Nassim Taleb | Why You Should Embrace Uncertainty

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[00:00:46] The James Altucher Show

[00:00:51] The James Altucher Show

[00:00:55] The James Altucher Show

[00:00:56] So, I am so excited that I've been doing this podcast for ten years

[00:00:59] This is sort of a tenth year anniversary

[00:01:01] And I wanna every now and then

[00:01:04] Reel out the evergreen, like as if they're brand new

[00:01:07] Podcasts that have meant so much to me and I learned so much

[00:01:11] Naseem Taleb is one of the smartest people on the planet

[00:01:14] I've learned so much from this guy

[00:01:16] I don't even know if he knows or cares how much I've learned from him

[00:01:19] I was so grateful he came on my podcast

[00:01:22] There's a little story to it

[00:01:23] So, came to my podcast a few years ago

[00:01:26] And we're gonna have it on now

[00:01:28] But there's a story he might not even be aware of

[00:01:30] So back in 2002

[00:01:33] I wrote to twenty people that I wanted to meet

[00:01:37] And I was broke, I was hungry, I was struggling

[00:01:41] I was losing my house, I was losing family, everything

[00:01:44] And I wrote to twenty people

[00:01:46] People like Warren Buffett and Carl Icahn

[00:01:50] And all these famous investors and writers

[00:01:53] And I said I wanted to meet people

[00:01:55] And only three people responded

[00:01:58] So Jim Cramer responded

[00:01:59] I had written him ten ideas for articles

[00:02:02] He should write for TheStreet.com

[00:02:04] And he responded amazingly and said

[00:02:06] Hey, these ideas are great, how about you write them

[00:02:08] And that started my career as a writer

[00:02:11] I started writing financial columns

[00:02:13] And then expanded out to other stuff

[00:02:15] Victor Niederhofer responded

[00:02:17] Because I sent him literally software programs

[00:02:20] And I said, I know your trading style

[00:02:22] This is for you and your traders

[00:02:25] And if you need any help figuring it out

[00:02:27] You could respond to me, otherwise no pressures

[00:02:29] And I wrote to Naseem Taleb

[00:02:31] And I just loved his book Fooled by Randomness

[00:02:34] And I wanted to meet him

[00:02:36] And I wrote to seventeen other people

[00:02:38] So seventeen people didn't even respond

[00:02:41] Except for Victor, Jim and Naseem

[00:02:44] And Naseem said, oh he'd be happy to meet

[00:02:47] And for some reason I never responded to Naseem

[00:02:50] But then over a decade later

[00:02:52] Many years later

[00:02:54] He came to my podcast and that was full circle

[00:02:57] And I was so grateful

[00:02:58] But anyway, one of the smartest men in the universe

[00:03:01] Here's Naseem Taleb

[00:03:07] This isn't your average business podcast

[00:03:09] And he's not your average host

[00:03:11] This is The James Altiger Show

[00:03:23] Let's look at technology

[00:03:25] Technology works beautifully

[00:03:27] When it destroys bad technology

[00:03:32] In antifragile I discussed the Lindy effect

[00:03:35] Which tells you pretty much the following

[00:03:37] If something has been around for twenty years

[00:03:39] Odds are, it has twenty more years to go

[00:03:42] So if something went around

[00:03:44] Technology and idea that's not perishable

[00:03:46] For a human you don't have that effect

[00:03:49] For a technology you have that effect

[00:03:51] Because there's no upper bound on life of technology

[00:03:54] So if I see an old man and his grandson

[00:03:57] I can say statistically that bearing some

[00:04:00] Problem with the grandson

[00:04:02] Some disease, some whatever problem

[00:04:05] That the grandson will survive the grandfather

[00:04:09] Whereas with technology is exactly the opposite

[00:04:11] If you see very young technology and old one

[00:04:13] Odds are, young technology is not going to survive

[00:04:16] And the old one simply is a concept

[00:04:19] It's application, straight application

[00:04:21] Of the measurement of fragility

[00:04:23] The techniques to measure fragility

[00:04:25] That time either breaks

[00:04:28] Or it's fragile, alright

[00:04:30] Or gives what has some properties

[00:04:33] Some hidden properties of survival

[00:04:35] Gives it some edge, okay

[00:04:37] So when we look now at technologies

[00:04:39] You realize that technology tends to stick

[00:04:41] Are technologies that are destructive

[00:04:43] Of other technologies

[00:04:45] Because the book has not really been replaced

[00:04:47] Okay, but some things have been replaced

[00:04:50] So let's talk about television, alright

[00:04:53] Where people say well there are a lot of social networks

[00:04:56] But think about what we had before

[00:04:59] You sit in a nuclear family

[00:05:02] Or whatever it used to be called

[00:05:05] Watching someone giving you propaganda on screen

[00:05:08] Alright, that's not social life

[00:05:10] Whereas now at least you can communicate with other people

[00:05:13] That's the social network

[00:05:15] So sometimes we're going back to having a social life

[00:05:18] Because of social media

[00:05:19] Exactly, and then the other thing

[00:05:21] Think of computers, alright

[00:05:22] Computers are technologies that have been replaced by what

[00:05:24] Laptops, but laptops have been replaced by what

[00:05:27] Tablets, how did we start writing?

[00:05:29] Yeah, tablets, alright

[00:05:31] So look at what food we have on the table today

[00:05:35] Someone in 1960 would have predicted

[00:05:37] That for dinner tonight

[00:05:41] You were going to have bill and some flying saucer

[00:05:44] Whatever it was, you got the idea, alright

[00:05:46] And effectively you're going to be eating closer

[00:05:49] In a presentation, you see

[00:05:52] Something closer to how your grandparents ate

[00:05:55] Right, and you mentioned the glass

[00:05:58] That we still use a glass

[00:06:00] And that was invented like 3,600 years ago

[00:06:02] Exactly, glass was invented

[00:06:04] It was marketed by at least 3,000 plus years ago

[00:06:09] And glass has, and all we've done is improved glass

[00:06:14] So how can you, what about things that are truly disruptive

[00:06:17] Like a car versus a horse, email versus mail

[00:06:20] The car versus a horse

[00:06:22] But the car has been disrupted by the bicycle

[00:06:25] Which is older

[00:06:26] So you have, the point is it's statistical

[00:06:28] Someone when they talk about life expectancy

[00:06:31] I'm talking about your life expectancy

[00:06:33] I look at insurance table and I have a number

[00:06:36] That number is statistical, it's not deterministic

[00:06:39] There'll be mistakes, and I'm sure you're going to live

[00:06:42] Your life expectancy probably is as of today

[00:06:45] Maybe 84, 85, but I'm sure you're going to live 100

[00:06:50] That's not in a table, you can live longer

[00:06:54] But people live 100

[00:06:55] And some people unfortunately have early termination

[00:06:59] So it's statistical, same thing for technology

[00:07:02] Statistically, new technology doesn't stick

[00:07:05] And statistically it's not going to be replaced

[00:07:07] By old technology so much as by something newer

[00:07:10] You see, and typically the newer will resemble old technology

[00:07:13] And if you see the bicycle resembles a horse

[00:07:15] I see, so in some sense email is actually being replaced

[00:07:18] I see in my daughters, email is being replaced by texting

[00:07:21] My daughter doesn't even look at her email anymore

[00:07:23] There we go, and it started before email

[00:07:25] Yeah, and texting started before email

[00:07:27] So you have, but you can't look at it in a microscopic level

[00:07:33] You've got to look at it at a global, something more global

[00:07:37] Well global and personal

[00:07:39] Because individuals want to be, we strive for anti-fragility

[00:07:43] Yeah, but another comment I'm going to make

[00:07:46] About how the world will look like in the future

[00:07:48] Is going to project the world exactly the opposite way

[00:07:52] Someone in 1960, still with their mind full of modernity

[00:07:56] Would have imagined it

[00:07:58] Imagine a table, how are we going to eat in 50 years

[00:08:01] Or 20 years, we're going to be even closer

[00:08:04] To our ancestors in presentation probably

[00:08:07] But it'll be more efficient

[00:08:09] Yeah, you see, we will, I was talking about walking

[00:08:13] You see, our ancestors walked barefoot

[00:08:16] Which is very good for your back and stuff like that

[00:08:18] And when I go to the park, I see people using five fingers

[00:08:24] So you use technology to protect yourself from the elements

[00:08:29] While at the same time replicating the natural gate

[00:08:33] Well this is how, you can generalize that to how we

[00:08:37] We actually would like to live

[00:08:38] We live in small communities and effectively

[00:08:41] You can build small communities

[00:08:43] And the web in a way is not alienating us

[00:08:46] Contrary to what I myself and everyone I know

[00:08:50] Used to think in the beginning that there's social network

[00:08:53] No, social network would bring us back to what we were

[00:08:57] People communicating with each other

[00:08:59] Going down to Nagora and just trading information

[00:09:01] That's what we want

[00:09:03] We want to give information because somehow

[00:09:05] Information wants to leave you

[00:09:07] It doesn't want to stay in you

[00:09:09] It wants to leave you, right?

[00:09:11] That's an interesting way to look at it

[00:09:13] So I have a story to tell you

[00:09:15] In 2002 I was down on my luck

[00:09:21] Because I had done everything wrong

[00:09:23] I was very fragile

[00:09:25] I made some money in the 90s

[00:09:27] Lost it in 2000, 2001

[00:09:29] 2002 I wrote out about 40 emails out to people

[00:09:33] Saying, hey, can I grab coffee for you

[00:09:35] And three people responded

[00:09:37] And I responded to two of the three

[00:09:39] And I didn't...

[00:09:41] So Jim Kramer responded

[00:09:43] Victor Nitohoffer responded and you responded

[00:09:45] And unfortunately I made the wrong...

[00:09:49] I had the wrong coffee

[00:09:51] I don't remember because...

[00:09:53] No, no, it's okay

[00:09:55] But I wish I had responded

[00:09:57] No, but I had a golden rule written in stone

[00:10:03] You always reply to emails

[00:10:05] What do you do if you get like...

[00:10:07] I get maybe eight or nine a day

[00:10:09] Oh, I'm sorry

[00:10:11] I'm going to give you my cell phone

[00:10:13] You can always reply except when you set the boundaries

[00:10:15] So now I have an auto reply

[00:10:17] No documentary, no this, no that

[00:10:19] No finance discussion, no this

[00:10:21] Someone has a genuine otherwise request

[00:10:25] And usually when I take a day off to reply

[00:10:29] And during that day I cover most of the year

[00:10:31] Back lock in one day, no more than a day

[00:10:35] Typically when I'm in some hotel room

[00:10:37] You know jet lag

[00:10:39] And I replied to a very insightful professor

[00:10:43] Who wrote me a letter three years ago

[00:10:45] And I'm replying

[00:10:47] Those are the best, you can reply after three years

[00:10:49] You can reply... No, because I put it in my...

[00:10:51] I put a star, it's a longer one

[00:10:53] And it was more than a quick thanks John

[00:10:57] For the nice words

[00:10:59] It required some kind of reply

[00:11:01] So please I mean I don't want to be flooded with mail

[00:11:05] But at the time I had a dogma

[00:11:07] And of course things went out of control after the black swan

[00:11:11] Yeah

[00:11:13] And now I have a filter

[00:11:15] In other words if you meet some requirements

[00:11:17] You know I'm obligated to answer

[00:11:19] You see if someone is trying to sell me something

[00:11:21] Or trying to invite me to a type conference

[00:11:23] Of course I don't have to reply

[00:11:25] It's part of the please don't invite

[00:11:27] Journalists I don't reply to

[00:11:29] I don't want journalists in my life

[00:11:31] Which is the reason you know I'm on Twitter

[00:11:33] Or I want minimum amount of journalists

[00:11:35] In my...

[00:11:37] You know

[00:11:39] There's something about the atmosphere

[00:11:41] When you have journalism in it

[00:11:43] Sort of debases it

[00:11:45] Well I think in general

[00:11:47] It's what you say, there's not skin in the game

[00:11:49] So journalism has to respond to a news cycle

[00:11:53] Where by almost by definition

[00:11:55] You're trying to scare you

[00:11:57] There's something about it

[00:11:59] About the system

[00:12:01] I mean I believe in journalists

[00:12:03] The thoughtful ones

[00:12:05] The ones who go to Iraq

[00:12:07] To report from there

[00:12:09] And get kidnapped

[00:12:11] That's a different class from people sitting

[00:12:13] In their garage

[00:12:15] Working for whatever it is

[00:12:17] And making comments for Bloomberg

[00:12:19] On the markets, okay

[00:12:21] And telling you market went down a point

[00:12:23] Of reason and filling

[00:12:25] And in fact it can be very damaging

[00:12:27] Because the journalist caused the Iraq war

[00:12:29] So you're

[00:12:31] Providing

[00:12:33] Noise that causes people to take risks

[00:12:35] Under the illusion of certainty

[00:12:37] This is why I'm...

[00:12:39] But there are other things also with journalism

[00:12:41] The way I have had my ideas treated by journalists

[00:12:43] Told me why I don't need a middleman

[00:12:45] I can go straight

[00:12:47] So I've been using social media

[00:12:49] In a very satisfactory way

[00:12:51] Because I go straight, you know

[00:12:53] Cutting the middleman

[00:12:55] Which has been happening across every industry

[00:12:57] Is a form of anti-fragility

[00:12:59] It is definitely because

[00:13:01] When you wake up in the morning

[00:13:03] And you check your mail

[00:13:05] If you're scared of getting mail from anyone

[00:13:07] This is what I say, son of robustness

[00:13:09] At least to become antifragile

[00:13:11] First you have to be robust

[00:13:13] If you're scared of getting

[00:13:15] If you see an email and you're scared

[00:13:17] Or if you're scared of getting

[00:13:19] An email, it means you don't have the right life

[00:13:21] Yeah, that's true

[00:13:23] If you're scared of someone saying something

[00:13:25] About you on Twitter or something

[00:13:27] It means you don't have the right profession

[00:13:29] If you're scared, because eventually

[00:13:31] If your fragile is going to break

[00:13:33] And people notice it

[00:13:35] You have to put yourself in a situation

[00:13:37] You're no longer scared of that

[00:13:39] Now let me ask you about that

[00:13:41] Because my technique for dealing with that

[00:13:43] Is I don't respond at all

[00:13:45] To anybody saying something negative

[00:13:47] You don't respond at all

[00:13:49] But sometimes you like to mess with a guy

[00:13:51] Because you do respond

[00:13:53] Not always, when I like to mess with someone

[00:13:55] Recently I've had

[00:13:57] Because I'm a Christian from the Near East

[00:13:59] So I'm waiting to find

[00:14:01] Some of these

[00:14:03] What I call Arab intellectuals

[00:14:05] They are sort of like ambivalent

[00:14:07] Yes, we should be this and that

[00:14:09] And I wanted to dump on someone

[00:14:11] Of course I found

[00:14:13] A couple of people and that was fun

[00:14:15] But

[00:14:17] I don't really

[00:14:19] Once in a while, for example

[00:14:21] If someone bothers me

[00:14:23] I have

[00:14:25] A forum to go and state

[00:14:27] And keep going at him

[00:14:29] And if he doesn't like it

[00:14:31] If he doesn't like

[00:14:33] To be bullied, he shouldn't bully

[00:14:35] But it happens to me

[00:14:37] I do it as a form of entertainment

[00:14:39] More than necessity

[00:14:41] If you do it out of necessity

[00:14:43] You're dead

[00:14:45] If you do anything out of necessity

[00:14:47] Exactly, if you have to respond

[00:14:49] To something, you're dead

[00:14:51] If you do it just because

[00:14:53] There's a certain class of people

[00:14:55] Political scientists

[00:14:57] These people bother me

[00:14:59] Intellectually

[00:15:01] And I like to have some form of entertainment

[00:15:03] Because I'm human

[00:15:05] And usually I reserve these episodes

[00:15:07] To when I'm in a restaurant

[00:15:09] Waiting for someone

[00:15:11] And you get in a bad mood of someone's

[00:15:13] Late and you're hungry

[00:15:15] It's a perfect time to be aggressive

[00:15:17] With those people

[00:15:19] But I've had recently

[00:15:21] This paper that you have in your hand

[00:15:23] On Picosha principle

[00:15:25] Mostly is that people talk about GMOs

[00:15:27] They say we have no evidence

[00:15:29] That they're harming, but you don't have evidence

[00:15:31] They're not harming, that kind of stuff

[00:15:33] Some lobbyists from some groups

[00:15:35] Have gone on the web

[00:15:37] And tried to mess with me

[00:15:39] And I enjoy it

[00:15:41] Humiliating

[00:15:43] Frosters

[00:15:45] Or what's called charlatan

[00:15:47] I enjoy it, so it's just

[00:15:49] It's not a good use of my time

[00:15:51] I know but I'm human

[00:15:53] You don't have an hour a week

[00:15:55] To play with people you don't like

[00:15:57] What do you do with that time?

[00:16:09] Thanks

[00:16:39] Thank you

[00:17:09] Let's for the listeners

[00:17:13] Take a step back and talk about

[00:17:15] What is fragility versus anti-fragility

[00:17:17] This whole episode of anti-fragility

[00:17:19] Can only be explained

[00:17:21] And this whole episode

[00:17:23] I went through my own

[00:17:25] How did I get to the idea

[00:17:27] Can only be explained

[00:17:29] By the quest to figure out risk

[00:17:31] And risk again

[00:17:33] At a personal level

[00:17:35] And a global level

[00:17:37] Risk doesn't have actually definition

[00:17:39] This is a strange saying

[00:17:41] And risk requires you to look at events

[00:17:43] And assign probabilities to them

[00:17:45] And see if they're going to occur

[00:17:47] What's the risk of an earthquake

[00:17:49] And if you look

[00:17:51] I dug down

[00:17:53] I spent 20 years trying to define the risk

[00:17:55] I couldn't, nobody has

[00:17:57] The only definition of risk we have

[00:17:59] Is what risk averse people don't like

[00:18:01] And probabilities are very hard

[00:18:03] To compute, particularly small probabilities

[00:18:05] Risk of ruin is very hard to compute

[00:18:07] Well, particularly you don't even know

[00:18:09] What curve or what law

[00:18:11] To apply it to the risk to the probability

[00:18:13] Exactly, exactly, exactly

[00:18:15] In some domains, what I call them

[00:18:17] Centale domains where the Gaussian curve works

[00:18:19] And some other distribution

[00:18:21] We can figure out the risks

[00:18:23] For example, I know that the risks

[00:18:25] Are falling from ladders

[00:18:27] People killed falling from ladders

[00:18:29] Is not going to double

[00:18:31] Next year

[00:18:33] We know that that rate

[00:18:35] Is well captured by

[00:18:37] Common statistics

[00:18:39] What about an actual area of

[00:18:41] Actual risk work for these

[00:18:43] But you cannot use that for terrorism

[00:18:45] Right. You can't use it for wars

[00:18:47] You can't use

[00:18:49] Can you use it for stock market?

[00:18:51] And this is a problem, many traders

[00:18:53] This is why I mentioned

[00:18:55] Victor Niederhofer

[00:18:57] Tends to apply a normal curve

[00:18:59] To stock markets

[00:19:01] It's not the fact that it's normal

[00:19:03] Or not normal, whether it's computable

[00:19:05] The normal curve or that class of things

[00:19:07] Assigns such a small probability to rare events

[00:19:09] That tend to make things computable

[00:19:11] Because average

[00:19:13] Events are sort of predictable

[00:19:15] Who cares? Because they have no impact

[00:19:17] So anyway, I realize

[00:19:19] That we didn't know much about risk

[00:19:21] I don't know what is the probability of an earthquake

[00:19:23] Tomorrow here

[00:19:25] What is the odds of stock market tripling

[00:19:27] These I can't. But on the other hand

[00:19:29] What I can understand very well is how events affect me

[00:19:31] So this is what I

[00:19:33] Went to the literature

[00:19:35] And figured out something

[00:19:37] That very often people

[00:19:39] Conflate, I call it the conflation

[00:19:41] Of events and exposure

[00:19:43] Conflates how events

[00:19:45] The probability of events

[00:19:47] And the risk of events occurring

[00:19:49] And the risk to them from these events

[00:19:51] Let's take an example

[00:19:53] If you have the stock market can crash tomorrow

[00:19:55] That's a big risk

[00:19:57] You own out of the money put on the stock market

[00:19:59] Okay

[00:20:01] And you're pretty comfortable with

[00:20:03] The seller, you know

[00:20:05] The seller of the puts would be in business

[00:20:07] Then you don't care about the stock market crashes

[00:20:09] You see

[00:20:11] Or if you express your views

[00:20:13] In the stock market just with calls

[00:20:15] So who understood that very well

[00:20:17] Chapter one of my technical

[00:20:19] Document called Silent Risk

[00:20:21] Chapter one, the lawyers

[00:20:23] They still understand it very well

[00:20:25] But, you know what

[00:20:27] The other thing that gives you statistical

[00:20:29] Statistical predictions of events

[00:20:31] He hedges against him by reducing

[00:20:33] Your liability and

[00:20:35] Constructing your liability

[00:20:37] It hit me that I

[00:20:39] When I was an auction trader

[00:20:41] And I was an auction trader for 21 years

[00:20:43] Largely, exotic, and complex

[00:20:45] And all I worked on

[00:20:47] Is tried to understand the payoff

[00:20:49] And all I did

[00:20:51] Was not tried to understand the world

[00:20:53] figure out a way to reduce liability from certain class of events.

[00:20:57] And you would ignore that ally.

[00:20:59] Contractually, yeah, because contractually you can eliminate that.

[00:21:02] Contractually, by defining your contract,

[00:21:04] that the contract doesn't cover this, cancels if it so happens or something like that.

[00:21:09] So I realized, okay, so the first thing is that we don't understand risk, but

[00:21:14] we understand exposure.

[00:21:16] And we had more than 2000 years, probability was born with lawyers.

[00:21:20] But don't you think we also ignore exposure?

[00:21:22] Sorry?

[00:21:23] Don't you think we ignore exposure in general,

[00:21:25] like because we assume that the worst is not going to happen to us?

[00:21:27] No, no, people, yeah, but we ignore exposure or sometimes you overestimate

[00:21:31] exposure, but at least we understand exposure and you can construct exposure.

[00:21:34] But so I figured out that divorce.

[00:21:39] And then one day it hit me looking at a coffee cup, all right?

[00:21:45] That I could define fragility while looking at a coffee cup.

[00:21:49] While looking at a coffee cup as I said.

[00:21:51] Was it one of the Greek coffee cups?

[00:21:53] It was a coffee cup on a table and I was looking at it.

[00:21:56] I said, oh boy, I can do it.

[00:21:58] And antifragile started that day.

[00:22:01] All right?

[00:22:02] I started writing it, started doing the math behind it.

[00:22:05] I said for 20 some years, I've been an option trader.

[00:22:09] And we have a definition of things that don't like volatility.

[00:22:13] You see, things, you know, think of coffee cup.

[00:22:16] If there's any random event in the room, not one of them will help it.

[00:22:22] It'll be either neutral or negative.

[00:22:24] So we have an asymmetry.

[00:22:26] Things suffer from, they have more downside than upside.

[00:22:29] I looked at it, I said this coffee cup is short.

[00:22:31] In my option language, we call it short gamma or short volatility.

[00:22:35] I looked at it, I said, oh, we have a definition of fragility.

[00:22:38] Can I generalize to everything, okay, fragile,

[00:22:43] being negatively affected by volatility?

[00:22:47] Ah yes, I can.

[00:22:49] Ah, if I can do that, then I can do something

[00:22:52] because I spent my time as an option trader.

[00:22:55] And also I did my PhD.

[00:22:58] So I did everything on some specific, you know,

[00:23:03] properties of complex option packages.

[00:23:07] So I said, okay, everything that doesn't like volatility

[00:23:11] is fragile and everything fragile likes volatility.

[00:23:14] So, and everything flew from there.

[00:23:16] So you can construct a sort of prism, all right,

[00:23:22] to view the world in three categories.

[00:23:24] The fragile, like short an option,

[00:23:28] there's volatility, it's exposed to it.

[00:23:31] It can blow up, it can suffer whatever the various agrees.

[00:23:34] So let's give some examples of fragile.

[00:23:35] So like if you give one example, which I thought was great,

[00:23:38] an old woman who likes everything to be 70 degrees,

[00:23:42] well okay, an average of 70 degrees is bad

[00:23:45] because if it's 140 degrees, she's dead

[00:23:47] and if it's zero degrees, she's dead.

[00:23:48] Exactly, to explain this, we need one point to explain it,

[00:23:52] which is to explain the link between a coffee cup

[00:23:55] and the old lady, or sorry, an elderly person

[00:23:59] who doesn't like thermal variability,

[00:24:01] which is as follows, is that the whatever

[00:24:05] you can show mathematically

[00:24:07] and this I think is important, okay,

[00:24:10] because it generalizes to so many things

[00:24:12] and now I'm working with physicists

[00:24:14] and on the thing about GMOs and global warming on risk.

[00:24:21] What is important is that what doesn't like volatility

[00:24:24] doesn't like variation, doesn't like stressors,

[00:24:28] doesn't like time, aha, you remember

[00:24:30] we started the conversation talking about time.

[00:24:33] What doesn't like volatility doesn't like time.

[00:24:35] Why? Time is volatility, it's more events happening.

[00:24:38] Right, you see.

[00:24:39] And doesn't like entropy, doesn't like stressors

[00:24:44] and you can very easily make a table of what other things

[00:24:48] that what doesn't like volatility doesn't like

[00:24:50] and put them all in the same group, the fragile.

[00:24:54] So the fragile doesn't like time, sorry?

[00:24:55] It's a huge group.

[00:24:56] It's a much bigger group than antifragile.

[00:24:58] But whatever doesn't like one won't like the others.

[00:25:01] This is what the interesting thing.

[00:25:02] What doesn't like time does like unpredictability

[00:25:06] and doesn't like stressors and doesn't like randomness

[00:25:09] and doesn't like uncertainty

[00:25:10] and doesn't like an increase in scale of distribution

[00:25:13] and doesn't like all these things.

[00:25:14] I feel like you're describing all my emotional relationships

[00:25:17] with people.

[00:25:18] Okay, but up to a point, of course

[00:25:19] some are open-ended subs.

[00:25:20] So this is what doesn't like time.

[00:25:22] So this is the fragile, all right?

[00:25:24] A coffee cup is fragile, okay?

[00:25:26] But with respect, you're always fragile.

[00:25:28] With respect to one, all right?

[00:25:31] What I call source of variation

[00:25:32] or source of randomness or source of stress.

[00:25:34] For example, the elderly person

[00:25:38] is probably extremely fragile

[00:25:40] with respect to the changes in temperature.

[00:25:43] But she may not be fragile with respect to,

[00:25:47] I don't know, emotional stuff.

[00:25:50] Because she has experience.

[00:25:51] Oh, whatever it is.

[00:25:52] You can-

[00:25:53] People have died.

[00:25:54] Some people are very domain dependent

[00:25:55] and what they're fragile about.

[00:25:57] Someone could be a weightlifter

[00:25:59] and his dump by his girlfriend

[00:26:01] and go jump from a cliff, okay?

[00:26:03] So you can't really

[00:26:06] transform one domain to the other.

[00:26:08] So now we have an idea-

[00:26:09] Humans can do that and it's an interestingly.

[00:26:12] So humans have an ability to adapt to multiple,

[00:26:16] let's say social hierarchies.

[00:26:18] So I can be in one domain,

[00:26:19] like handle things emotionally,

[00:26:21] but not be able to handle extreme changes in temperature.

[00:26:26] Whereas other mammals or other animals

[00:26:29] almost can't adapt to anything.

[00:26:31] Humans are more adaptable.

[00:26:32] Yeah, we are, but that's the thing

[00:26:34] that's very important to understand

[00:26:35] that humans are, the reason we're successful

[00:26:38] is because we are, again, not adaptable,

[00:26:43] but we have a broader,

[00:26:45] we depend from,

[00:26:48] we can make it through different environments.

[00:26:52] Thermally, all right?

[00:26:54] And also it's very important we are omnivorous.

[00:26:58] We can eat everything.

[00:27:00] And omnivores, we're omnivores.

[00:27:03] And omnivores are rare.

[00:27:06] It means we can eat like a lion and eat like a cow, you see?

[00:27:09] And do fine in both cases.

[00:27:12] And the problem is people don't understand

[00:27:15] that we are not omnivores by choice.

[00:27:18] Hence we need variability in the food supply

[00:27:23] and we need some deprivation of some food groups

[00:27:26] once in a while because that's how we became omnivores.

[00:27:29] Ah, that's a stressor to the system.

[00:27:31] Stressor to the entire gradual.

[00:27:32] Particularly protein.

[00:27:34] And I said that if we're part lion, part cow,

[00:27:38] the cow has no randomness in a way it eats,

[00:27:42] but the lion has more randomness.

[00:27:44] So you have to have protein less steadily

[00:27:47] than other food groups.

[00:27:49] So I see so in the areas where you're antifragile,

[00:27:52] you want to encourage variability.

[00:27:54] Exactly.

[00:27:55] So let's put some,

[00:27:57] the structure we said the fragile

[00:27:58] doesn't like variation in variability, all right?

[00:28:01] And always fragile with respect to something.

[00:28:03] The robust doesn't really care, you see?

[00:28:07] And of course the antifragile on the right

[00:28:09] wants needs variability.

[00:28:11] And as a matter of fact,

[00:28:12] it dies if it doesn't have that variability.

[00:28:14] So if you just eat protein.

[00:28:15] If you just eat protein,

[00:28:17] you probably would have no kidneys and no time, all right?

[00:28:22] You need, we're made for variability among food groups.

[00:28:26] If you just eat carbs, you also have problem.

[00:28:29] But the thing is what people didn't understand

[00:28:31] when they started following the paleo diet

[00:28:34] is that to follow our ancestors' methods,

[00:28:39] to follow our ancestors what they did,

[00:28:42] you need to match not the food composition

[00:28:45] so much as the food frequency.

[00:28:48] And I just posted the other day,

[00:28:51] I was again, I was in some airport

[00:28:53] and I did the fractal thing

[00:28:55] about how often we should fast to be consistent

[00:29:00] with the environment.

[00:29:02] You should also have the stress or a fasting.

[00:29:04] Interesting, because you mentioned briefly an antifragile.

[00:29:08] There's no proof that breakfast

[00:29:10] really gives you energy for the day.

[00:29:12] This is the most important thing

[00:29:13] is to follow the following guidelines, all right?

[00:29:17] Science is great, it should give us proofs.

[00:29:19] But if there's a habit

[00:29:23] that is not part of our tradition

[00:29:26] and has not been tested for its benefits,

[00:29:28] then you should be suspicious.

[00:29:29] And breakfast is one of them.

[00:29:30] It does a lie and eat to hunt or you hunt to eat?

[00:29:34] All right, so that's why.

[00:29:35] So you don't need energy visibly

[00:29:37] and if you supply yourself too much energy,

[00:29:39] then you dull your system

[00:29:40] and we are a metabolic system.

[00:29:43] Now strangely this idea that I wrote about an antifragile,

[00:29:47] I thought nobody would get it.

[00:29:48] People independently, okay,

[00:29:50] of course have been doing research on fasting.

[00:29:54] On if you're keto adapted,

[00:29:56] that fasting is important.

[00:29:57] And someone has been some few best sellers

[00:30:03] on that seven two diet after antifragile,

[00:30:05] repeating the exact same ideas.

[00:30:07] But to do it right,

[00:30:08] you don't follow a regimen of fasting one day a week

[00:30:11] or you say once every two weeks.

[00:30:13] You need to randomize.

[00:30:15] In other words, you sit fast

[00:30:16] if you fast one day every week.

[00:30:18] You should also fast three days every month and a half

[00:30:24] and the whole week every two years.

[00:30:26] I love this idea.

[00:30:28] No, but if you're made for a statistical environment

[00:30:32] that has variability like thermal variability

[00:30:35] or food group variability

[00:30:37] or frequency of feeding variability

[00:30:40] and you don't have that in your life,

[00:30:42] you are not human.

[00:30:43] You're becoming something else.

[00:30:45] Unfortunately, we have too much control of our environment.

[00:30:49] So we are made just for an environment that has variability

[00:30:54] but risk came with variability because it's the same thing

[00:30:57] just like we had preferences for sugar

[00:31:01] because it came with nutrition, right?

[00:31:03] But it also comes with heart problems

[00:31:06] but we need nutrition

[00:31:07] but the environment then give us the granularity

[00:31:10] to differentiate between small quantities

[00:31:12] and large quantities, you see?

[00:31:14] Because we didn't have that chance.

[00:31:15] The same thing with variability.

[00:31:17] We could not control our environment.

[00:31:19] So we disliked variability and randomness

[00:31:22] and now we live in an environment

[00:31:24] where we can control that small randomness

[00:31:25] and it's killing us, you see?

[00:31:27] So you can kill someone literally

[00:31:29] by feeding them too steadily

[00:31:31] and effectively that's how diabetes comes from

[00:31:33] and how was the evidence?

[00:31:35] I read the papers cited many of them in antifragile

[00:31:39] but many came out later

[00:31:40] that effectively all these fasting stuff

[00:31:43] that have been experimented up to four days

[00:31:47] by Valter Longo, by Mattsen, by all these people

[00:31:51] realize that there are some benefits

[00:31:55] but also especially an absence of other diseases

[00:31:59] that come with it, you see?

[00:32:01] So for example, epileptic seizures for children.

[00:32:04] We know that drugs are good

[00:32:06] but the first most effective thing to start with

[00:32:09] is avoidance of sugar, right?

[00:32:12] Avoidance of carbs, okay?

[00:32:14] And other things, diabetes.

[00:32:16] Diabetes is the first thing should be

[00:32:18] to start someone for a while

[00:32:20] to teach the stressor and see if

[00:32:24] and you can figure out how often they have diabetes, okay?

[00:32:28] But the frequency of famine and our,

[00:32:30] you can back from the disease

[00:32:32] you can get the statistical properties

[00:32:34] of famine and our habitat from that.

[00:32:37] And this is mathematically very easy to do.

[00:32:40] Nobody has done it, but I mean,

[00:32:41] I have a sketch of how it's to be done.

[00:32:43] For example, if you starve yourself for a day

[00:32:45] once in a while, you have some benefits with asthma, okay?

[00:32:50] So you know asthma comes from this, okay?

[00:32:54] It doesn't come from this

[00:32:55] but you can make a statistical link

[00:32:56] and then you can say, okay, diabetes has this link.

[00:32:59] So you're not saying what asthma comes from,

[00:33:01] you're saying how asthma could be avoided.

[00:33:03] You're doing the negative.

[00:33:05] There's a mismatch between us and the environment,

[00:33:08] and it looks like because we have spate of diseases

[00:33:12] that we had to have at least one starvation day

[00:33:15] every fortnight, you see?

[00:33:18] You have to have a week every year

[00:33:20] or so you can back off from the environment

[00:33:22] how what the shape of that statistical curve should be.

[00:33:28] You see with some comfortable precision.

[00:33:32] So anyway, so to go back to the structure

[00:33:34] we have the fragile, the robust and the antifragile.

[00:33:40] What makes the antifragile very powerful

[00:33:44] is that you can measure if something's antifragile

[00:33:47] from local sensitivity

[00:33:49] and that is what is interesting for us.

[00:33:51] For example, why am I making statements

[00:33:53] that fasting is good for you?

[00:33:54] Like that stress of deprivation.

[00:33:56] You have to have some acceleration of gain locally.

[00:34:00] Just like you have to have some acceleration

[00:34:02] of harm locally for something to be fragile

[00:34:04] and let me explain it, right?

[00:34:06] Oh, I can see what fasting you could have both.

[00:34:08] But let me go back to the definition of fragile

[00:34:10] to see how we can go from there from one to the other

[00:34:13] because it's always easier to explain the fragile

[00:34:15] than the antifragile, mostly because our brains

[00:34:17] are risk averse, you see?

[00:34:19] So let me explain the fragile first.

[00:34:23] The first thing you know when you're short volatility

[00:34:26] in the markets is that a 10% drop in the market

[00:34:29] harms you a lot more than twice a 5% drop.

[00:34:35] You see?

[00:34:36] Okay, likewise, if you jump 10 meters

[00:34:39] you're harmed a lot more than you should jump

[00:34:40] than twice if you jump five meters.

[00:34:42] Actually 10 meters you'd go, all right?

[00:34:45] So and five meters again in turn is a lot better,

[00:34:50] a lot worse once five meters

[00:34:52] than two times the risk of two and a half meters

[00:34:55] and so on.

[00:34:56] And things have to be that way

[00:34:57] because if the curve are linear, you see,

[00:35:00] then you would die just walking.

[00:35:03] So you have to have, if I smash my car against a wall

[00:35:06] at 50 kilometers per hour,

[00:35:08] I'm harmed a lot more than 50 times

[00:35:09] if I smash it at one kilometer per hour, you see?

[00:35:12] So and this is the property that has survived.

[00:35:15] Why?

[00:35:16] Because things that are linear to harm already gone.

[00:35:21] So the fragile head, you can detect acceleration.

[00:35:23] If you have acceleration of harm,

[00:35:26] you see, if you start having acceleration

[00:35:27] of harm locally, then you can detect fragility.

[00:35:30] So fragility is almost related to

[00:35:34] almost a survival of the fittest

[00:35:35] because we created the,

[00:35:39] we control the environment of our.

[00:35:41] No, no, no, no, no, no, no, no, no, no, no, no.

[00:35:44] I'm talking to something technical here,

[00:35:45] but I'll get to that.

[00:35:47] In other words, the way fragility

[00:35:48] has to show acceleration of harm, you see?

[00:35:52] It has to come with it.

[00:35:54] You have to have acceleration of harm.

[00:35:55] Some kind of, I call it the concavity argument.

[00:35:58] Likewise, antifragility has to show

[00:36:00] some acceleration of benefit somewhere.

[00:36:02] You see?

[00:36:03] And if you detect that,

[00:36:04] then you have a local antifragility.

[00:36:08] And maybe I'll give you a MOOC,

[00:36:10] many MOOCs I gave the students,

[00:36:11] five minutes where I explained that with curves.

[00:36:14] Why if you have,

[00:36:15] and let me explain why acceleration of benefits.

[00:36:20] What would, is it better for you to have,

[00:36:22] for example,

[00:36:24] if you're convex to have,

[00:36:28] when you say that you have lung ventilator, all right?

[00:36:31] If it's better for you to have 100% of the dose all the time

[00:36:35] or 50% one time, 150% the other time.

[00:36:40] Yeah, would be probably much worse.

[00:36:42] No, much better.

[00:36:44] Oh yeah.

[00:36:44] Exactly.

[00:36:45] And then I mentioned in antifragile

[00:36:47] that lung ventilators,

[00:36:48] people made the mistake of thinking you need steadiness.

[00:36:51] If you have that convexity effect,

[00:36:53] which means that 50% one day, 150, one minute,

[00:36:58] 150% the other minute is a lot better

[00:37:01] than 100% of the dose all the time than your antifragile.

[00:37:05] And that shows an acceleration on a graph.

[00:37:08] You see?

[00:37:09] So it's the same thing with a coffee cup

[00:37:12] where you wanna hit it with intensity of two per say,

[00:37:17] intensity of two.

[00:37:18] You can hit it 100 times in a second, it won't break.

[00:37:21] But if you have the time intensity of one,

[00:37:23] has the time intensity of three, it would break.

[00:37:26] You see?

[00:37:27] So it's a linear combination of two different numbers.

[00:37:31] It's worse your fragile.

[00:37:34] And it's a linear combination

[00:37:35] that's better your antifragile.

[00:37:36] Let's apply it to feeding, all right?

[00:37:39] Or to the temperature.

[00:37:40] Is it better to spend the whole day at 70 degrees

[00:37:45] for your health or spend sometime at 50 degrees

[00:37:50] and sometime at 90 degrees?

[00:37:52] Well, obviously it's better for your health

[00:37:53] to spend to have that variation.

[00:37:55] So linear combination of 50 degrees and 90 degrees

[00:37:58] is better for your health than just 70 degrees.

[00:38:01] It means you're antifragile.

[00:38:02] And you can keep varying the wind,

[00:38:04] the interval to see how to up to what point

[00:38:07] because visibly we're fragile if you,

[00:38:10] instead of having 10 degrees variation

[00:38:12] or 20 degrees variation, you go to 100 degree variation.

[00:38:14] You would die in both cases.

[00:38:16] So you're fragile when it starts harming you

[00:38:19] through the interval and narrowing the interval

[00:38:22] for the same keeping the same average.

[00:38:24] It seems like antifragility in that case

[00:38:26] is almost like a donut.

[00:38:27] Exactly, it is.

[00:38:28] So you have fragility in the middle

[00:38:29] and fragility on the outside.

[00:38:32] So the variability is too much and fragile again.

[00:38:34] Some things are, yeah, something like randomness.

[00:38:36] Yeah, and let me know you're talking about evolution.

[00:38:38] Let me talk about evolution.

[00:38:41] Without randomness you don't have evolution

[00:38:43] because you don't have the fitness.

[00:38:47] Say there are a lot of mechanisms of evolution.

[00:38:50] One of them is noise in your DNA.

[00:38:54] If you have no noise and the DNA is transmitted

[00:38:57] without replicating error

[00:38:59] because every time someone has a child,

[00:39:01] there's a replicating mistake,

[00:39:02] or not every time but statistically

[00:39:04] there are mistakes in replicating the DNA.

[00:39:06] So if you're giving a DNA deterministically

[00:39:10] without mistakes, you don't have evolution.

[00:39:12] But if you have mistakes,

[00:39:14] you're gonna have 10 offspring.

[00:39:15] Some of them will benefit from the mistake.

[00:39:18] Then you have evolution.

[00:39:19] Those benefit get an advantage and keep going.

[00:39:22] So replication error is good.

[00:39:24] So something that likes an error has some advantages.

[00:39:28] The problem is that if your error rate is too high

[00:39:31] you will never conserve the benefit.

[00:39:34] So you have to have some error rate

[00:39:35] not too high and not too low.

[00:39:38] And this is, yeah, this is why what I say

[00:39:41] that antifragility is local.

[00:39:43] It's good for example to have 1% error,

[00:39:48] not 1%, 1 per thousand error rate for example

[00:39:51] because it's good.

[00:39:52] But if you have 10% error rate

[00:39:53] then your offspring will never,

[00:39:55] will not retain that advantage

[00:39:56] to transmit it to their own.

[00:40:02] So antifragility is local except in finance

[00:40:05] where sort of, you know,

[00:40:06] finance always weird

[00:40:08] where you can have things that benefit from volatile

[00:40:10] or you have no ceiling contractually

[00:40:13] or some things may have high ceiling.

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[00:41:30] Again, use a concept of antifragile and convexity

[00:41:34] and I'll show you where we're okay.

[00:41:36] Lift weight, what's better to build muscle

[00:41:38] to lift a thousand times one,

[00:41:41] one kilo or one pound or one time a hundred pounds?

[00:41:48] Well, I wouldn't be able to lift a thousand times one pound

[00:41:51] so I'd have to go with a hundred.

[00:41:53] I wouldn't be able to lift a thousand kilos.

[00:41:57] No, no, no, what I meant is a hundred times one pound

[00:42:00] or one time a hundred pounds.

[00:42:02] Oh, I would say one time a hundred pounds.

[00:42:05] Okay, so there you go.

[00:42:06] So there you get the convexity

[00:42:08] is that every pound gives you more benefits, you see,

[00:42:13] for given the same total amount that you're gonna lift.

[00:42:15] To a certain point.

[00:42:17] Up to a point point.

[00:42:18] But visibly you're not gonna have

[00:42:19] health benefits lifting a thousand pounds

[00:42:21] because then you would break your...

[00:42:23] Give a repetitive stress disorder.

[00:42:25] No, no, no, a thousand pounds

[00:42:26] will break your bones.

[00:42:27] Oh, right, right.

[00:42:28] Whatever it is, if you...

[00:42:30] But if you lift a hundred times one pound

[00:42:32] you just get repetitive stress disorder.

[00:42:33] You won't get that.

[00:42:34] Exactly.

[00:42:35] You won't build any muscle.

[00:42:36] Exactly.

[00:42:37] The whole idea of antifragile is understanding

[00:42:40] what I call the convexity effect.

[00:42:43] The convexity effect if a linear combination

[00:42:46] of two things, all right, is better

[00:42:50] than one thing of the same average.

[00:42:52] But what I like about that is

[00:42:53] you don't have to explain why something works

[00:42:57] because then you go into the realm of mythology.

[00:43:01] You just have to understand this

[00:43:04] measuring this aspect of the individual.

[00:43:06] I'm very skeptical of people

[00:43:09] who try to understand the mechanism.

[00:43:11] Like why does a hundred pound weight build muscle?

[00:43:13] We don't really know.

[00:43:14] Exactly, exactly.

[00:43:15] And I said it here in the book.

[00:43:16] I said that when I started weightlifting

[00:43:20] I was told, hey, there are micro tears

[00:43:25] that fill up and then you eat your protein

[00:43:27] and okay, you have protein shake

[00:43:29] and the micro tears fill up with muscle

[00:43:31] and everybody's happy because they're okay.

[00:43:33] That's a very nice story.

[00:43:35] But then I came back and asked,

[00:43:37] yeah, but how come the lion has so much muscle

[00:43:40] without working out?

[00:43:41] Well, they say, well, it's hormonal.

[00:43:43] They say, ah, hormonal.

[00:43:45] And then discovered that people with exteroids

[00:43:47] grow on muscles.

[00:43:48] So you realize that muscle growth

[00:43:50] is something informational that doesn't seem

[00:43:52] to have much to do with the way people

[00:43:54] used to interpret it.

[00:43:56] But so the theory behind muscle growth

[00:43:59] will change maybe every generation

[00:44:02] or maybe, and we'll never converge

[00:44:04] because science doesn't work,

[00:44:06] does have definitive answers.

[00:44:08] We'll never fully converge.

[00:44:09] But the fact that if I lift 100 pounds

[00:44:12] I will gain muscle will never change.

[00:44:14] Right, so when you can observe

[00:44:15] phenomenology is robust, okay?

[00:44:18] The theories, the explanation are not.

[00:44:20] And people yet have more respect

[00:44:22] for theories than phenomenology.

[00:44:23] Phenomenology is cataloging things

[00:44:25] that have monstrous regularity

[00:44:28] without really understanding the reason.

[00:44:30] And I don't have to explain

[00:44:33] that through what the mechanism

[00:44:35] by which if I hit someone on the head,

[00:44:37] okay, he's gonna not do well, all right?

[00:44:40] You don't have to explain the blood vessel.

[00:44:42] I don't, you know, the fact is

[00:44:44] it won't change the story at all.

[00:44:46] So we have, so in my book,

[00:44:48] the robust are, methodology is very robust, right?

[00:44:51] Phenomenology is very robust, okay?

[00:44:54] It does catalog things

[00:44:57] that we know that if you overeat

[00:44:58] you're gonna gain weight.

[00:44:59] Now, what's the past way that will store the,

[00:45:02] who cares, right?

[00:45:04] If we focus on these things that we know

[00:45:08] we do a lot better, you see.

[00:45:10] And I'm not against science.

[00:45:11] I'm against interpreting scientific theories

[00:45:14] as truths rather than focusing

[00:45:17] on robust phenomenologies, you see.

[00:45:19] And statistical regularities

[00:45:21] are part of that phenomenology, you see.

[00:45:24] The way we handle randomness

[00:45:25] is part of that phenomenology.

[00:45:27] And there are some things that are necessary,

[00:45:29] mathematically necessary,

[00:45:30] absolutely necessary mathematically.

[00:45:32] Like for example, that if you

[00:45:37] are convex in other words, if 80% of it,

[00:45:39] then necessarily you like variability.

[00:45:41] Then necessarily you are antifragile,

[00:45:43] and then the thing, then necessarily

[00:45:45] you benefit from random supply of that thing.

[00:45:49] If you like, if you do better

[00:45:51] and you take those books on starvation now,

[00:45:54] many, many of them showing how cancer cells do,

[00:45:58] okay, but if you look at it,

[00:45:59] you say people effectively do better

[00:46:00] after X days of starvation

[00:46:02] and then they can eat all they want.

[00:46:04] So visibly instead of eating 2000 calories

[00:46:08] for eight days, they eat zero

[00:46:11] and then they can eat the rest.

[00:46:12] They do a lot better, okay.

[00:46:14] But you don't have to go into the mechanism

[00:46:16] to understand that that's a regularity,

[00:46:18] you see, that you can,

[00:46:20] and from that,

[00:46:26] you can make mathematical statement

[00:46:27] without having to understand the process at all

[00:46:29] because it's necessary.

[00:46:30] Well, let me ask you a question.

[00:46:31] Because we've removed so far, let's say from,

[00:46:34] because we have this controlled environment

[00:46:35] that we can control,

[00:46:37] do you have to now measure statistically

[00:46:39] to get us back to-

[00:46:40] That's the problem, okay.

[00:46:42] Let's go back to life, all right.

[00:46:44] We were, had no control over transportation.

[00:46:48] So we walked a lot, all right.

[00:46:50] And now we got better.

[00:46:52] We have, we can make life comfortable with a car, okay.

[00:46:56] Now what do you do?

[00:46:57] You drive your car to the gym to compensate for it,

[00:47:00] you see and walk on a treadmill, you see.

[00:47:02] Normally that's completely absurd, but we do that.

[00:47:04] No, that's a compensating fact to fix it.

[00:47:08] But this is not something new.

[00:47:10] The Greek Orthodox religion forces us

[00:47:14] to have 200 vegan days.

[00:47:16] I didn't know that.

[00:47:17] Because in opulent societies,

[00:47:19] you overeat on lab, you gotta be harmed.

[00:47:24] So we have to, including 40 days of Lent

[00:47:27] or entirely vegan.

[00:47:28] You go through 40 days of purely vegan stuff.

[00:47:32] We have Ramadan in Islam.

[00:47:34] If done properly, you should,

[00:47:36] and Judaism has six days of fasting

[00:47:41] plus recommended a lot of rabbis,

[00:47:43] fast X number of days just to have a clear mind.

[00:47:46] So if you look at, so these are compensators.

[00:47:49] There's no difference from going to the gym

[00:47:50] to compensate from the fact

[00:47:51] that we have too much control of our environment.

[00:47:53] And it's the same thing with like of gold.

[00:47:56] I was in, I mean, you have saunas, all right?

[00:48:00] Where you induce variation, okay?

[00:48:04] And you have reverse saunas.

[00:48:05] I was in Qatar, a place I hope, you know,

[00:48:09] not go back because I don't like their politics

[00:48:13] and they may force me to stay there anyway.

[00:48:17] So I was in Qatar and I noticed that they had a reverse sauna

[00:48:20] which is a room where temperature is kept at something

[00:48:23] like minus 20 degrees centigrade

[00:48:26] where you go for a minute, maximum minute

[00:48:28] to a reverse sauna, all right?

[00:48:30] Now, all these things come from the fact

[00:48:32] that we have too much control of our environment

[00:48:35] and thermal stability and mechanical stability

[00:48:38] and these things are effectively weakening us.

[00:48:42] But then you have to measure whether that's,

[00:48:44] now we're in a position where we have to measure

[00:48:46] if that's good or not.

[00:48:46] Well, we can guess pretty much.

[00:48:49] I mean, we can guess that if you don't walk too much,

[00:48:51] you're gonna gain weight, you're gonna do this,

[00:48:53] you're gonna have this.

[00:48:54] You can guess that if you don't go lift weight in the gym

[00:48:59] as your bone density will do, so you can pretty much

[00:49:02] calibrate your life to have enough.

[00:49:05] And most people do, they live healthy lives,

[00:49:08] you know, live in cities where they walk a lot.

[00:49:11] Well, now it's impossible.

[00:49:12] At some point, it was easy to drive in New York City.

[00:49:15] It was impossible.

[00:49:16] Somehow our environment also is forcing us

[00:49:18] to go back to more ancestral methods.

[00:49:21] Right, and you mentioned there's an anti-fragility there

[00:49:23] because people might complain, oh, I'm stuck in traffic,

[00:49:26] but oh, I'm in a city where,

[00:49:30] or there is some anti-fragility there,

[00:49:32] I'm in a city where everybody wants to go.

[00:49:34] So the fact that I'm in harm means

[00:49:37] I'm in a popular place where there might be money

[00:49:40] and opportunities and so on.

[00:49:40] Exactly, exactly.

[00:49:41] I mean, don't complain about traffic,

[00:49:43] it means other people want to be there as well.

[00:49:45] Yeah.

[00:49:46] It's just that there's something very interesting,

[00:49:47] by the way, about traffic.

[00:49:49] Traffic is highly non-linear and people made mistakes

[00:49:55] of not predicting traffic based on local response

[00:49:58] of delays like the city of New York

[00:50:04] wasn't good at understanding non-linearity with traffic

[00:50:07] is that if you shut off a bridge for example,

[00:50:10] a 59th Street bridge for a film on Saturday,

[00:50:14] don't predict that it's gonna slow down traffic

[00:50:16] by 10 minutes.

[00:50:17] You know, it took me four and a half hours.

[00:50:20] I was stuck in a car, all right?

[00:50:21] So, I mean, of course it's my mistake

[00:50:24] to drive to New York City but that was for dinner.

[00:50:28] You see the idea incidentally talked about traffic.

[00:50:32] Now it's very important to realize

[00:50:35] that risk is not variability

[00:50:38] but our instinct makes it the two of them.

[00:50:41] Like in finance, people think that risk is something

[00:50:43] that moves, no, risk is something that makes you go bust,

[00:50:46] right?

[00:50:47] Because things that move aren't necessarily risky

[00:50:49] but that's what people are afraid of.

[00:50:51] That's very interesting because variability

[00:50:52] you could measure whether something moves or not,

[00:50:54] you can see.

[00:50:55] Exactly, exactly.

[00:50:56] But risk for me is different than risk for you.

[00:50:58] Then risk for each person is different.

[00:51:01] Risk, I mean, depending on the definition of risk.

[00:51:03] Risk of what?

[00:51:05] We define fragility is much easier to measure, right?

[00:51:08] You can say, okay, at what point will this break?

[00:51:13] There is some mapping of risk to fragility

[00:51:15] in some cases called total ruin, right?

[00:51:19] What's the probability of total ruin?

[00:51:20] Okay, but typically risk is not what we think is risk

[00:51:26] because most people who try to control variability

[00:51:28] or portfolio blow up.

[00:51:30] I said that forests, if you try to control

[00:51:33] the fires on forest, you end up letting

[00:51:37] the bad material accumulate and then the forest,

[00:51:39] you know what happened to these forests

[00:51:40] when there's a fire.

[00:51:41] The same thing with emerging market governments

[00:51:45] are in member controlling their currency.

[00:51:47] Like I saw Mexico in 1994 moving like

[00:51:50] 30-30% of the currency, all right?

[00:51:53] I'm still talking like a trader,

[00:51:55] like I said, in the Mexican pace

[00:51:56] so we call it Mexico, all right?

[00:51:59] So I still remember and what happened

[00:52:02] is that if you control volatility, bring it to zero,

[00:52:04] the minute you have a small move, it's out of control.

[00:52:06] You see?

[00:52:08] I've seen, we've seen, we've all seen Argentina

[00:52:13] freezing their currency for a long time

[00:52:16] and then the minute you let it float

[00:52:17] or you're forced to let it float

[00:52:20] or it floats by itself, you know what happened.

[00:52:23] So controlling variability has never been a good idea.

[00:52:29] In any domain, you have to have some element of variation

[00:52:33] for things that are alive.

[00:52:34] So other than like let's say the financial markets,

[00:52:37] what are some clear areas where you see people

[00:52:39] trying to control variability?

[00:52:40] Well I mean I wrote on a black swan

[00:52:42] that Syria was gonna blow up

[00:52:45] because they had no political variability.

[00:52:47] You know, you need maximum political variability

[00:52:50] because things blow up otherwise.

[00:52:52] Flammable material as I said

[00:52:54] and if you generalize it, you realize that

[00:52:57] you want a municipal system where you have maximum variability

[00:53:01] because you are more, it's more of a continuum

[00:53:04] rather than have a president at the top.

[00:53:06] So like a Switzerland type of-

[00:53:08] Like a Switzerland top municipal system

[00:53:10] with a lot of distributed decision making,

[00:53:12] you know, small mistakes made here and there.

[00:53:15] So but Syria, the next one is Saudi Arabia, all right?

[00:53:19] Will be next route to drop.

[00:53:20] They have had zero political variability.

[00:53:23] So the minute there's something,

[00:53:25] nobody knows how deep it can get

[00:53:27] or if you can control it.

[00:53:30] In a political domain, in a lot of domains,

[00:53:32] absence of variability is bad.

[00:53:35] Actually something I discovered recently

[00:53:39] if your heart has too steady a beat,

[00:53:43] the heartbeat is very steady, guess what?

[00:53:45] It's predicted a mortality.

[00:53:48] That's interesting.

[00:53:49] It's very predictive.

[00:53:50] So-

[00:53:51] This is what I get worried about.

[00:53:53] I actually wrote you this email recently.

[00:53:56] I myself have never been to a hospital,

[00:54:00] don't have not gotten sick.

[00:54:02] I'm worried if I ever do get sick,

[00:54:05] my body will just blow up.

[00:54:07] Could be, I mean it could be with age

[00:54:09] that you're getting sick.

[00:54:10] In fact, I'm getting over it.

[00:54:12] Maybe it could be.

[00:54:13] I don't know about, I didn't look at,

[00:54:15] I mean infectious diseases aren't so much my domain.

[00:54:18] I'm just worried that my mind won't be able

[00:54:20] to handle it once I get sick

[00:54:21] because I'll be so fragile

[00:54:24] about the concept of getting sick.

[00:54:26] Really, maybe induce your,

[00:54:27] go to some country or you can contract.

[00:54:29] Give malaria or something.

[00:54:30] Not malaria, something less chronic.

[00:54:33] Where, I don't know.

[00:54:35] It is interesting.

[00:54:36] But you mentioned in the book

[00:54:38] and anti-fragile that you do have

[00:54:39] an anti-fragile personal program for yourself.

[00:54:42] Like you like to for instance walk on uneven surfaces.

[00:54:45] On even surfaces, I like to walk on rocks,

[00:54:49] not walk on roads.

[00:54:50] And there's evidence actually

[00:54:51] that walking on rocks for instance increases lifespan.

[00:54:55] They've done some things.

[00:54:57] I mean, I broke a nose initially

[00:54:59] but since then I've been doing rather well

[00:55:02] and it's, you know, I feel alive after I walk.

[00:55:05] And I think that we didn't understand sleep for a long time.

[00:55:10] People trying to reduce sleep

[00:55:11] and then having problems elsewhere.

[00:55:14] I think we also don't understand walking.

[00:55:16] I say statistically we've been walking so much

[00:55:19] in our history.

[00:55:20] Okay, I need a very convincing reason

[00:55:22] or to stop doing so and there's none.

[00:55:24] Okay, so I try to walk pretty much

[00:55:27] what I try to do as main activity.

[00:55:29] Okay, my activity is some 20 some hours a week minimum.

[00:55:33] But I've noticed one thing is to have a comfortable life.

[00:55:37] I wake up in the morning.

[00:55:38] I don't want to have any obligation except walking.

[00:55:41] And if I walk on something like sleeping on something,

[00:55:44] you know, you walk and I try not to think

[00:55:46] of that thing at all.

[00:55:47] Say I have to write an article.

[00:55:51] And the minute I'm stuck, I don't try to make an effort.

[00:55:55] I just walk and come back, all right?

[00:55:58] Sometimes come back and it pulls out on its own.

[00:56:02] So in other words, never make an effort locally

[00:56:04] to try to solve a mass problem or do something.

[00:56:06] I walk.

[00:56:07] So don't stay at a blank screen or a blank page.

[00:56:10] No, no, nothing.

[00:56:11] Make no effort.

[00:56:12] Life is too short.

[00:56:13] Okay, just go take a walk.

[00:56:15] I think of something else.

[00:56:16] And I think I'm sure some mechanism works better

[00:56:19] when I walk because I'm, you know, my main activity

[00:56:23] since I've been full time into scholarship

[00:56:27] and stuff like that.

[00:56:28] I've been reading and walking, right?

[00:56:29] And the more I walk, the more, I mean,

[00:56:33] I don't spend a lot of time writing.

[00:56:35] It just comes up, all right?

[00:56:37] If I don't walk, I have this blank screen business

[00:56:41] and then you get in trouble.

[00:56:43] Walking is necessary.

[00:56:46] So walking increases the stress, tastes, and practice?

[00:56:50] I don't know the mechanism.

[00:56:51] I absolutely don't know.

[00:56:52] I don't make no statement, no explanation mechanism,

[00:56:54] but I look at statistically how much we've been doing it

[00:56:58] and I apply it and it seems to work.

[00:57:01] So in other words, I don't have to have

[00:57:03] to come up with an explanation to follow Mother Nature,

[00:57:07] particularly if I have usually positive payoff from it.

[00:57:09] But then if I'm going against walking,

[00:57:12] then I want to see the evidence, all right?

[00:57:13] You see the idea?

[00:57:14] If I'm going against the natural.

[00:57:16] And I don't walk on a treadmill,

[00:57:17] I can't come on an outside, I just walk outside.

[00:57:19] So what else is part of your antifragile program?

[00:57:22] Your personal one?

[00:57:23] My personal one is when I go to a country,

[00:57:29] drink local water, one for ethical reason,

[00:57:31] you gotta drink some water, but non purified a little bit.

[00:57:34] So just let's say antifragile thing,

[00:57:38] reduces surprises, all right?

[00:57:40] So we have had so much control over our hygiene

[00:57:44] that people are forced now to take pills,

[00:57:46] can you bear with bacteria?

[00:57:48] Isn't it absurd?

[00:57:49] So exactly like driving to the treadmill.

[00:57:53] Well, so it's always my theory

[00:57:54] that the peanut allergies this generation,

[00:57:56] which we never had before,

[00:57:57] is caused by too much antibacterial.

[00:58:00] It could be because people don't understand

[00:58:02] plus overusing antibiotics.

[00:58:03] Okay, so what I do is I follow the principles

[00:58:07] that risk is what to worry about, not comfort.

[00:58:09] So take no medicine, except if I have something

[00:58:11] very, very severe in which case I don't see one doctor.

[00:58:14] I see four of them.

[00:58:16] And I follow- Fourth opinion.

[00:58:18] And someone gives you one,

[00:58:21] and I double the dose even if necessary.

[00:58:24] You see the idea?

[00:58:25] So medicine is a very nonlinear to condition.

[00:58:29] And let me give you the rationale.

[00:58:31] If you have slightly above normal hypertension,

[00:58:37] like slightly if you're above the normal intensive

[00:58:42] and you take medicine,

[00:58:44] the number needed to treat is something like one in a hundred

[00:58:48] between at best one and 60.

[00:58:51] And as a result of the number of people

[00:58:52] who benefit from the medication is very small.

[00:58:55] Is that usually true?

[00:58:56] If it's slightly one standard deviation away

[00:58:58] from normal, all right.

[00:59:01] So that's fascinating.

[00:59:03] But if you're four standard deviations away from normal,

[00:59:08] or three standard deviation away from normal,

[00:59:11] something in that area, okay.

[00:59:12] And you can use standard deviation because Gaussian,

[00:59:15] it's sort of Gaussian.

[00:59:17] Then the numbers needed to treat are monstrously lower,

[00:59:21] something like 75% benefit from the drug.

[00:59:25] So if you were told you had cancer,

[00:59:27] you wouldn't take any chemotherapy drugs?

[00:59:29] I would go for, I mean, I would not try.

[00:59:31] But if someone tells me I have a headache,

[00:59:33] take this medicine, I wouldn't take it.

[00:59:35] Plus there's some feedback.

[00:59:36] If I start taking medicine from headache,

[00:59:38] then I'm not limiting the cause, cause just a symptom.

[00:59:41] But no, to go back, so it tells you,

[00:59:43] but the harm from medicine is the same

[00:59:46] whether you're high, you see that is the same.

[00:59:49] So the ratio of gain, all right,

[00:59:51] is not there for mild condition.

[00:59:53] But the problem is pharma has a difficulty

[00:59:57] finding people who are very sick.

[01:00:00] So because of 5,000 more people who are very,

[01:00:06] sorry, slightly hypertensive, then very hypertensive, you see.

[01:00:10] And that's, this is why we tend to overtreat people.

[01:00:13] And so you have to let the variation

[01:00:16] and the stressors take care of themselves,

[01:00:18] they make you better,

[01:00:19] and make sure the extreme is taken care of.

[01:00:22] Okay, so this is a great field.

[01:00:23] So medicine, what's another area personally?

[01:00:27] What about like in relationships?

[01:00:31] In relationships, I don't know.

[01:00:32] I don't have, I have a very boring,

[01:00:34] you know, I mean, I'm very boring.

[01:00:36] Seems like marriage is a fragile thing.

[01:00:38] I don't know.

[01:00:38] I've seen people, all right,

[01:00:41] who have, who don't know how to manage,

[01:00:46] you know, the social life, okay,

[01:00:48] relationship and overall with their friends,

[01:00:51] partners and stuff like that.

[01:00:52] And I try to avoid these people, okay, completely.

[01:00:54] And put them, you know,

[01:00:55] I cut losses very quickly as a trader.

[01:00:57] So like I, if you see someone,

[01:01:01] a businessperson who had a problem with a partner,

[01:01:05] I cross the street.

[01:01:06] I don't get, I mean, I may have coffee with them,

[01:01:08] but I will never do business.

[01:01:10] So this is something you learn

[01:01:12] is some people are troublemakers

[01:01:15] and to stay out of, you know, that.

[01:01:18] But in social relationships,

[01:01:24] can disruptive people be helpful?

[01:01:26] In other words, can have anti fragility

[01:01:28] by having disruptive people socially?

[01:01:30] I don't know.

[01:01:32] I try to avoid disruptive people

[01:01:35] and also, but I myself try to be disruptive

[01:01:39] if I don't like something.

[01:01:40] Although it sounds like you selectively

[01:01:43] expose yourself to stressors like on Twitter or something.

[01:01:46] And Twitter is not a stressor.

[01:01:48] Twitter is I aim to just start making,

[01:01:50] I'm enjoying the medium and it's calculated.

[01:01:54] It's much more calculated by picking on targets

[01:01:57] that I don't like, like a couple of economists and publicly.

[01:02:01] So, but in private life,

[01:02:05] I haven't had many,

[01:02:10] I don't know if in private life I've had many fights

[01:02:12] except you see some person drunk at a party

[01:02:16] and I, you know, control the person and get them out.

[01:02:21] But you don't expose yourself to variability there.

[01:02:23] You stay around positive people.

[01:02:24] I haven't, no, I don't.

[01:02:28] I haven't had street fights in a long time.

[01:02:31] Haven't had no street fights,

[01:02:34] no actually shouting match, nothing.

[01:02:37] But you know it's funny thinking of fighting

[01:02:39] like gaming in general, like chess.

[01:02:41] It's good to study multiple openings

[01:02:43] so you understand chess better,

[01:02:44] to have variability in your knowledge.

[01:02:49] Just I don't know.

[01:02:51] All I thought about is that I remember

[01:02:56] you know, figuring out that being good at chess

[01:02:58] doesn't make you necessarily good at other things.

[01:03:02] That's definitely true.

[01:03:03] It's very domain specific but is it also,

[01:03:09] does it try, how much transfers?

[01:03:11] I've had a lot of stories, I don't know how much transfers.

[01:03:14] But so this is why I try to avoid analogies to game

[01:03:17] because life doesn't resemble games

[01:03:18] and people think life resembles games,

[01:03:21] tend to get in trouble.

[01:03:23] But I think that you have to have an element

[01:03:25] of surprise in your life.

[01:03:28] Now let's talk about life.

[01:03:29] What I think is a way to be non-fragile in your life.

[01:03:34] If you're an employee, you're fragile for life.

[01:03:36] Because even if you're promoted or demoted,

[01:03:38] it's unpleasant for you.

[01:03:40] It's fragile.

[01:03:41] Because if you're promoted,

[01:03:42] you got a small increase in salary

[01:03:43] by a huge increase in responsibility.

[01:03:45] My point is if you're gonna be employed,

[01:03:48] better be the lowest person,

[01:03:50] the night guard at a company or someone who...

[01:03:53] No responsibilities and you get income.

[01:03:56] And you got income and then you can write poetry at night

[01:03:59] or paint or do things.

[01:04:00] And developed countries like Switzerland,

[01:04:06] if you wanna be a writer it's much better to be a,

[01:04:11] work at the minimum wage than we were very comfortable

[01:04:16] rather than be a university,

[01:04:20] English teacher or a German teacher

[01:04:22] or whatever it is to write books.

[01:04:24] So being an employee makes you very fragile

[01:04:28] because the way people start viewing the world

[01:04:31] prevents them from following their own ethical inclinations.

[01:04:35] Right, so they'll choose to make an ethical exception

[01:04:38] to get a promotion for instance?

[01:04:40] Or no, for example, you may work for a tobacco company.

[01:04:43] You may buy a stock in a tobacco company

[01:04:44] because you have a budget to make.

[01:04:47] So these are ethical dilemmas

[01:04:49] that you cannot escape when you're employed.

[01:04:52] It's similar then to make a budget,

[01:04:55] so owning a home makes you more fragile than renting?

[01:04:58] It depends, I mean, personally I never borrowed a penny

[01:05:02] and almost never, I had an arbitrage once

[01:05:08] when my first job...

[01:05:09] Trading doesn't get it.

[01:05:10] No, at Banker's Trust after.

[01:05:13] So I notice that people who have a mortgage

[01:05:16] have, of course, the prisoners of the system

[01:05:19] and they underestimate the duration of their employment

[01:05:22] and when they start fearing the boss

[01:05:24] and if the boss calls them to their office, they're in trouble.

[01:05:28] If you have money on the side, you're much more robust

[01:05:32] and money on the side is the opposite of debt.

[01:05:35] It's like having an extra reserve.

[01:05:36] You don't have to predict what's gonna harm you

[01:05:38] and you depend less on the boss getting rid of you

[01:05:41] because the boss doesn't like you.

[01:05:42] Can you imagine how miserable it is,

[01:05:43] how unnatural a life it is being in an office for 30 years

[01:05:48] with someone you hate?

[01:05:50] And many people do it.

[01:05:51] And in nature you've been killed

[01:05:54] or you would have killed within minutes.

[01:05:58] So many people, this is a stressor that's not good for you.

[01:06:01] The chronic stressor is not good for you.

[01:06:02] The varying stressor and the high intensity

[01:06:06] once in a while stressor is good for you.

[01:06:08] You see, and of course it maps to

[01:06:11] what Sapolsky have established about acute versus chronic

[01:06:14] stressor and stuff like that.

[01:06:15] But the stressor was recovery, that is.

[01:06:19] But to go back to having a good life is I plot an antifragile.

[01:06:23] I compare a taxi driver in London

[01:06:26] who has high randomness visibly

[01:06:28] to his brother who's an employee of a, whatever,

[01:06:32] a cushy has a cushy job,

[01:06:33] making the exact same salary, very predictable.

[01:06:36] If his brother loses his job, he's gone.

[01:06:39] A taxi driver is protected by the variability

[01:06:42] because the variability forces them to adjust.

[01:06:46] So if you don't have business near Heathrow,

[01:06:49] you try to find another airport, you see?

[01:06:52] Or maybe you try to find nightclubs.

[01:06:54] You're adapted, if you're making a living

[01:06:57] from a taxi driver in London,

[01:06:58] you're adapted to the environment, you see?

[01:07:00] Because every trade is a new trade, as they say.

[01:07:03] And even if a disruptive company comes along

[01:07:06] like an Uber, you can just become an Uber driver.

[01:07:09] You can move around.

[01:07:10] But this brother spent 30 years in a cushy with a company,

[01:07:14] the company has financial problems, he's gone.

[01:07:16] And he's not gonna land another job at age 53, all right?

[01:07:20] Something quite important.

[01:07:22] Every system that's organic

[01:07:25] communicates with its environment via stressors.

[01:07:29] So your lift weight, it's a stressor,

[01:07:32] your system will code for higher,

[01:07:36] you know, higher bone density and more muscle, you see?

[01:07:39] You go on the sun, you get a signal

[01:07:43] and then you'll code for more protection from the sun.

[01:07:46] So you get suntan, all right?

[01:07:49] I like your point, and Antifragile,

[01:07:51] that we've been in the sun for millions of years

[01:07:54] and never got like skin cancer from it,

[01:07:56] as far as we know.

[01:07:58] I didn't make that point so much

[01:07:59] that I was questioning the idea

[01:08:02] of avoiding radiation completely.

[01:08:05] Except if you don't have the racial characteristics

[01:08:08] and the racial, the skin tone characteristics

[01:08:10] of the area in which you live.

[01:08:12] Like if you're an Irish person living in Australia,

[01:08:19] there's no, there's a problem, right?

[01:08:21] But if you're an Irish person living on Ireland,

[01:08:24] I don't know, you see?

[01:08:25] And effectively it looks like,

[01:08:27] and now we have evidence that a little bit of radiation

[01:08:30] is very good for you to prevent,

[01:08:33] protect you from cancer.

[01:08:35] So elimination of radiation makes you fragile.

[01:08:39] Just like a little bit of bacteria is good for you

[01:08:41] to protect you from bacteria, you see?

[01:08:43] If you live in a sterilized room,

[01:08:45] you're not gonna do very well when you come out of it.

[01:08:47] So it's among these class of things.

[01:08:50] But so when you are in professionally a consultant, okay?

[01:08:55] You're not an employee, a consultant.

[01:08:57] You're gonna have variability in your income,

[01:08:59] but every morning if you're still making a living,

[01:09:02] all right, you're fit for whatever environment there is.

[01:09:05] So okay, so there you're minimally resilient,

[01:09:09] but not yet anti-fragile.

[01:09:10] You have to get minimally robust, okay,

[01:09:15] to get in the right direction of anti-fragile, you see?

[01:09:19] Something anti-fragile is effectively something

[01:09:22] that gains from stressors to the system

[01:09:26] and improve from it.

[01:09:27] You have also to avoid looking at humans as a unit.

[01:09:32] You have to look at systems, you see?

[01:09:36] So sometimes the fragility of the person is necessary

[01:09:39] for the safety of the system.

[01:09:41] Take the restaurant business.

[01:09:43] If restaurant weren't fragile, wouldn't go bankrupt,

[01:09:45] you wouldn't have a healthy restaurant business

[01:09:49] where people can eat well.

[01:09:51] So how can the individual be what can you do

[01:09:55] in that environment?

[01:09:56] You have to make sure that you're capable

[01:09:58] of starting a new restaurant very quickly.

[01:10:00] So it's almost like you have to build the sensibility

[01:10:02] that if this restaurant fails,

[01:10:04] at least I'll have the experience to build a better restaurant.

[01:10:06] Exactly, and then you have to integrate

[01:10:07] that failure in your learning curve.

[01:10:11] But to really be anti-fragile,

[01:10:13] you have to be in a business of trial and error

[01:10:16] where all your side effects are gonna be beneficial.

[01:10:20] And there's no business, it used to be,

[01:10:22] no longer like that,

[01:10:24] that benefited from its own mistakes better than pharma.

[01:10:28] Because if you're in that business,

[01:10:29] you make a mistake with your hypertension medicine

[01:10:35] doesn't has a side effect.

[01:10:37] Well, that side effect leads to Viagra, for example.

[01:10:39] That's the good news, you see?

[01:10:41] And effectively, if you look at,

[01:10:44] I mean, I have a big bone with academic research

[01:10:47] with everything, trying to exactly,

[01:10:49] map the environment, thinking we understand it

[01:10:51] and fooling ourselves

[01:10:53] rather than focusing on payoff, again,

[01:10:59] trying to predict rather than focus on exposure,

[01:11:01] have a convex exposure, anti-fragile exposure,

[01:11:04] is something like the best model is cooking.

[01:11:08] You cannot imagine what something to taste like

[01:11:12] just from writing down on a piece of paper

[01:11:14] the chemical composition.

[01:11:16] You cannot, no, you have to try.

[01:11:18] Well, that protects us from having

[01:11:19] too many theories in cooking.

[01:11:22] And then everything goes by trial and error.

[01:11:24] So, but why does trial and error work well?

[01:11:27] Whereas I'm trying to make the perfect hummus.

[01:11:30] I add an ingredient, all right?

[01:11:32] It doesn't taste good.

[01:11:34] I give it to my mother-in-law, you see?

[01:11:36] So you have, you're down side is small,

[01:11:38] but if I hit on something great,

[01:11:40] then I'll have my great hummus, you see?

[01:11:44] So pharma worked that way.

[01:11:46] And the rate of growth of medical research

[01:11:50] in gains and finding drugs and cures and all that

[01:11:53] was much higher on the trial and error

[01:11:55] than today that we think we understand biology.

[01:11:59] You see?

[01:12:00] So mistakes, so given that we make mistake,

[01:12:02] we might as well be in a violent world

[01:12:03] benefit from mistakes, you see?

[01:12:05] So the restaurant industry benefits

[01:12:07] from the stake of its members to improve.

[01:12:10] The airline or the transportation industry,

[01:12:13] every plane crash reduces the probability

[01:12:15] of next plane crash, benefit from its mistakes.

[01:12:17] So that's a healthy system,

[01:12:19] but it's not necessarily always good news

[01:12:21] for the people at the bottom,

[01:12:22] but nevertheless we can say that if they died,

[01:12:26] at least they've saved more lives than the ones that perished.

[01:12:31] So given like the current economy,

[01:12:35] which is sort of floating on top of these bailouts from 2009,

[01:12:39] what's your stance?

[01:12:41] Well, I mean bailouts are of course

[01:12:42] against my religion, against everything I believe in

[01:12:45] because you're disrupting the system,

[01:12:46] creating moral hazard.

[01:12:47] You didn't let the crash happen.

[01:12:51] Yeah, but the counterfactual is wrong.

[01:12:54] My peers say, well, would you have saved

[01:12:56] the economy let it fail then?

[01:12:58] If it's a wrong counterfactual,

[01:13:00] you would have opposed bailout since 1982

[01:13:02] when Mr. Reagan started bailing out the banks.

[01:13:06] 83, when they bailed out Connell Illinois

[01:13:10] when it started having these systems.

[01:13:13] So the bailout situation is tricky.

[01:13:16] You cannot say well, you have to look at it as an ensemble.

[01:13:20] Build a system that doesn't require bailout.

[01:13:23] And we know how to build these systems.

[01:13:26] What's the system that doesn't require bailout?

[01:13:27] Well, the first thing is you force everyone in banks

[01:13:30] that require bailout to be,

[01:13:33] why are we bailing out the bank?

[01:13:35] We're being, it's too big.

[01:13:36] We're not bailing out the restaurant.

[01:13:37] Although the consequences locally on the person

[01:13:41] and the staff are the same.

[01:13:43] They're gonna be unemployed Monday morning

[01:13:47] and with financial losses, but we don't care.

[01:13:49] We care about protecting the system.

[01:13:52] So if someone is making $20 million bonuses

[01:13:56] and we're gonna bail them out,

[01:13:57] if they can mistake if he's wrong, that's wrong.

[01:13:59] So any business that's bailable out

[01:14:01] should not have these bonuses.

[01:14:04] And people tell me well, we lose talent.

[01:14:06] I say that the banking industry has proved

[01:14:09] only one talent that have getting paid individually

[01:14:14] because it's a business that never made money.

[01:14:17] You see, so this is how you structure a system

[01:14:21] to be robust from the inside.

[01:14:22] Do you structure a business, the banking business

[01:14:24] to be like the restaurant industry?

[01:14:26] You don't structure it to be something like government.

[01:14:29] And another thing that's very central

[01:14:32] for a system to work well

[01:14:33] is to have what I call skin in the game

[01:14:35] and other people bear direct consequences for action

[01:14:38] not because it's a deterrent, but because it's a filter

[01:14:42] because if you go bust yourself, you're out of the pool.

[01:14:46] You see, if you're a bad driver, okay, that's fine.

[01:14:50] You're allowed to be a bad driver,

[01:14:52] but we don't want you to harm others.

[01:14:54] So if bad drivers tend to die

[01:14:57] because they get into accidents or kill other people

[01:14:59] they would much more likely reduce

[01:15:02] the number of fatalities than if they didn't survived.

[01:15:07] Likely kill, you know, those who kill other people driving.

[01:15:09] This is my idea of skin in the game

[01:15:12] as a symmetric risk thing

[01:15:15] that causes bad risk takers to be harmed.

[01:15:20] Or at least learn if they're...

[01:15:24] I don't believe in learning.

[01:15:25] I really don't believe in learning at the individual level.

[01:15:27] I believe systems learn through filters.

[01:15:30] I don't believe in learning at the individual level.

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[01:16:46] What about entrepreneurship though?

[01:16:48] So if somebody starts a business and fails, they might learn from that experience.

[01:16:51] Yeah, they learn from the experience and also the business model of entrepreneurship

[01:16:56] is what I was in.

[01:16:57] Out of the money options.

[01:16:58] I bought out of the money option, I always lost money.

[01:17:01] I was in business of you know and you know people...

[01:17:03] Ah it's very interesting entrepreneurship is like buying out of the money options.

[01:17:06] Exactly.

[01:17:07] And you have people who kept telling me that I was doing the wrong thing and they

[01:17:11] still work for a living.

[01:17:12] You see?

[01:17:13] And so I can only smile and say okay be polite to them and they teach you how

[01:17:18] because the...

[01:17:19] And then my reason is that the tail and the tails okay is any error in model alright means

[01:17:26] the tails have to be more valuable.

[01:17:29] More valuable.

[01:17:30] And it's a little complicated to do without a graph.

[01:17:33] No, no, that's interesting.

[01:17:34] So entrepreneurship is actually saying the tails have more value than anybody else

[01:17:38] thought before.

[01:17:39] And so you're going to develop your business and those tails.

[01:17:42] The world is built today by entrepreneur.

[01:17:44] Everybody who short tails there's no business that short tails are still in existence.

[01:17:49] Insurance companies are the only one who do it because they do it with things that are

[01:17:52] sent tail and kept the tail.

[01:17:54] They don't have the exposure in the tail.

[01:17:56] Insurance companies people don't understand that.

[01:17:58] Insurance companies, they don't sell tails.

[01:18:00] They sell the body distribution and they block you.

[01:18:02] For example your house, they cap you alright.

[01:18:05] What interests me is beyond the cap.

[01:18:08] So I mean I was in a business of buying tails alright or at least protecting people

[01:18:13] from not having the tails and stuff like that.

[01:18:15] So it is when you're in a business like that, you start looking at the world with tails

[01:18:21] and you see who understands tails.

[01:18:23] And you realize entrepreneurship, if the tails weren't mispriced by the world, we wouldn't

[01:18:28] be where we are today.

[01:18:30] You see?

[01:18:31] Look at the wealth generated.

[01:18:32] Where did the wealth come from?

[01:18:33] All right tail things.

[01:18:35] Businesses.

[01:18:36] Computers.

[01:18:37] Entrepreneurship is a right tail proposition alright.

[01:18:41] And the businesses that will short the tails there's three of them alright.

[01:18:45] One thing is one, never made a penny.

[01:18:47] Another one is insurance, reinsurance.

[01:18:52] The ones that made even substandard stuff was because they were capping the tail you see.

[01:19:00] So let's take someone like Warren Buffett though who does catastrophic insurance on

[01:19:05] stadiums.

[01:19:06] Well cat insurance, the ones overwritten by these people are not tail events because

[01:19:11] they're capped.

[01:19:12] And my tail starts beyond.

[01:19:14] I had recently someone, I was waiting.

[01:19:19] I said I'm not going to attack and print my ideas until I'm waiting for someone to publish

[01:19:25] something criticizing my ideas and antifragile about the tails and okay.

[01:19:31] In a journal so I can publish it in scientific journal.

[01:19:34] And some idiot who's a risk manager or whatever said oh Talab is wrong look there's

[01:19:38] no volatility.

[01:19:39] Tails are not volatility.

[01:19:42] The risk is how much of the volatility explained by the tail you see.

[01:19:47] So it allowed me to make the point that a business that is fat tailed and as a result

[01:19:54] where the tail plays a large role has usually less variation.

[01:19:59] You see and more the variation comes from jumps.

[01:20:02] So like look at the.

[01:20:03] When you have a fat tail you start to get into a parallel.

[01:20:05] Sorry?

[01:20:06] When you have the fat tail could be a parallel.

[01:20:08] But one of the characteristics of a fat tail is not that there is the fat tail event because

[01:20:14] often you don't see that there's no volatility outside the fat tail event.

[01:20:18] You see and mathematically you showed this mathematical in that paper and publish of

[01:20:22] course in the same journal.

[01:20:24] What I call elements of quantitative finance what people don't understand about tail.

[01:20:29] It was for a mistake but it was very interesting because then I caught a risk manager who

[01:20:34] didn't understand risk.

[01:20:36] The risk isn't in variation and effectively when you shift to the fat tailed.

[01:20:41] In other words it's not so much volatility.

[01:20:43] The VIX doesn't represent fat tailedness.

[01:20:45] It represents variation and usually to build like I used to build a fat tail trade outsell

[01:20:51] volatility and buy the tails and all behind by medium volatility.

[01:20:55] Not very fat tailed volatility which is what people couldn't understand what our business

[01:20:59] was telling them I don't want medium volatility.

[01:21:01] I want no volatility or maximum volatility.

[01:21:05] So to really map it into businesses that have typically you can tell actually that businesses

[01:21:11] that are short the tail tend to have steady income and businesses that are long the tail

[01:21:16] tend to have erratic, highly variable and typically not good outside of tail events.

[01:21:28] These are the businesses effectively that have produced what we have in the world.

[01:21:32] Now scientific discoveries of fat tailed events is hunting for out of money options.

[01:21:35] They are on cost.

[01:21:36] I mean we spend a lot of money trying.

[01:21:39] Pharma is the biggest fat tail of the industry.

[01:21:41] You look how much money they are doing.

[01:21:43] What's their business?

[01:21:44] Their business is keep trying, keep trying, keep trying.

[01:21:46] You have cost of trying.

[01:21:47] We have small losses.

[01:21:48] Out of the money option and you finance it.

[01:21:51] So what's ruined in a little bit is that the FDA requires more and more money to

[01:21:57] get a drug through trial so it's hard to do trial and error.

[01:22:00] The cost of trial and error increases visibly with other regulation and other environments

[01:22:06] and increases also under okay what happened is that if you're what people don't realize

[01:22:12] is the return is much more linear to a number of trials than to total dollar spent.

[01:22:18] And people now go for blockbuster drugs so they spend a lot of money in one direction

[01:22:23] so more prone to error.

[01:22:26] When you hunt for fat tailed business that understands fat tails very well is publishing

[01:22:29] right like cinema and that's a fat tailed business.

[01:22:35] Not far from my publisher Random House go to the lobby of Random House on Broadway.

[01:22:42] Go to the lobby and walk in.

[01:22:43] The first time I walked in I was not yet published you know I wasn't best selling

[01:22:50] author so someone made me wait you know they make you wait if you're this and otherwise

[01:22:54] you're best selling author then you have special elevator you use to do things.

[01:22:58] So when you wait on the lobby I looked and I said oh my god this building likes publishers

[01:23:03] or publishers like this building because there's nothing but publishing houses guess what turn

[01:23:10] out to be all belong to the same Bertelsman right because when you're a fat tailed business

[01:23:16] you make your income off of few blockbusters you've got to have thousands of books.

[01:23:22] So again so this is 70 80 publishing houses separate publishing houses in the same building

[01:23:30] in the Random House crown the Knopf this that things you've never heard of right and

[01:23:37] when you have a lot and when you're a fat tailed business you need a lot of small trials

[01:23:42] you see making bets on stuff and once in a while you got a Harry Potter.

[01:23:48] Publishers are essentially venture capitalists on books so exactly but now so that's a resilient

[01:23:52] business it's not necessarily anti-fragile.

[01:23:54] No it is anti-fragile they like I mean they're.

[01:23:56] So let's say the book fails sorry if a book fails the cost them $5,000 if they do it right

[01:24:03] all right it's like an option you lose $5,000 if it fails and you make a hundred million

[01:24:08] if it's right.

[01:24:09] Right but if it so they don't mind failures but the failures make them stronger.

[01:24:15] I mean no usually my mapping of anti-fragile isn't so much in something makes you stronger

[01:24:22] so much the system benefits from mistakes.

[01:24:25] So or benefit or benefits from randomness benefits from other things all right yes the

[01:24:30] if you try to publish a book and typically let me tell you how the system benefit from

[01:24:35] mistake you're trying to have a hypertension drug and end up with Viagra same thing they

[01:24:39] try to publish a book on some like they did with the Black Swan they try to publish

[01:24:46] a book on they thought a narrowly defined subject by an option trader okay whom you can

[01:24:54] you know probably rely on having a few and it turned out from an option trading book

[01:24:59] all right into some global interpretation of history that made them you know that's

[01:25:03] old X million well you get the idea so that was a mistake on the part you see right

[01:25:09] that was a positive mistake that was so they can publish a book like Umberto Eco

[01:25:14] they think is a scholarly book and their mistake is that it's usually popular topic that sells

[01:25:20] 50 million copies you see it's pretty much like a drug so you have side effects that

[01:25:25] you didn't predict that but whatever you don't predict that typically helps you and

[01:25:29] that's the idea.

[01:25:30] So the model itself is strong because sometimes these small losses could turn into huge sometimes

[01:25:36] the mistakes could turn into huge.

[01:25:38] Because no mistake will cause it makes your book cost you more than you spent for

[01:25:43] it it's like a finite premium for an option so all the mistakes is the upside but if you

[01:25:47] spend a billion dollars for a book all right and people have spent millions and millions

[01:25:52] on books all right.

[01:25:54] The mistake is when you start spending a lot of money on publishing Al Gore all right

[01:25:58] and the thing flops that you have a big loss you see for no upside that's typically

[01:26:06] when people go for small bets in highly high quality,

[01:26:13] unpredictable domains and in the field that nobody really understands very well you have

[01:26:18] a huge upside.

[01:26:19] Okay and so you can look at the PNL of people who've done that movies, pharma, real estate,

[01:26:27] real estate, real estate if I walked into the black swan when I was writing it thinking

[01:26:34] that most money was made in America by innovation and high tech and stuff like that and turned

[01:26:40] out to be false.

[01:26:43] The big bucks were made in America, big fortunes all right if you look at at a time and look

[01:26:48] at networks of people the big fortunes were made in real estate and then I understood

[01:26:52] why it was a soccer game because real estate is long volatility for the owner of the house

[01:26:58] so you can borrow and short for the bank which explained why the banks never made

[01:27:03] money and individuals made tons of money on real estate and real estate was a good

[01:27:09] business for these people because they have a free option.

[01:27:13] It's funny too like the housing crisis began long before or not the crisis but housing was

[01:27:18] going down for a year and a half before the banks blew up so housing was handling itself

[01:27:24] fine but then the bank the financial crisis happened as a result of that.

[01:27:27] Yeah because the way they package things but typically banks are good at giving people

[01:27:30] free options I remember manufacturers handover went bust because Donald Trump made bad

[01:27:37] bets and eventually Donald Trump got rich all right but my handover became part of

[01:27:43] chemical bank became part of now JP Morgan you see so the mistakes if a mistake can

[01:27:51] blow you up you're not a good business but what's worse is when someone has an

[01:27:56] asymmetry my mistakes will up the bank not me you see or because the way they

[01:28:04] finance it and also and what it did even had they not done that when I looked at the

[01:28:09] risk of Fannie Mae huge even without these packages you know banks were

[01:28:17] overexposed to downside of real estate. So right now in the economy where do

[01:28:21] you see the biggest bubbles or risks or I don't know I mean I make bets all

[01:28:26] right so my bets are out of my bets so it's not a predictive bet I made

[01:28:31] after the crisis I initially made bets on gold and then I was long gold short

[01:28:39] SMP and then ended up long both right and then I ended up getting with my gold and

[01:28:44] why did I have the SMP because I said okay flooding money in a system going to

[01:28:51] either harm the bonds helps the stocks or both so and then I started getting

[01:28:57] short bond on in and out right so I had SMP with a shortage bond position and it

[01:29:03] paid off right so the quantitative easing was some long real estate all right

[01:29:07] that they paid off pay off and then I you know because I said okay the only

[01:29:12] way they're curing the system is by by giving free money so you got what

[01:29:17] people free money will go by so it worked out fine and so tell you because

[01:29:22] I'm only looking at my thing and then I bought some euros right when when

[01:29:28] Europe was because people on TV would go and say oh Europe as if it was a

[01:29:32] catastrophe it was like a Dresden you know the big hole was smoking like

[01:29:36] Syria pictures of Syria today and I then I bought some Europe or about

[01:29:41] European currency because they weren't engaged in the same thing and then I

[01:29:46] got out of it so now I my exposures now I'll say are minimal to anything now so

[01:29:53] so given that it means I don't have a view of anything but I'm trying to get out

[01:29:58] of trouble it's good sometimes is it's I would say anti-fragile sometimes to

[01:30:02] minimize sometimes you want to be in cash my only risk of being in cash is

[01:30:06] you miss on you can have inflation okay or you miss on something so there's

[01:30:12] risk to be in cash the what I call cash I have to cash I have cash cash cash can

[01:30:18] be invested and I have so what I call numeral protect me from inflation which

[01:30:23] is a basket and that basket contains some real estate not much some stocks not

[01:30:29] much some you always have to have something that protects you because

[01:30:33] the big tail risk is I work all my life you know I'm have a good life

[01:30:38] so things can be harmed by inflation all right and or you can have asset price

[01:30:44] inflation but not inflation which what we have now right is which is worse

[01:30:48] actually because you see all the things you wanted by running away from you but

[01:30:51] and then the other things are not so I have some hedge there okay some

[01:30:58] agricultural stuff like that just to say this is hedge for inflation okay but

[01:31:03] I would say I'm monstrously under invested now with the rest okay also I mean to

[01:31:08] the point where you feel bad like you're your heart to the point that I don't

[01:31:13] look at a screen you know that you're under invested if when you can go for

[01:31:17] two days are looking at screen how many hours you can go that looking at a

[01:31:20] stock market screen if I have to formula if I have to look at it

[01:31:26] with high frequency it means I'm over invested okay and then you become

[01:31:32] victim to noise and stop losses if I'm looking at it with like now I could care

[01:31:36] less and if I'm looking at it you know healthily like I would like to be health

[01:31:48] healthy it means good enough frequency then then I'm calibrated but I've

[01:31:56] never really been calibrated been moved you know I typically go from total

[01:32:00] indifference to maximum interest what about like given given your ideas on

[01:32:04] farmer what about you know far big farmer has the risk of FDA regulations but then

[01:32:09] you have like biotechs you know well-funded biotech is a very interesting

[01:32:15] domain biotech particularly that they have they're underestimated by the

[01:32:21] market because I can have a huge discovery that will change everything you

[01:32:25] see small probability that's not part of the data but I'm I'm not much too much

[01:32:33] headaches try to figure out it's just I mean I have a comfortable life I don't

[01:32:36] want to mess it up by having complicated stuff but but sometimes I for

[01:32:41] entertainment I do trades and typically I go with the irrational or

[01:32:46] just range someone who likes the irrational because it seems to me if

[01:32:49] something is irrational it means we hidden reason behind it you see if

[01:32:54] something like for example when I went into Europe Europe was very very very

[01:32:57] very very very very very steady and everybody said it's bad news it's a

[01:33:02] journalist say it's bad news and stock market is not I go to stock market

[01:33:06] you see or I go with the currency I go with all the element but I'm not too

[01:33:12] much in the market at plus of course I have a convex bet on crash on stock

[01:33:16] market so so typically I would say my position would be in the stock market

[01:33:22] the way I do it is I belong to stock market I lose money if there's a 10%

[01:33:27] drawdown but if there's a 20% drawdown I make tons because you buy out of the

[01:33:32] money puts because I'm always has this kind of I don't think I played with

[01:33:37] bonds but now it's difficult with bonds or even though there's most likely

[01:33:41] some sort of bubble in bonds at some point I don't want to miss it I

[01:33:45] don't want to miss it but but to express it with a positive carry is

[01:33:50] hard so sometimes you're gonna I don't want to think about it so you go out too

[01:33:54] complicated yeah but I have enough gold you know in my own thing and I have not

[01:33:59] short bonds in my core you know what I call no matter that I don't have to worry

[01:34:02] much about that so blacks one you saying so sold very well I fold by fold

[01:34:09] with by randomness is a great book as well that I highly recommend every

[01:34:13] trader yeah full by randomness was read by traders but not outside the

[01:34:17] blacks one was right outside trading right a lot and anti-fragile I almost view it

[01:34:23] as a personal improvement book like a way of thinking about life as opposed to

[01:34:27] trading the ones that satisfied me the most in this reaction because it what

[01:34:34] I always tell people is that there is non-linearity you don't want to sell

[01:34:38] a million copies because if you sell a million copies you're gonna have

[01:34:42] 800,000 people reading it buying it who shouldn't be buying it well still

[01:34:46] it's still hard to execute on it people like their fragile lives because that's

[01:34:50] the controlled environment so it's hard for people to say okay I'm gonna fast

[01:34:54] randomly like every other yeah that's true no but anti-fragile is the kind of

[01:34:58] I mean I wrote and if fragile not as as a book for I wrote it as you put your

[01:35:03] soul into a book yeah so it is I it's a force volume of that inserto and I

[01:35:09] put my soul into it but all the answers in the blacks one I also wrote it in

[01:35:14] a way to be less accessible to look to the than the blacks to the common person

[01:35:19] and why voluntarily why because I don't want to have to the readers and I don't

[01:35:27] want to go to conferences where you have all these big names who have best

[01:35:31] sellers and and be one of them like in the meat you know in a cattle market I

[01:35:35] want to just have my own I pulled back from public image you know when you

[01:35:40] have a big best seller you have trauma and you have also you learn from stuff and

[01:35:45] say okay you won't do once you don't want to do it all the time so I did not want

[01:35:49] to have as big and I don't want in the future to have any big I'd rather have a

[01:35:54] steady smart readership than crazy people citing it without understanding

[01:36:02] what it is and and the antifragile in that category it did it's like food

[01:36:07] anamist food by Ramness was almost never bought by people who didn't understand it

[01:36:12] or did get I mean I almost never it was the ratio is very low for full by

[01:36:16] randomness and full by rams over time did I don't know something million

[01:36:21] some copy I mean it's something worldwide it did what I am in a million

[01:36:27] something some some copies so and antifragile you don't think well full

[01:36:31] by no it's fine for us a lot more than than than full by Rannis you

[01:36:35] know at this stages but full by Ram I want antifragile you want books to follow

[01:36:40] the lindy effect I don't care about what they sell today I care about what they

[01:36:45] sell in 10 years you see as your point of yeah that if it's still selling in

[01:36:52] 10 years we'll be selling for another 10 years full by random today's 13 years

[01:36:56] old 14 years old 13 years old sauce this week 14 years old 13 years old and

[01:37:01] it's not a still sales is still in print is still active the blacks one is of

[01:37:07] course is too known as a metaphor that bothers me antifragile is similar to

[01:37:12] full by randomness except that it's a different crowd it's more difficult than

[01:37:17] full by Ram's much more difficult you know but it got me thinking really just

[01:37:21] about every area of my life and what was fragile and what wasn't and not

[01:37:25] only every area currently but every area in the past and how I'm the

[01:37:29] different parts where I made myself antifragile just by instinct what because

[01:37:33] I didn't want to lose anymore that's good now that I'm thinking about it there's

[01:37:36] a test you can do for yourself all right if you've had a little bit of disorder

[01:37:42] and you weren't harmed by it it means you didn't have enough of it if I

[01:37:46] wasn't harmed by it if you weren't harmed by it right you had and it

[01:37:49] weren't harmed by it if you had something bad happened or something

[01:37:52] that weren't harmed by it means you need more of it well no I was

[01:37:55] definitely harmed by it and then I had to overcome yeah we overall if as a

[01:37:59] overall you weren't harmed by something then then you have and let me tell you

[01:38:05] that a lot of people don't understand that something I mentioned just on

[01:38:12] pass on didn't focus too much on antifragile it's post traumatic growth

[01:38:16] that grows come from trauma people talk about post traumatic disorder the

[01:38:22] real thing is post traumatic growth so if you do grow too much let's say from a

[01:38:28] failure that might not be a good thing no no no what I meant is that most

[01:38:32] people think that people get trauma from wars from stuff like that I was a

[01:38:37] victim of war it was horrible right and you know near east or not wars are

[01:38:42] not very pleasant okay but but I think that I benefit from it I personally

[01:38:47] grew from it so had had a psychologist you know just to bill X dollar you know

[01:38:53] hundred dollars an hour would have found the disease you say and a lot of people

[01:38:57] benefit from it and a generation a friend they all did very well personally

[01:39:01] emotionally all kind of stuff so in a way you grow from disorder right the

[01:39:07] the but there's something important you know to when you approach the topic

[01:39:12] like antifragile is something important you don't want to ask too much

[01:39:15] from the topic try to apply it okay but you should be demanding but don't ask too

[01:39:21] much from the topic in other words don't try to apply the topic you know blindly to

[01:39:26] a lot of things but it has enough application in other words if we were

[01:39:34] thinking about it has enough application in other words in biology

[01:39:40] biological system and stressors and ecosystem it has enough application and

[01:39:44] and it's a beginning not an end one thing that pleases me a lot is that telling

[01:39:49] you that I switched life with antifragile you know I tried to you know just do

[01:39:57] enough of the markets for entertainment not other things I'm also

[01:40:01] advisor to my old friends who are continued the business I was in in

[01:40:07] America so so just do enough activities but I wanted to be just now become a

[01:40:12] scholar you know retired into pure scholarship you know you really nine

[01:40:16] nine published papers this week this year a book silent risk yeah so I'm

[01:40:22] going to work there's a technical work and I'm realizing that in a technical

[01:40:26] field I mean they're good disciplines in bad discipline the

[01:40:30] disciplines like political science are totally clueless and the discipline like

[01:40:34] physics and complex system they're monstrously insightful you see and to

[01:40:38] understand that you have to know from the inside and but there is a huge

[01:40:44] appetite for ideas like the ones of antifragile and I don't want it's

[01:40:50] you know this is not no longer a book where belongs to one person it's the

[01:40:54] like you see the development of ideas and you want to be part of it

[01:41:00] filling out even without citing antifragile without mentioning it

[01:41:03] once you see it's sliding into this this mission and now what is that that

[01:41:10] thing is really trying to understand how systems function without so we can

[01:41:20] live in a world in accordance with the way the world is rather than

[01:41:23] the way like it to be distributed system like nature how to handle nature how

[01:41:28] to handle global warming all of these and I'm you know and I'm involved in

[01:41:33] this so I'm very very happy because I started academic career and academic

[01:41:39] doesn't mean teaching it means writing paper researching interacting with

[01:41:42] researchers doing things and so so which is why I don't think I'm gonna

[01:41:48] write books for the general public anymore after antifragile I don't

[01:41:52] think I will I mean you know people may have relapses but I will be

[01:41:57] producing a more scientific stuff that has here and spruce and it's actually so

[01:42:01] much easier to the science where will you release the like silent risk here

[01:42:06] there's a whole free on the web is for free on a web anybody can access it I

[01:42:11] don't feel like giving it to a publisher for now and the good thing

[01:42:17] is that if I find a mistake I'm gonna change it it becomes open source in

[01:42:22] a sense because I change it I change but in other words I change it and

[01:42:26] I learned to write and text so it's formatted the way it is comes right

[01:42:29] right instantly and probably it could be between power cover but but I wanted to

[01:42:35] stabilize you know at the level and stabilize in a sense that I keep

[01:42:40] changing you know I wake up I change introduce the topic and silent risk

[01:42:44] silent risk is really the backup of all my other books with the

[01:42:48] mathematical backing and it's very strange I noticed that there's

[01:42:52] something we're doing with this paper okay I notice this paper we use a lot of

[01:42:56] English all right and then at the end we have math proof theorem this this this

[01:43:01] proof okay so I noticed nobody reads the maths nobody reads the math but if it's

[01:43:06] there you feel comfortable but they feel comfortable with what I'm saying here

[01:43:09] without harassing me what do you mean by this they feel comfortable leave you

[01:43:13] alone I'm doing the same thing with the insert though by giving all this

[01:43:17] mass and I discovered you know and a quote you know quite surprising that

[01:43:22] nobody knew you see nobody knew that it is math for living you know it says it is

[01:43:27] mathematical stuff they must not have read your dynamic hedging or they I mean

[01:43:31] people said oh the blacks one and it's very strange because there's the same

[01:43:36] idea I express in math people take it seriously although it's harder to

[01:43:40] understand or they complain there's dense but it's harder to understand but

[01:43:45] then we express it in words they they they don't take it seriously although it's

[01:43:49] easier to understand so if people but so this is what makes scientific writing

[01:43:54] easy because you don't have any inhibition but how deep you want to go

[01:43:58] nobody's gonna complain that's very strange right that's the other thing

[01:44:02] that makes it also easy it's because when I put a book out I'm afraid of

[01:44:06] being misunderstood and having to explain stuff when you put science

[01:44:10] out it is self-stand in the sense that it's very hard to misunderstand an

[01:44:16] equation you may misunderstand the application stuff if you're outside

[01:44:21] the verbalistic aspect and and and it's quite liberating and also was even

[01:44:25] more interesting is that I know that if I make a mistake it would be caught

[01:44:31] faster because the beauty of mathematics isn't that it helps us get is that

[01:44:36] if someone expressed himself mathematically he gave you a tool right to critique him

[01:44:47] and as it's made it clear I made my statements clear on here so you can see

[01:44:51] very clearly what I'm saying if you find the mistake you can spot it so this is

[01:44:56] why it's more open to investigation for others to say hey you know you made a

[01:45:00] mistake here so silent risk has one part one part is about risk and

[01:45:04] probably and the second part about how systems like this order and how city

[01:45:09] states do better and stuff like that and silent risk part to make it make its

[01:45:13] second volume and and it's very interesting because once I put it

[01:45:17] mathematically there now suddenly a lot of people started reading this

[01:45:20] antifragile and without having the need to go to the mass because they've seen

[01:45:25] the mass they've just glanced at it so a couple of graphs they come back and

[01:45:28] now they they they're interested in antifragile this is why there have

[01:45:31] been no scientific criticism of antifragile that 100% like other people

[01:45:37] the scientists have looked at antifragile from a positive they wouldn't have done

[01:45:41] that had if I didn't supply him with a mathematical backup well I I

[01:45:48] definitely look forward to checking out silent risk and I know you say you

[01:45:52] don't want millions of people to read and understand antifragile but I

[01:45:55] really it's a life-changing book I really think it's a great book oh

[01:45:59] thank you very much thanks a lot it was very pleasant yeah I'm glad you came

[01:46:02] came on the show and I wish I had followed up on my email with you in 2002 I

[01:46:09] think I had coffee with the wrong people so it's they blew up in 2008 or no

[01:46:14] seven eight yeah both times several times okay that's fine alright yeah that

[01:46:20] would not happen to you alright okay all right well thank you very much

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