Monthly Archives: October 2013

[5th volume, EPILOGUE OF THE INCERTO As part of letters of advice…

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[5th volume, EPILOGUE OF THE INCERTO As part of letters of advice, the kill-the-hope heuristic]:
Try to kill anything called hope in you. You never want to put yourself in a situation where you wish very badly for something specific to happen to you, an event that would tomorrow suddenly make a big difference for the rest of your life.
–Say, the outcome of a job interview or a lawsuit, a battle, winning the lotto, meeting a significant other, getting a paper accepted, have gold rise, have your employer go public, or other events that can markedly change your life. If one event, a single event makes a difference, and it doesn’t depend on you, then you are megafragile, a prisoner of circumstances.
–This is not to say that no good event can make a difference to you, rather that you do not need to dream about it. For the alternative should be acceptable enough for you. The outcome of the battle is not what matters, but how you fight; for that you do not need to hope and dream like a loser.
–Likewise if you end up losing a lawsuit or something of the sort, show off how honorable you are in handling defeat.
So, simply, get organized in a way to not have to dream tomorrow or the day after. It takes a while, a lot of work, and the certainty that the counterfactual is equally good for you.[Sensitity to counterfactuals]

via 2 [5th volume, EPILOGUE OF THE INCERTO As part of… – Nassim Nicholas Taleb.

I have a question about true vs constructed preferences…

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I have a question about true vs constructed preferences, wondering if some of my personal observations are general. Feel free to share your own.

Places held to be touristically either uninteresting or unattractive (or not particularly special) are associated in my personal memory with a lot better souvenirs than places held to be attractive. These “attractive” places evoke boredom (after the first contact and “wow! how beautiful” the scenery), rich farts, gold-diggers, Saudi “princes” in convertible Italian handmade sports cars, tourists being fleeced by locals, etc. This is easily conceivable based on habituation: inside a café, trapped in conversation, you forget that you are in West Philadelphia. Kahneman had a paper indicating that people who live in California are not really happier than those in the rest of the country, but don’t know it, and live under self-sustained myths. After a brief period, you treadmill to baseline. But as with people who are in California telling themselves that they have to be happier, because that’s the prevalent belief, we end up living in a postcard-like system of constructed preferences.

I agree that being exposed to natural beauty, once in a while, brings some aesthetic contentment, or episodic visits to the country bring some relief. And I accept that it is better to have some fractal dimension (trees, nature) in one’s permanent landscape. But I wonder if, for day-to-day life, one needs much more than ample sunlight and view of trees outside the window: beyond that, no postcard life can be a tradoff for absence of trusted and warm neighbors, plenty of relaxed friends, stimulating conversation, ability to walk places, and a consuming activity.

When I look into my personal raw preferences, I feel I prefer Brooklyn to the South of France, ugly West Philadelphia to the scenic Amherst (Mass), Milan to Florence, and Clerkenwell to Kensington. Question: Do we tend to follow the current culture as punishment?

via I have a question about true vs… – Nassim Nicholas Taleb | Facebook.

It looks like the logical faculties of humans have been dropping in the age of the internet…

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It looks like the logical faculties of humans have been dropping in the age of the internet; mistakes are worse today than they were when I published Fooled by Randomness > 12 years ago.
When I wrote here “Virtue is when the income you wish to show the tax agency equals what you wish to show your neighbor” about 1/2 of people including 1/5 here on this site mistook it for an invitation to pay more taxes instead of showing-off much less with your money.
The error almost always linked to Kahneman’s attribute substitution: always reduce the problem to something easier to communicate, at the expense of transforming the meaning, Procrustean Bed style. “We underestimate randomness” turns into “It’s all random”.Now the 1/5 people on this site making such mistakes… it is painful, but we need them to leave.

via It looks like the logical faculties of… – Nassim Nicholas Taleb | Facebook.

Commonsense ideas behind Taleb’s rhetorical flourishes | FT.com

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At the national level, the system is more fragile. One tall tower is more likely to fall in a storm than a lawn of grass. This leads to Taleb’s contention that US federal debt is the most fragile of all, and should be decentralised, because default is unthinkable. Hence, “I’m kind of happy with what’s happening in the US now. We’d like the government periodically to come back with a plan, just like a corporation that has a debt addiction.”

Implementing this idea in practice without extreme volatility will be hard. But the Taleb arguments remain strong. Fragility, he insists, trumps growth. If a plane has an elevated chance of crashing, even if that chance is very small, we would give that priority over its speed or its price. So, governments should have a risk manager’s mindset, and not try to prod the economy into growing. Without a risk-averse mindset, risks will grow.

Source: FT.com

Part ll

HatTip to Dave Lull