Thinking, Fast and Slow (Daniel Kahneman, 2011)

(418 pages)

Had heard a lot about this book but didn't check it out until PJr loan of his copy.

Starts with useful discussion of "System 1" and "System 2".

System 1 - efficiency! Once it finds a cause, it likes to rely on it.  Operating continuously, establishing what's normal, alert to threats. Evolution.

Taleb's "The Black Swan" has similarities - efficiency. Useful if not essential for day to day, but prone to error.  Narrative fallacy - we love stories. 

System 2 - the "stop and think" element, though lazy; likes to rely on S1; interaction between S1 and S2 can be hard to sort out despite many clear cases.

Plenty of other good ideas, too many for me to keep track of. 

Base rates - keep in mind as a control on both systems.

Regression effects - complex.

WYSIATI - an easy mistake, I try to get better at trying to think about what is not visible or evident in a given situation.

He cites a definition of intuition that is interesting - essentially it's a cue that retrieves something from memory - persons with vast relevant experience will have more items stored in memory that can be retrieved with the proper cue - we call it intuition but it's really memory.  Makes sense.

But emphasizes trusting rules/algorithms and not intuition/hunches.  Hmm.

The "hot hand" fallacy in sports. I still don't buy it, which probably proves one of his points.

The discussion about the difference between lived experience and remembered experience is interesting, illuminating, not solvable but useful:

"Odd as it may seem, I am my remembering self, and the experiencing self, who does my living, is like a stranger to me." (p 390)

That quote seemed absolutely Proustian.

Extensive reliance on experiments and studies.  Sufficiently robust?  Replicable? Me doubtful but not smart enough to draw a conclusion.  

The book is highly useful no matter.

The Bed of Procrustes - Philosophical and Practical Aphorisms (Nassim Nicholas Taleb, 2016)

(156 pages)

The content is well-described by the title.

Third book of the five-book Incerto.

Many of the little sayings are valuable; they also tend to repeat or encapsulate the text from the first two books (probably the next two as well, I will be reading those in the not-too-distant future).

While reading, I was thinking that aphorisms overlap with poetry - dense, thus harder to read, thus better consumed in smaller doses.  Taleb himself mentions this comparison in what he called the "Postface" at the end of the book. 

The Black Swan - The Impact of the Highly Improbable (Nassim Nicholas Taleb, 2007, 2010)

This builds upon "Fooled by Randomness" - some of the concepts reappear but in greater depth, and a lot new.

We evolved in East Africa (presumably) to handle a much simpler world - fewer sources of Black Swans - e.g. a new enemy, a new dangerous animal, a difficult weather change.  In that world one can make quick inferences and generally be largely correct.  Now there are many more sources and many take much longer to play out.

Similar - we automatically seek a cause for occurrences - helpful and efficient but significant risk of being misleading.  Initially valuable for efficiency in a simpler environment.

Similar - categorizing and classifying - much happens unconsciously, it seems.  Misleads all too often.

Similar - we love narratives and explanations - takes much more effort to store long strings of random information.  Our brains unconsciously summarize, theorize, simplify - evolved way of gaining efficiency - again, probably worked well in the long stage of evolution, involves more hazards now  

Positive and tiring effort is required to avoid these wired-in impulses. We can't consistently do so.  Keep reminding oneself.

Not being conscious that there are huge swaths of information outside of what we are aware of. However comprehensive we consider our knowledge to be on any given subject - it's pathetically incomplete.  Need to create the habit of keeping this in mind, would help drive humility as to what we do and can know.

We can often know with confidence that propositions are untrue.  We can seldom if ever know with confidence that propositions are true.  Remember this.

Difficulty or impossibility of identifying causation when looking backward. He mentions the popular business books and states in a better way the problem that caused me to stop reading them - a survivor company looking back in hindsight - even if not perniciously, it's made up.

Looking forward also difficult or impossible - forecaster track records are awful.  It's OK if one is aware of this! 

Futurist writers with the same problem - great at authoritatively telling why things happened a certain way in the past, present/future not so much - I wrote this in 2007 as losing interest in such writers.

He loves Montaigne. (Also here.)

Hayek.  Bottoms-up knowledge.

Off topic in a way, but Taleb adopted an unusual exercise and diet approach - aping primitive man, thinking so many years of evolution in that state suggested modern approaches aren't optimal.  I won't copy this.

It's a little frustrating to hear such a good explanation about limits of knowledge (and limits of knowing), but with little in the way of recommendations about what to do about this.  As well-received as the book was, apparently I'm not the only reader that felt this way.  This edition includes an ~80 page additional chapter through which Taleb took on this complaint . . . though in the end I didn't pick up much in the way of specific action items.  

The value is improving one's ability to keep an open mind, and one's overall approach to recognizing problems and humbly approaching the best response path while recognizing the limits of knowing and remaining flexible as new information filters in.

That's a lot of value.

[Writing about 1987 crash - no internet, we checked market status via phone in those days; not clear what happened or why recovery was so quick.  Later mentions LTCM collapse - Black-Scholes - client companies used their modeling to value stock options.  Big episodes for folks my age.]

Fooled by Randomness - The Hidden Role of Chance in Life and in the Markets Nassim Nicholas Taleb, 2004)

 Author is a good Twitter follow, in part because I sometimes if not often disagree with him or dislike his tone.

And I enjoyed the book a lot, in part because I agree with much of it and have absorbed some of the ideas over the years.  There are elements of math, probability, and the like that I don't understand.

The "fooled by randomness" concept is crucial - he discusses why it's so difficult for humans to refrain from inferring causation from linked events - partly because we're wired for efficiency/shortcuts and often the inference is fine or at least not materially detrimental. I've had this concept repeated to me often enough that I think, or at least hope, that I'm applying it every now and again.

Another basic - evaluate decisions solely on information available at the time of the decision. Difficult not to use a hindsight lens (which has value in some other ways).

Respect how little we can really know - it's fine. Be wary of those who claim to know. Richard Feynman continually articulated this very well.

Black swan concept as an example of this.  Seeing only white swans doesn't disprove the existence of the black swan. This seems to be a common error.

Karl Popper's idea.

This ties to what is finally coming to the fore in academia - mountains of studies, research, papers that are useless - impossible to take into account all the variables, let alone that we can't even identify all of the variables. Tease out thought patterns, but mostly:  be humble.

Interpreting statistics can be tricky. I'm not good at the math but at least try to determine the goals of the presenter of the statistics, what might be cherry-picked, etc. Taleb is good on this topic.

Survivorship bias. Hard to overcome.

If Taleb watches TV, he has it on mute! (One of my favorite life rules.) Sounds like he reads a ton and ignores media and much screen-entertainment . . . appealing to my idiosyncrasies . . .

Borrowed from Jr., one of a group of five books (Incerto) that I will continue to read over time.