by Nassim Taleb
5*/10
Key Ideas:
Skin in the game means having personal exposure to the risks and consequences of decisions you make – it is essential for ethical behavior, trust, and accountability.
Avoid systems with no downside risk (e.g., executives who get bonuses even if their companies fail).
Avoid advice from people without skin in the game – academics, consultants, and journalists making predictions without consequences for being wrong.
Other interesting notes:
Systems break down when individuals are shielded from the downside of their actions (e.g., financial bailouts for bankers).
You will never fully convince someone that he is wrong; only reality can.
It took medicine a long time to realize that when a patient shows up with a headache, it is much better to give him aspirin or recommend a good night’s sleep than do brain surgery, although the latter appears to be more “scientific.” But most “consultants” and others paid by the hour are not there yet.
Rationality is avoidance of systemic ruin.
Charlie Munger: “Would you rather be the world’s greatest lover, but have everyone think you’re the world’s worst lover? Or would you rather be the world’s worst lover but have everyone think you’re the world’s greatest lover?”
“What should I do? I want to reduce poverty, save the world,” and similar noble aspirations at the macro-level, Nassim suggests:
- Never engage in virtue signaling;
- Never engage in rent-seeking;
- Put yourself on the line, start a business.
Thoughts on the book:
*Great idea, could be a blog post.
Longer summary/notes: NE
If you like this, you’ll probably like: Black Swan, Antifragile, Fooled by randomness
Leo :) 