that means acting was actually a very fragile career, and nobody realised until VR took the world by storm).

That's the whole point of disruptive technology / black swans - they change things in ways nobody could have predicted.

So can you actually build antifragility into a system? Surely it only works when you have some idea of where the volatility will come from. Which by the definition of black swan events, we don't. So is the concept at all useful, or should we just keep designing systems using our best guesses of the disruptions that we can forsee?

Post: #4

Just bought Black swan and Antifragility looking forward to reading them both.

Post: #5

As someone who has read all of Taleb's mainstream books, and a few of the technical publications, I should let forum members know that you probably can skip Fooled By Randomness without missing much.

It's an enjoyable read if you want, but most of the concepts are covered in subsequent books.

Also, "like" his page on FB, he posts lots of great stuff, including sample papers/chapters, and actually regularly responds to comments and engages in discussion with people.

I would also suggest reading Benoit Mandelbrot, who worked with and influenced Taleb.

This is a great read: http://www.amazon.com/Misbehavior-Market...0465043577




Finally, Taleb subscribes to a lot of views in terms of the power of asymmetric outcomes, and it's actually helped my game when thinking about different situations.

You guys may find it helpful too, I touched on those concepts in this data sheet: /thread-26497.html

Post: #6

"Anti-Fragility"

I love that word!

Very powerful concept.

We are taught to be sensitive, we are taught to complain, we are taught to feel sorry for ourselves.

Its all feminist brain washing.

We are men. We should be antifragile.

Post: #7

(08-05-2013 01:48 PM)Chase Wrote:  He worked 20 years in investment banking and risk management.

He was a derivatives trader, not an investment banker.

Post: #8

Great book, but it's real hard to parse out what is Anti-Fragile versus what is Robust.

It makes sense with respect to financial derivatives, but other endeavors?

And I think it reads much better than the Black Swan.

WIA

Post: #9

@WIA

The definition seems clear enough ... it is set out on the first pages of the book. Robust is simply healthy or sturdy; well built. Resilience is the ability to withstand or recover from some stressor.

Taleb's definition of antifragile is specific to things that benefit from the likes of volatility, stessors, shocks and randomness. Something that is antifragile responds to the information it receives from an often hostile environment in order to improve itself ready for future shocks.

To me the antifragility thesis insists on a supple, dynamic approach that can quickly respond to the environment. Of course the future cannot be known, but serious, largely unforeseen events (e.g. volcanoic eruptions) can be better managed by those with an antifragile approach. Conversely, rigid systems can respond poorly to increasingly complex situations as they are brittle. The basics of packet switching and the TCP/IP packet structure are a testament to how perceived inefficiency and other ostensibly negative traits are ultimately far outweighed by reliable, error-checked, ordered delivery of data. These characteristics can be applied to work life and other fields (as Taleb does in the book).

Post: #10

He could have used this term "Complex Adaptive Dynamical Systems" but then it would not be masculine enough. Antifragile sounds like an armour for iron man.

he sounds like he is on stereoids though entertaining. Some quotes:

http://en.wikiquote.org/wiki/Nassim_Nicholas_Taleb
Black Swan:

Quote:You can tell how uninteresting a person is by asking him whom he finds interesting.

Quote:Preoccupation with efficacy is the main obstacle to a poetic, elegant, robust and heroic life.

Quote:They are born, put in a box; they go home to live in a box; they study by ticking boxes; they go to what is called “work” in a box, where they sit in their cubicle box; they drive to the grocery store in a box to buy food in a box; they talk about thinking “outside the box”; and when they die they are put in a box.

Quote:A competitive athlete is painful to look at; trying hard to become an animal rather than a man, he will never be as fast as a cheetah or as strong as an ox.

Quote:Hard science gives sensational results with a horribly boring process; philosophy gives boring results with a sensational process; literature gives sensational results with a sensational process; and economics gives boring results with a boring process.

Quote:For the classics philosophical insight was the product of a life of leisure; for me a life of leisure is the product of philosophical insight.

Quote:Social science means inventing a certain brand of human we can understand.

Quote:People used to wear ordinary clothes weekdays, and formal attire on Sunday. Today it is the exact reverse.

Antifragile:

Quote:Few understand that procrastination is our natural defense, letting things take care of themselves and exercise their antifragility.

Quote:Daily news and sugar confuse our system in the same manner.

Post: #11

(08-05-2013 03:41 PM)RichieP Wrote:  My question is this: if we don't know where the step changes/ tech disruptions / black swans will come from, can we really build anti-fragility into a system?

Taleb answers this question in his book. He suggests living a life of 'barbelling' - always have 2 of everything. Like a barbell which has to have weights on both sides to be useful.
examples:
2 sources of income
2 methods of transport
2 places to invest in
2 very different educational qualifications
etc etc

For example, think of Harrison Ford. He went to Hollywood to get acting jobs but was able to work as a carpenter. He kept at the carpentry until he finally got a positive black swan even in his life - and got the role of Indiana Jones. If he was only an actor, he would have starved; if he was only a carpenter, he would never have become famous. It's because he was able to switch options from one end of the barbell to the other as necessary that he succeeded.

Applying it to large systems:
- Multiple small government entities rather than one giant monolith (eg Switzerland's canton system versus Big Government)
- Multiple currencies as opposed to a single currency
- Multiple and vulnerable banks as opposed to Too-big-to-fail banks
- Many small businesses as opposed to massive corporations

Basically, you can decrease disastrous black swan events by having a backup option. You can also get positive black swan events by keeping a toe in the water. You can never entirely escape black swans, but one can develop a lifestyle/governmental style that has options to look at in the event of a collapse/positive black swan.

Post: #12

Taleb is an Austrian economist who is popularizing their views. Antifragility is based on the Austrian school's concept of "spontaneous order," which is how Austrians understood economies.

Quote:Spontaneous order, also known as "self-organization", is the spontaneous emergence of order out of seeming chaos. It is a process found in physical, biological, and social networks, as well as economics, though the term "self-organization" is more often used for physical and biological processes, while "spontaneous order" is typically used to describe the emergence of various kinds of social orders from a combination of self-interested individuals who are not intentionally trying to create order through planning. The evolution of life on Earth, language, crystal structure, the Internet and a free market economy have all been proposed as examples of systems which evolved through spontaneous order.

Austrian economics is the backbone of Libertarian policies as well. I will be doing as many articles as I can on Austrian economics on RoK in the future.

Post: #13

I'm intrigued. Looks like I've got some reading to do.

Post: #14

I didn't state clearly the problems with the concept.

I get his definition, but with respect to actual things that behave in an anti-fragile manner, outside of financial derivatives - what else is there?

One of his main points in the book is that there aren't any words for things that gain from disorder, from chaos, from breakdown in any language.

There might be a reason for that, there are few instances of it happening.

Most of the book where he rails against X,Y, and Z "solutions", he's not really arguing for anti-fragility. He's pointing out weaknesses in our approaches to problems.

(08-11-2013 08:30 AM)perspective Wrote:  @WIA

The definition seems clear enough ... it is set out on the first pages of the book. Robust is simply healthy or sturdy; well built. Resilience is the ability to withstand or recover from some stressor.

Taleb's definition of antifragile is specific to things that benefit from the likes of volatility, stessors, shocks and randomness. Something that is antifragile responds to the information it receives from an often hostile environment in order to improve itself ready for future shocks.

To me the antifragility thesis insists on a supple, dynamic approach that can quickly respond to the environment. Of course the future cannot be known, but serious, largely unforeseen events (e.g. volcanoic eruptions) can be better managed by those with an antifragile approach. Conversely, rigid systems can respond poorly to increasingly complex situations as they are brittle. The basics of packet switching and the TCP/IP packet structure are a testament to how perceived inefficiency and other ostensibly negative traits are ultimately far outweighed by reliable, error-checked, ordered delivery of data. These characteristics can be applied to work life and other fields (as Taleb does in the book).

Post: #15

Nassim Taleb's rules for a more resilient financial system:

http://globalguerrillas.typepad.com/glob...rules.html

Post: #16

http://www.riosmauricio.com/wp-content/u...ragile.pdf

Post: #17

(10-02-2013 09:32 AM)calihunter Wrote:  http://www.riosmauricio.com/wp-content/u...ragile.pdf

The dude has balls for putting up copyrighted works on his own webpage, where he has his picture and his job description in the 'about' section.

He's got fooled by randomness and black swan as well in his 'library' page. I grabbed the entire trilogy.

Haven't read black swan yet.

Post: #18

(08-12-2013 12:49 PM)WestIndianArchie Wrote:  I didn't state clearly the problems with the concept.

I get his definition, but with respect to actual things that behave in an anti-fragile manner, outside of financial derivatives - what else is there?

One of his main points in the book is that there aren't any words for things that gain from disorder, from chaos, from breakdown in any language.

The health care professions. I'm in one, I can get high paying work if things go great ( upper middle class has disposable income) and when things go sour ( underclass gets some resources allocated to it by middle class to avoid revolution and/or contagious epidemics.)

Look at drug-resistant TB. You think Congress wants that shit spreading around unchecked? No, they fund care for it even though it is the lowest SES people who get it because they don't understand they need to follow drug instructions.

Also, some guilds (unions in the broad sense-- including medical licensing) are to some degree what he calls "anti-fragile". Even in the chaos of a revolution people would rather have a doctor that was licensed before anarchy than some guy who read a book and thinks colloidal silver with cure everything.

Actually, in a real anarchy situation nothing but farming and hunting works, does it? Fragility is relative to the background level of civilization.

Post: #19

(08-12-2013 12:49 PM)WestIndianArchie Wrote:  I didn't state clearly the problems with the concept.

I get his definition, but with respect to actual things that behave in an anti-fragile manner, outside of financial derivatives - what else is there?

One of his main points in the book is that there aren't any words for things that gain from disorder, from chaos, from breakdown in any language.

There might be a reason for that, there are few instances of it happening.

Most of the book where he rails against X,Y, and Z "solutions", he's not really arguing for anti-fragility. He's pointing out weaknesses in our approaches to problems.

Religious groups, cultural movements. Widespread prosecution and assassinations generally strengthen and increase growth. Martin Luther King Jr & the US civil rights movement is a good example.

Anti-fragile means that volatility and disruption produces growth or perhaps in a narrowly defined sense prosperity.

I read part of the book but haven't finished it yet.

Post: #20

In a fragile environment, trial and error is discouraged.

In an anti fragile environment, trial and error is encouraged.

Progress is made with trial and error.

Post: #21

Great book. I was enamoured with the topic when I first knew about it.

Here's a decent article on the subject.

https://medium.com/better-humans/c02337782a89

Post: #22

in my kindle queue for months, can not wait to read it

Post: #23

Anyone here watch NCIS? This reminded me (somehow) of Gibbs' rule #6: Never say you're sorry, it's a sign of weakness."
Honestly a good rule to live by. If you do something bad, actions speak louder than works when it comes to mending it.

E: Downloaded this and The Black Swan, going to start reading them soon.

Post: #24

a summary:

http://newbooksinbrief.com/2012/12/17/26...las-taleb/

Post: #25

(08-05-2013 03:00 PM)Roosh Wrote:  Great book. I'll have a book review of it coming in the future on ROK.

That was a excellent book review Roosh!

http://www.rooshv.com/review-of-antifrag...ssim-taleb