509 of 545 people found the following review helpful
on December 15, 2012
Taleb conveniently quotes one of his friend's summary of this book: "Everything gains or loses from volatility. Fragility is what loses from volatility and uncertainty."
I think the point is better expressed by rephrasing: "Antifragility is what gains from volatility and uncertainty, up to a point. And being antifragile is a good thing."
Well, that's pretty much summarizes this 500-pages-long book. The rest is an accumulation of more or less relevant topics, delivered in Taleb's trademarked seering, holier-than-thou, hero-or-moron style. Why, even in "Dynamic hedging", his first, $100-book on trading exotic options, he was already both immensely entertaining and almost unbearably infuriating.
1.2 A few of the more interesting points:
1.2.1 Every phenomenon in the world belongs to one of the following categories:
Fragile: vulnerable to unforeseen shocks
Robust: indifferent to shocks
Antifragile: thrive on shocks, up to a point.
That's what Taleb calls the Triad.
1.2.2 Most modern structures are inherently fragile
Salaried employment: while it looks safe on the surface (predictable salary every month) it is subject to the catastrophic risk of losing one's job.
Debt-fueled economies: debt has no flexibility, so these economies can't stand even a slowdown without risking implosion (cf current situation)
Modern societies: efficiency demands are pushing the structures to the maximum, so a little sand in the cogs make the whole edifice totter.
Touristification: turning adventures (kids growing up, people visiting foreign countries) from exciting, dangerous activities into bland, Disneyfied and safe ones.
1.2.3 Ways to be antifragile include:
Stressors: it is healthy to be subject to some punctual stresses to awake the organism from complacency (e.g. irregular meal times, violent exercise or ingesting small amounts of poison)
Barbell strategy: put 90% of your eggs into something super-safe and be very risk-seeking with the other 10% (swing for the fences).
Optionality: get into situations where downside is limited but upside is unlimited (non-linearity)
Redundancy: have more than one way to have things done.
Less is more: don't add unnecessary things.
Tinkering: empiricism is better than top-down academic research
Small is beautiful: large organizations are inherently fragile, but small structures are well adapted to be nimble and profit from unexpected opportunities.
1.2.4 For small troubles, better trust nature and do nothing than bring untested methods that can have tragic unforeseen consequence
Beware of neomania: don't embrace novelty for the sake of it
Stick to time-tested methods: what has stood the test of time has proved to be robust
Don't sweat the small stuff if it can lead to tragedy: radiation used to cure acne leading to leukemia, thalidomide prescribed to reduce morning sickness leading to malformed babies.
1.2.5 An antidote to the lack of accountability seen in the powerfuls who rule us (government officials, corporate honchos, bankers)
Have them have skin in the game, i.e. to share in the downside of their decisions. Taleb quotes the 3000-year-old+ Hammurabi code, "eye for an eye, teeth for a teeth."
So, what's the score? As with his other books, I found myself reading every page the first 40-50 pages, then turning the pages faster and faster as the neat, amusing prose turns into Fidel Castro-style interminable ramblings, hyperboles and inaccuracies, annoying personal anecdotes, and worst of all, the silly little tales with his imaginary heroes Nero Tulip and Fat Tony (Tulip seems to be some kind of idealized version of Taleb himself). One or two hours for the first third, 40 minutes for the second and 15 minutes for the last.
And I'll spare (or maybe not) the "very technical" appendix 2 with its silly little formula he seems to be so proud of. Thanks for teaching us high-school math about convexity (Jensen inequality as if it were rocket science? Come on!)
The basic point is sound however: we sure all need a bit more antifragility in our lives.
If we only ditched what is unnecessary (going to the doctor for trivial stuff, seeking novelty for the sake of it, buying stuff we don't need), we'd have gone a long way toward being more robust.
But going beyond that is more problematic: Taleb waxed lyrical about the upside of antifragility, but he says nothing about its cost.
And seeing how he came to his idea from the world of options trading, it looks dishonest. In options trading, when you buy and option and get all the good stuff associated with it (unlimited upside, limited downside), the flipside is that it costs money everyday (time decay). Spending all your time buying options is quite a good way to the poorhouse.
As in the financial world, so in the real world, unless you're talking about "free optionality" (the people who don't have skin in the game that Taleb reviles). Maybe being a free agent beats being an office drone because one doesn't need to fear getting fired, but what about the daily stress of needing to go out and find work without any certainty to get it? That's a cost that's a bit too high for probably most people.
In conclusion, this is an imperfect, overlong and often eye-roll-inducing book (as is usual for Taleb), but it presents an intriguing and original argument for the reader to chew on.
738 of 802 people found the following review helpful
I begin for readers who have not read anything else by this author, especially those who are familiar with his ideas only second-hand. His second book, Fooled by Randomness, is by far the easiest introduction to his ideas. It is relatively short and illustrates his ideas in dramatic and amusing stories. For people with technical backgrounds, the first book, Dynamic Hedging, makes the points in a much more restricted domain (managing risk of financial options) which allows more precision. The Bed of Procrustes is striking and insightful, but as it is a series of loosely connected aphorisms, the reader has to sort out the links for herself.
Taleb's third and most commercially successful book, The Black Swan, and this one (which may become his most successful), lay out his ideas in more breadth and depth. The three in the first paragraph are relatively non-controversial. They are critical mainly of people who are safe to ridicule, those who are blind to the uncertainty in the universe in fields that are ruled by randomness, such as finance. The Black Swan and Antifragile attack--in the most intemperate language--people, ideas and professions accustomed to reflexive worship. The attacks are vigorous and directed at the core beliefs that underpin large areas of modern life.
These latter two books are more difficult to read. They are long, and their complex ideas are interwoven in overlapping essays rather than dissected in textbook order. Every page contains outrageous contentions that few readers will accept in full. You can skate on the surface taking the books as pure iconoclasm, amusing and provocative but ultimately specious. They're actually valuable taken in that spirit, but they are far deeper and more important than that.
The Black Swan concentrates on the case that long-term outcomes are dominated by events that are individually highly improbable, and also that are inherently unpredictable--Black Swans. Many people have interpreted "inherently unpredictable" as "hard to predict," and set to work on techniques to predict Black Swans. That misses the point. The events only have their impact BECAUSE they were not predicted. If someone invented a Black Swan prediction system, all it would do is make different highly improbable events into the Black Swans.
A common criticism of The Black Swan is that it tears opposing ideas down without giving any positive advice about what to do. That is, if long-term outcomes are dominated by Black Swans, why do anything at all except wait around and hope the unpredictable, improbable events are good for you rather than bad? In fact, there is quite a bit of sound advice in The Black Swan (see the short review by David Aldous at [...] for the best and most balanced summary of the claims) but the advice is about avoiding predictable disaster caused by unpredictable events, and keeping yourself open to positive outcomes from improbable events.
Antifragile complements The Black Swan by celebrating systems that gain from disorder, trading away short-term predictability and micro-rationality for long-term success exploiting macro-unpredictability. It's a bold attitude, amply supported by argument and example from many fields. If anything, it is more outrageous and iconoclastic than The Black Swan. It is Taleb's most important book to date, as it closes the circle. On one level, the universe (at least as perceived by humans) is ruled by disorder, but on another level, the crucial elements are those that gain from disorder as eventually these are fitter for survival than any element, however strong, that requires order.
If you have read any of Taleb's other books, I suggest Antifragile is the best next one to read. If you have not read any, I suggest starting with either Fooled by Randomness or if you have a technical background, Dynamic Hedging; then moving on to Antifragile. However, it is certainly possible to read Antifragile with no prior preparation. Eventually, everyone should read all of his books (or all of his thinking, most of which is available free at his website). But if you have to pick only one, Antifragile is the best choice.
500 of 570 people found the following review helpful
on November 8, 2012
This book has a really cool innovative style. The first appendix is "a graphical tour of the book" where Taleb graphically explains all the main concepts. It renders the nearly incomprehensible visually explicitly clear. I wish nonfiction writers would use such a graphical appendix. The second appendix focuses on really technical concepts for the quants. That's so Taleb can write the body of the book for the layperson. But, for the mathematicians he is willing to drill down in technical details.
The main point of the book is that the World is really complex and genuinely unpredictable. Black Swans (rare) events will always be Black Swans. Any efforts to forecast such events are counterproductive. But, even though we can't forecast Black Swan events we can manage our exposure to them so they don't hurt us or so we can even benefit from them (antifragility). If we simply remain long the underlying risk by attempting to model Black Swan infested variables, we will be exposed to volatility and fail (fragility).
The main underlying concepts are that the majority of causal relationships are nonlinear. They typically have both a convex section where the curve rises exponentially upward and is associated with a positive effect (antifragile) and a concave section that declines exponentially downward and has a negative effect (fragile). Think of the dose of a prescription drug. At first, as you increase the dose the health benefits improve (convexity). But, beyond a certain dose side effects and toxicity cause harm (concavity). This is shown on the first page of the "graphical tour." The trick is to reduce one's exposure to the concave part of the curve (reduce toxicity, reduce fragility) and increase exposure the the convex part (increase benefit, increase antifragility). And, this is true across all domains. The way to do that is use a barbell strategy that positively captures the optionality of the variable (being long in the convex area and short in the concave area).
Sometimes, this (convex vs concave) metaphor is reversed because a beneficial rising section of a variable's curve can be concave and a declining hurtful section can be convex. And, Taleb does use contradicting examples like that. From a geometric standpoint convexity and concavity do not tell you whether a curve is rising or declining and whether they are associated with positive or negative effect. So, you have to pay attention on a case-by-case basis.
Within this book Taleb offers interesting data insights. The more frequently you look at data, the more noise you get. Assume that you are looking at data with a yearly frequency and that your ratio of noise to signal is 50%/50%. If you look at the same data on a daily basis, the noise to signal ratio will change to 95%/5%. If you look at it on an hourly basis it becomes 99.5% to 0.5%. I don't know how he comes up with those figures (pg. 126). But, they are directionally interesting. Thus, Taleb thinks it is a waste of time to watch the stock market on an hourly or even daily basis. Taleb debunks the merit of Big Data. The more variables you look at the exponentially more spurious correlations you will get (pg. 419). This is a case of a rising convex curve with negative effect. "Modernity provides too many variables... and the spurious relationships grow much, much faster than real information, as noise is convex and information is concave" (pg. 420). Taleb does not vest much in 95% confidence intervals. What matters for him is the consequence when you fall outside the confidence interval. If a plane takes off 95% of the time on time. That's pretty good. If the plane does not crash 99% of the time, that feels like a suicidal mission (1 time out of a 100 you'll be dead). So, the probabilities in absence of their consequences are meaningless (pg 260).
Just as in The Black Swan: Second Edition: The Impact of the Highly Improbable: With a new section: "On Robustness and Fragility" Taleb rejects the entire body of modern finance. In "The Black Swan" he did it by stating that the Normal distribution generates inadequately thin tails and understates the probability of rare events. Now, he adds additional arguments. And, that is that Harry Markowitz comes up with the prerequisite parameters of the Normal distribution namely the standard deviation and the mean. But, ignores an error term in each. "If these parameters need to be estimated, with an error, then the derivations need to be written differently and... we would have no Markowitz paper, no blowups, no modern finance" (pg. 447). Taleb further attacks Markowitz portfolio theory because of its reliance on static correlations between investments. Correlations change all the time, and typically go way up during downturns which eliminates Markowitz diversification benefit just when you need it. Per Taleb, Markowitz portfolio theory causes investors to overallocate to risky asset classes. He further advances that Markowitz does not use his own portfolio theory to manage his own investments. Instead, he uses a simpler but more sophisticated method similar to the one recommended by Mandelbrot and himself (Taleb) (pg. 397). On page 220 and 221, Taleb criticizes Myron Scholes and Robert Merton for getting Nobel prizes for their option formula that others discovered in more sophisticated form before them (but he does not mention who they are). On the same pages, he criticizes Mark Rubinstein for attributing techniques to professors in the 1990s that "we as practicioners used in more sophisticated forms in the 1980s".
Taleb attacks a lot more people than just Markowitz and company. Often his attacks are well grounded; sometimes they are less so. He attacks Thomas Friedman because his influential columns helped cause the Iraq war. He also criticizes his book "The World is flat" for promoting globalization without realizing that globalization increases worldwide systemic risks (pg. 386). Taleb has much intellectual contempt for Paul Krugman because he does not understand the weaknesses in the argument of "comparative advantage" that causes countries to become excessively reliant on the exports of a few commodities (pg. 449). He similarly attacks David Ricardo who came up with this original theory (pg. 212). Taleb roasts Joseph Stiglitz for stating in 2008 that Fannie Mae's probability of failure was effectively zero (Fannie Mae was taken over by the government months shortly after) and for the same Stiglitz to write in 2010 on how he had predicted the 2007-2008 financial crisis (pg. 389). Taleb defines the "Joseph Stiglitz problem"... "Mental cherry-picking, leading to contributing to the cause of a crisis while being convinced of the opposite-and thinking he predicted it" (pg. 432). That's actually Taleb's most convincing attack (the Stiglitz problem).
So, who does Taleb like? Steve Jobs. He is the one person that Taleb adulates. He refers to him at length four times throughout the book always in anthological fashion. He likes Job because he was anti-establishment, without academic credentials, autodidact, visionary, aesthete and artisan in temperament. It is easy to agree with Taleb on those counts.
Taleb is at his best when criticizing modern medicine (chapters 21 and 22). Somehow his convex-concave framework allows him to analyze well where medicine overtreats and overdiagnozes. As mentioned earlier, treatment benefits are nonlinear. It is all in the dosage. Medicine has an intervention bias. Doing something (vs nothing) is almost a requirement for defensive purposes (preventing malpractice suits). Medical interventions are also a response to powerful lucrative economic incentives. This medical mindset has created the medicalization of many normal conditions. For instance, the threshold for hypertension and high cholesterol levels have been chronically reduced so a rising portion of the population can be counted as prospective patients for related prescription drugs. Yet, the benefits of those drugs are convex to the severity of those conditions. This means that patients with near normal conditions will not be helped by those drugs and may be hurt by their long term side effects. It is only for patients with more severe conditions that such drugs may be beneficial. Although, Taleb mentions that reducing markers metrics (cholesterol, high blood pressure) does not always correspond
Taleb has much scorn for any monetary and fiscal policy interventions. Even though Taleb starts from the same place as John Maynard Keynes that the future is unpredictable. They tackle this uncertainty completely differently. Keynes propose expansive government policies (both fiscal and monetary) to shore up economies during downturns. Taleb recommends the government to do very little and for individuals and companies to deal with uncertainty by managing their exposure to it (convex vs concave framework). Taleb acknowledge he has an obsessive stance against any government debt at all (pg. 53) and wishes governments never borrowed and always balanced their Budget (pg. 286). On page 101, he lauds George Cooper's The Origin of Financial Crises who damned the Fed for all the wrong reasons and did not understand that its role is to manage inflation and unemployment rate levels. Taleb also criticizes Bernanke for his "Great Moderation" statement less than a year before the onset of the financial crisis. But, he does not give credit to Bernanke for very quickly changing course and coming up with creative expansive monetary policies to prevent the Great Recession from turning into the Great Depression II. On page 303, Taleb indicates that government interventions almost always end in disaster. He got his timing wrong. Disastrous economic shocks occur first, and government interventions to mitigate those disasters kick in second. Additionally, if governments truly never borrowed and central banks never conducted expansive monetary policies the world's capital creation over the past couple of centuries would be a small fraction of what it is today. Economic growth for centuries prior to this recent modern era was minimal (<0.5% per year). With the advent of modern government policies economies have grown far faster.
Many of Taleb's other arguments are weak.
His entire section on city-states being stronger than larger countries is less than convincing. On page 87, he lauds Switzerland for having a decentralized government with much power vested in its Cantons. But, this government model is not that different from Spain's regional governments set up that has currently turned into a fiscal disaster. The Swiss successes has to do with a lot more than its Canton governments. Later, he advances that Switzerland has been very successful with a very low level of formal education. That's wrong. Switzerland has a high level of formal education with 31.3% of its population having an associate college degree or higher. That is much higher than the OECD average of 27.5%, the European Union average of 24.5%, Germany's 24.3%, and Italy's 13.6% (source OECD 2009).
Along the same line, (pg. 90) he states "thankfully, the European Union is legally protected from overcentralization." That makes little sense since the European Union is a uniquely centralized supranational government by definition. On page 97, Taleb somewhat contradicts himself by stating "until recent history, the central state represented about 5% of the economy compared to about 10 times that share in Modern Europe."
As an example of fiscal austerity, he mentions Sweden (pg. 131) "which responded admirably with a policy of fiscal toughness" in response to a severe recession in the early 1990s. But that is the opposite of what occurred. Sweden undertook unprecedented expansive fiscal policies associated with huge Budget deficits (12% of GDP in 1993, 9% in 1994). And, it has been praised as a model of drastic fiscal intervention to fend off major economic downturns and avoid the nearly three decade long Japanese malaise. Granted, Sweden shored up its fiscal position later much after it had mitigated its recession.
When it comes to investment strategy Taleb struggles to make an implementable recommendation. He recommends investing 90% in very safe assets such as Treasuries and 10% in highly risky assets with massive upside (convex antifragile) (pg. 161). Here, I understand he is talking of Puts on stock indices that are way out of the money. Those would become very lucrative in a market crash. However, he recognizes that such financial options are now very expensive (pg. 175). He reiterates that such options are very expensive like insurance contracts (pg. 183). Therefore, it does seem more like an insurance strategy than a viable long term investment strategy to create wealth. That's because your portfolio will lose purchasing power every single year until a market crash. Let's say if you live in California, it may be good to buy earthquake insurance to protect your home from a related disaster. But, this is not an attractive investment strategy.
This is an interesting but very uneven book. It does make you think. But, it has few pragmatic advice. If you are interested in such subjects, Nate Silver's The Signal and the Noise: Why So Many Predictions Fail-but Some Don't is a far more coherent book. I also strongly recommend Richard Bookstaber's A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation. The latter describes in precise details why our financial system is so "fragile." It is a prescient book written before the financial crisis that anticipated many of the reasons why the system would crash (leverage, liquidity, regulatory, and complexity issues). Another good book that articulates why Taleb's position that all models are bad is misguided is The Physics of Wall Street: A Brief History of Predicting the Unpredictable.
65 of 72 people found the following review helpful
on January 6, 2013
I picked up "Antifragile" at Logan Airport in Boston on my way to Greece for a little R & R. I work as a Hospitalist in Gloucester, MA and my 12-hour days don't give much time for outside reading, so I use these getaways to juice what I call my "Airport Education".
I first must warn the reader that this book is not an easy read. Some criticize Taleb for his lack of editing. I had no problems with the editing but the ideas presented sometimes approached the limits of my intelligence, which I consider a good thing.
As a practicing physician I am not really qualified to criticize or endorse his economic concepts although they seem to make sense. I view him more as a modern philosopher and I find his ideas very attractive and thought provoking. I think he is one of the more profound thinkers of our time.
When it comes to his views on medicine, I am very qualified to comment after spending almost 40 years in the medical trenches. What I find surprising is that despite coming from totally different directions, we seem to have ended up in the same place. His view that you should stay away from physicians unless you are seriously ill reflects my experience. Interventional treatments for people who are not seriously ill often do more harm than good. That's one reason I left primary care to work in an acute care setting. Most people who are a little sick simply do not benefit much from additive treatments like medications or many elective surgeries. Over the long run, such treatments often increase a person's fragility.
Subtractive treatments such as lifestyle changes or removing toxic elements from your diet tend to be much more effective at improving your health, leaving you much more antifragile in the long run.
To summarize Taleb's beliefs when it comes to health:
1. Intermittent fasting and starvation are good stressors that improve health and prolong life.
2. Additive therapies such as medications should only be used when a person is seriously ill. If you are only a little ill, subtractive therapies such as removing sugar, HFCS and grains from your diet makes more much more sense because this approach respects our evolutionary history.
3. The only beverages he drinks are water, coffee and red wine. This mimics my preferences. I also sometimes slip in a few shots of ouzo, especially when in Greece.
4. He believes that aerobic exercise is for fools. He does extreme weight lifting, interval training and long, slow walks. In my view this reflects the most research on exercise.
5. He follows the Greek Orthodox calendar to guide his eating and to provide variety in composition, timing and quantity of food. Our ancient ancestors did the same but not out of choice--they had to eat whatever was available to them and this was certainly not on a set schedule. I am also Greek Orthodox and do the same.
6. The only fruits he eats are those he recognized from when he was growing up in Lebanon. They tend to be small and sour rather than large and sweet like our modern fruits.
7. He rarely eats breakfast.
8. He believes that excess fructose is a chronic toxin.
In a nutshell, after years of medical training and 40 years of clinical practice, this is basically what I advise my patients to do because this approach seems to be much more effective than the interventionist approach championed by mainstream medicine. I've had the advantage of time to see how various approaches play out over the long run.
To be honest with you, I think Taleb could put on a white coat, throw a stethoscope around his neck and outperform most physicians when it comes to improving patient's health and quality of life, excluding of course trauma and acute serious illnesses. Yes, this is a compliment to Taleb but it is also a condemnation of our current state of affairs in medicine.
Primary care physicians are paid zippo for preventing diabetes but insurance companies do pay for "managing" diabetes once you get the disease. According to this logic, primary care physicians should have donuts in their waiting rooms! His views on exercise also mirror the latest research showing that the benefits of exercise follow a convex curve--those who don't exercise and those who do a lot of intense aerobic exercise are likely shortening their lives. Those who do moderate exercise--say slow, random walking tend to extend their lifespan.
I know that the focus of his book is economics, yet I believe that his views on health are likely to have a much greater impact on people's lives. After all, if you lose your health, all the money in the world isn't really worth that much.
I highly recommend this book to anyone who wants to challenge their brain and improve their health.
67 of 75 people found the following review helpful
on January 30, 2013
This book has been such a disappointment...
It started absolutely great and has an idea (antifragility) that is worthy and notable and interesting. Wait, let me back up from the beginning: I could not finish this book.
When I read non fiction I tend to stick to certain rules:
1) I want to learn from the books I read. I tend not to read Mathematics, for example, except in formal context, since normally when I read Math being exposed to the general public I noticed how poorly they are really explaining the concepts.
2) I don't read books if I agree with the conclusion. For example, since I am an atheist, I seldom read books on the subject of why we should be atheists, I enjoy the rest of Richard Dawkins works.
3) I refused to be bored. Despite the previous points I do not read books on astrology, for example, because I am certain they will not convince me of their truth (I won't learn from them), but even more certain I will find them utterly and completely boring.
This book started as an amazing jewel. A book where I was reaching for the, thankfully virtual, dictionary almost in every page. When I read the page, almost at the beginning of the book, that said:
"Now we aim--after some work--to connect in the reader's mind, with a single thread, elements seemingly far apart, such as Cato the Elder, Nietzsche, Thales of Miletus, the potency of the system of city-states, the sustainability of artisans, the process of discovery, the onesidedness of opacity, financial derivatives, antibiotic resistance, bottom-up systems, Socrates' invitation to overrationalize, how to lecture birds, obsessive love, Darwinian evolution, the mathematical concept of Jensen's inequality, optionality and option theory, the idea of ancestral heuristics, the works of Joseph de Maistre and Edmund Burke, Wittgenstein's antirationalism, the fraudulent theories of the economics establishment, tinkering and bricolage, terrorism exacerbated by death of its members, an apologia for artisanal societies, the ethical flaws of the middle class, Paleo-style workouts (and nutrition), the idea of medical iatrogenics, the glorious notion of the magnificent (megalopsychon), my obsession with the idea of convexity (and my phobia of concavity), the late-2000s banking and economic crisis, the misunderstanding of redundancy, the difference between tourist and flâneur, etc. All in one single--and, I am certain, simple--thread."
I thought I was in for the biggest treat in reading since Wittgenstein.
Alas, though the book starts in a wonderful way and the idea of antifragility is an amazing idea, at some point you realize something is happening. At first, the author criticizes pseudo scientificism, then stars swearing for Baal. That is followed by an exposition of the trivial truth that there are options outside finance that are poorly priced, as if that was a hidden, previously unknown idea. And finally, around the middle of the book, he dismisses science all together. He claims, and, unfortunately, fails to prove, that science does not produce most of the technological (and others? Not clear) innovations through history. He does this through the simple method of claiming we got it backwards, then claiming that in some cases some people claim we got it backwards, then admitting that there may be a few cases where we got it right, but that those are not important. All this starts with some academicians giving birds lectures on how to fly... Before you continue reading this review, may I remind you again that I could not finish this book? It became boring. Furthermore, if you agree with the author, I should point out that I am, of course, a sworn enemy of what he exposes, having a PhD in mathematics and all. Never lectured birds though, just taught some calculus and functional analysis to non flying human beings.
Case in point. He claims Euclid results aren't used in Architecture. Then admits that the Pythagorean Theorem is used somewhat in architecture. Who has claim Euclid was central to architecture is not clear... But this represents an ignorance of what Euclid did. He was formalizing previous knowledge. This knowledge was not all original, though some was. To say that people knew some of the things Euclid did before he wrote his books, through trial and error is trivial. Before Pythagoras, the Chinese and the Babylonians knew examples of Pythagorean Triangles, the Chinese may even have known the theorem. What we appreciate from Pythagoras is the proof, which Euclid wrote, not claiming it was being written for the first time. To claim that the pythagorean theorem or trigonometry wasn't used in architecture or engineering before the renaissance is just mere blindness. Go ahead, attempt to build a tunnel or measure a distance or calculating how many stones you need for that door, without anything in the books of Euclid. I'll wait. Yes, people didn't cite or knew Euclid, but they were using the results, not referencing scientific literature.
To say that academic research is not based on trial and error is not just a mistake. but not having and inkling of what is involved in any type of academic research, at least in the hard sciences. Academic research, even in mathematics, consist of nothing but trial and error! Yes, afterwards we write the papers as if we knew everything all along, but that is not the practice of science, but its result.
To then say that academic research has not contributed to innovations in technology and to try to claim that "drop outs' have innovated more is confusing the business of technology with technology itself, is ignoring what cryptography is, and how it developed, is ignoring the irony of the applicability of Hardy's mathematical results, is ignoring the history of the World Wide Web, Netscape, Sun Microsystems, NASA, HP, and a million others. It's, simply, claiming as true what you wanted to be true, without examining it honestly. To use the internet as an example of academic research not contributing in technology is to deny a reality that I lived.
At the end, this book is dishonest and boring. Yes, it may have something to be learned from it, but it is an injustice to try to pass crummy thinking as if it was part of a great idea.
104 of 124 people found the following review helpful
I was so impressed by Nicholas Nassim Taleb's book Fooled By Randomness, which I read about a decade ago, that I had to read it again. There were just so many ideas bursting out of it that it was too much to take in in one reading. I was less enchanted with The Black Swan, which seemed to be a rehashing of the ideas in Fooled By Randomness, with a large helping of ego added. But I was still eager to read Taleb's next work, Antifragile, hoping for a return to the Fooled By Randomness originality and unexpectedness.
Sorry to say that Antifragile is The Black Swan on steroids, and I think that is an apt description, since Taleb is so full of himself in this volume that he even regales us with his workout routine, which is a dead giveaway that a person has run out of things to say.
Taleb has an idea which is that many things are improved, or strengthened, by breaking them or otherwise harming them. These things are antifragile. It works the way a vaccine does, exposing the organism to the virus in small doses in order to build an immunity to it. This is actually a pretty interesting idea, although possibly not as original as he seems to think it is (no language in the world has a word for such a notion!), but he can't seem to get out of his own way to explain how we can apply the idea to various fields or how it may have limits. He bangs on about his own background, his pet peeves, his theories about diet, and some fictional characters that he finds more entertaining than the reader does.
I think I've built an immunity to Nicholas Nassim Taleb now, and will have no trouble resisting reading about his next brilliant idea.
46 of 53 people found the following review helpful
on February 7, 2013
Taleb says that of the many languages with which he is familiar that there is no word for anti-fragile. That is because there is no such thing as anti-fragile.
I was genuinely interested in learning about anti-fragile things; things that gain from disorder. However I was disappointed. Taleb gives plenty of examples of natural selection, survivorship bias, serendipity, diversification, dumb luck, spurious correlations, and even a few things that benefit from just the right amount of stress (not too much, not too little, just a Goldilocks amount of stress). But nothing that is genuinely anti-fragile.
As an options trader myself, I was attracted to Taleb's books because he is a former options trader. I must admit I did find "Fooled by Randomness" mildly interesting even though it was just a several hundred page pitch book for his (now defunct) hedge fund.
Taleb's triad of fragile, robust, anti-fragile is just wrong in relation to options trading. Taleb states that being long option volatility is anti-fragile, and being short option vol is fragile and being neutral options vol is robust.
Traders don't blow up because they are short vol. Traders blow up because they are short vol AND their position size is too large. Most traders know from the Kelly Criterion that even with favorable bets you will eventually blow up if you bet size is too big. Long short or neutral.
If Taleb does not know this is then I suspect this is why he is a former options trader.
Likewise with the Black Scholes formula. No one ever blew up because of this either. In fact, it is well known that many traders have made a lot of money from this formula, or early versions of it. Again position size is of utmost importance. Too big, you blow up. Taleb's frequent rants against this formula and Robert Merton become tiring very quickly.
He says that time is the enemy of the fragile. This is probably true. So why then does Taleb classify a street-fighter as anti-fragile when the long term outcomes for street-fighters are not good. Street-fighters at best end up in jail, and at worst...I hate to think.
This leads me to my next problem with this book. Taleb all of a sudden thinks he is tough and imagines himself beating up fellow conference speakers and abusing limo drivers. Taleb look in the mirror (and I know you are reading this), you are a paunchy, balding, gray old man. You are the opposite of tough. Dare I say you are anti-tough?
Normally I would not write such things about an author, but in this case the author has been extremely and unfairly critical of so many people that he deserves it.
Taleb says that "gym rats" (his word for people who regularly workout in the gym) are pretty much useless outside of the gym. How can he possibly assume this? My friends who are "gym rats" also actively participate in some or all of the following: running, swimming, surfing, boxing, martial arts, football, basketball, and snowboarding among other things.
I am mystified by his tirades against universities. He claims that nothing much was ever discovered in a university and gives the example of Steve Jobs not being a university graduate and he has designed many wonderful devices. I am pretty sure Mr Jobs did not go out to his garage and cobble together an iPad out of spare parts. I suspect Apple had hundreds of university educated people that were able to help turn Job's ideas into reality. I bet they even had some Harvard business graduates to help run the business.
I note that Taleb holds a position with a university. Given his intense dislike of these institutions one can only assume that he needs the money.
If you want to follow the investment performance of the black swan gurus then check out "Horizons Universa US Black Swan ETF". If you don't have a Bloomberg terminal go to Google finance and type in TSE:HUS.U. Early days yet but its returns and volatility compared to the S&P 500 do not impress me.
62 of 74 people found the following review helpful
I really enjoyed The Black Swan and looked forward to Taleb's latest book. Like The Black Swan, the book contains a broad set of references to classical authors, philosophy and mathematics, mixed in with quotes in various languages. It makes for a heavy but enjoyable read. To me, this book was a mixed experience, and i found the second half of the book much stronger than the first half. Taleb, more or less, says he has enough F you money not to use or require an editor, in part lambasting them for their inability to make improvements to his work. While this might be true, the book could use some editing to follow the author's admonition that less is more.
The downside of the book is that it often rambles, and the author spends a lot of time complaining about academia and the artificial nature of their world and the lack of value of a formal education for most. While this may or may not be true (I happen to disagree), it comes across in the book as sour grapes. So while there might be some very interesting points, there is just too much of it. I would rather the book skipped all of the complaining. Yes, the author learned most things on his own and dislikes a variety of dinner party conversations etc etc. Yes, a variety of people in academia, corporations and the government are pompous. Yes, some corporate executives are dull (and others are not). I don't need 100 pages of that.
The upside of the book is that its discussions on antifragility -- systems that benefit from random events and variability -- are quite interesting. The author looks at a variety of domains -- finance and medicine in particular -- and how organic distributed systems are much more immune to unexpected events. This is a continuation of many of the themes of The Black Swan, looked at from how some systems are hurt from unexpected events (within range) and others benefit from it. He compares evolved systems in nature to the artificial environments government and corporations often inject. He looks at asymmetric risk relationships and how they can provide great opportunities (or failures) to systems, and also compares many modern systems to classic philosophies. Here the book is at its best. While I found the first few hundreds pages (or books) to have too much complaining, the last several hundred pages (and books) were great.
In short, thought provoking, interesting, and a worthwhile read, but it would have been much better with the griping removed.
120 of 147 people found the following review helpful
on December 5, 2012
I am a big fan of Taleb's Dynamic Hedging book as well as "Fooled by Randomness". I really enjoyed his pragmatic approach to risk management and probabilities. It still resonates with me when he explained that over information (checking the value of your 401K portfolio everyday) will make you prone to see more noise than signal (fluctuations in the short term overwhelm the long term). So I was waiting anxiously to read his new book.
Oh boy, what an embarrassing document. The book is very short on insights and long on personal anecdotes of somebody that do not have to worry about providing the next meal for his family. Taleb has become a pedantic armchair iconoclast detached for any society not related to the U.S or ancient civilizations.
He possesses the truth on everything and he shows how the world is against him but he is right. He criticizes everybody that it's easy to criticize: Central Banks, Investment Bankers, Governments, U.S. Healthcare, Technology, Newspapers. He loves dropping names as well as referencing old books and most of the evidence he provides are from his life experience. Moreover, the book is a continuous contradiction in which he states that controlled shocks and pains make the antifragile system stronger but he never praised when the Fed let Lehman and Bear Stearns fail, what a better way to show pain? or he says that he wants to write a book with no technology, like ancient people did. I guess he has not seen the change in quality of life of people since the printing press was invented. Or realizing that I just pay him over $20 dollars for an electronic edition that I couldn't be able to purchase if I were waiting for his handwritten version to be delivered. He hates journalism and newspaper but he owes all his fame to them. Using Nate Silver's analogy he is a Hedgehog and he is famous because "There are some academics who are quite content to be relatively anonymous. But there are other people who aspire to be public intellectuals, to be pretty bold and to attach non-negligible probabilities to fairly dramatic change. That's much more likely to bring your attention".
Sadly, Mr. Taleb sees himself as a mix between Chuck Norris and The most interesting man in the world. "I don't usually lift weights, but when I do, I'll do it better than anybody else". When Alexander Bell invented the telephone he had 3 missed calls from Nassim Taleb's cellphone.
It will be nice to see Mr. Taleb walking the walk. For example, since he makes so much money in the markets, I would love that he post his trades and predictions so we can learn more about how to exploit this system so easily as he does.
The book is like one of those Mission Impossible movies in which Tom Cruise is on screen 90% of the movie showing you how awesome he is and how he can beat the evil system. If you like that kind of movies, this is your book
92 of 112 people found the following review helpful
How could one give anything less than five stars to a book so filled with insight and erudition? If you have read Taleb's other philosophy books, Fooled by Randomness,The Black Swan and The Bed of Procrustes, and sought out the recordings of his rare media appearances (I recommend the EconTalk podcast interviews) you are no doubt anticipating this book as highly as I was.
Although the concept around which the book is based -- antifragility, the property of gaining from disorder and uncertainty -- is freshly named, it is, as Taleb has said, just another way of looking at his one big idea of "convexity". Graph the observed relationship between any two related variables that affect your life. In a world where most effects are non-linear -- ex. double the medicine dose does not make you twice as well -- you can be on the favorable side of the curve or the unfavorable side. If The Black Swan was all about taking 'tail risk' into account -- focusing on just the tail of the curve -- Antifragile is about the entire curve, and how to find shelter under the bend of it where randomness, chaos, unpredictable events, time, stressors and errors strengthen you instead of destroy you.
Taleb has divided Antifragile into six sub-books which apply this idea across a number of domains. In biology, the mechanics of evolution provide a way to continue life despite massive environmental shocks. In medicine, the concept of hormesis, whereby some substance that is harmful in a large amount is beneficial in a small amount, and the "via negativa", subtractive remedies that remove harmful substances have a better upside than additive remedies, prescriptions of new drugs, which can have rare but fatal side-effects, both demonstrate antifragile qualities. In finance, picking options which are long vega or long gamma. In health, the way bones strengthen with impacts and the way healthy bones reduces the hallmarks of aging. In ethics, systems where people have no 'skin in the game' are extremely fragile, those where they have "soul" in the game are antifragile. In politics, nation-states are fragile, decentralized city states (like the Swiss cantons) are anti-fragile.
The sub-books, of course, are divided much more organically, and can be sampled in any order. Although Taleb plans to soon release all his philosophical writings and technical papers as one large book, The Incerto, which can also be sampled in any order, I do not believe random sampling is the optimal way to understand his work. I think a reader with no knowledge of Taleb's ideas should begin either with Fooled by Randomness or The Black Swan, which assume less familiarity with the concepts, and create the building blocks of the larger idea of antifragility.
Knowing how Taleb feels about Platonism, with all due respect I believe there is a better form of Antifragile that could have been published. The book, compared to his others, contains more awkward phrasing and narrative leaps. The introduction refers off-handedly to Fat Tony, a character from his other books, with no contextualizing for new readers. There is nothing that threw me for long, but I've read his previous books multiple times, and have been closely following the development of this one.
Taleb has said he refuses to be edited. This is a mistake. His writing is antifragile to critiques and reformulation. Not that he doesn't submit it to some shocks. He does put out drafts of his chapters online, and has cultivated a salon of erudites on his facebook page, which provided him some excellent insights in the book.
With as many insights and fascinating detours into the history of science and philosophy as this book contains, any infelicities of phrase can be easily overlooked. Antifragile, in its comprehensive exploration of Taleb's 'big idea', makes his previous ones seem like appendices. The second edition of The Black Swan ended with an essay "On Robustness and Fragility". With this book, Taleb moves beyond being robust and resilient into a third realm, the anti-fragile. While it may not enjoy the same initial mass popularity as his previous books, I suspect Antifragile will endure longer, given the power of its ideas.