Just finished Nassim Nicholas Taleb’s The Black Swan and found it surprisingly difficult to get through. But have been thinking about it a lot. Some takeaways:
- Reality is lumpy, not linear.
- Theories are too Platonic for their own good.
- Most successes and indeed most events can’t be said to be caused by anything, due to the survivor effect and the role of luck. Free markets work not because they reward hard work, but because they enable lots of tinkering (on a macro, societal level).
- The bell curve is a big fraud. So is any sort of forecasting. So are most post-Keynes economists and financial theorists, particularly those with Nobel prizes, with the exception of Friedrich Hayek and Daniel Kahneman, who’s actually a psychologist.
- What this all means for investing: Put a good majority chunk of your portfolio in the safest assets there are (T-bonds, though I wonder about those now). Take wild risks on the rest.