According to Greek mythology, on a road between the ancient cities of Athens and Eleusis, a
small estate was situated in which travelers were shown a ...
rather sinister kind of hospitality.
In the estate, a man named Damastes lived.
According to the story, he abducted travelers and had them spend the night in a special kind of bed.
Damastes was a perfectionist. The bed had to fit the traveler perfectly.
However, rather than correcting the bed to the traveler, he chopped off the legs of those who were too tall for it, and
stretched those who were too short.
Because of this, he was nicknamed Procrustes, which means "the stretcher".
This is a top 5 takeaway summary of The Bed of Procrustes, written by Nassim Taleb.
When faced with limited knowledge, the unseen and the unknown, we humans try to solve the issue by squeezing
reality into crisp commoditized ideas, models and reductive categories.
This is fitting reality in a Procrustean Bed.
The argument for doing so is often:
"Well, it's better than nothing at all!"
But that's false.
We're better off with no models or categories at all, rather than relying on defect ones, as
the latter gives us a false sense of security.
This book is different than Nassim Taleb's typical work as it consists entirely of aphorisms.
Each aphorism acts as a rule of thumb, which is targeting or countering a Procrustean Bed of sorts.
In this video, I will present the aphorisms that are most relevant for the topics on this channel.
Do you even know what an aphorism is?
Now I will take Nassim Taleb's book and put it into my Procrustean Bed of a top 5 takeaway.
He'll probably hate me for it. Enjoy!
Takeaway number 1: Thoughts on economics and economists
The left holds that because markets are stupid, models should be smart.
The right believes that because models are stupid, markets should be smart.
Alas, it never hit both sides that both markets AND models are very stupid.
Economics cannot digest the idea that the collective and the aggregate are
disproportionately less predictable than individuals.
An economist is a mixture of:
1. A businessman without common sense
2. A physicist without brains and 3. A speculator without balls
Takeaway number 2: Successful investing
The suckers trap is when you focus on what you know, and what others don't know, rather than the reverse.
If something, say, a stock price, looks slightly out of line,
it is out of line. If it looks way out of line, you are wrong in your method of evaluation.
What they call risk, I call opportunity.
But what they call "low-risk opportunity", I call sucker problem.
Takeaway number 3: Choosing your career path
The three most harmful addictions are: heroin, carbohydrates and a monthly salary.
Karl Marx, a visionary, figured out that you can control a slave much better by convincing him he is an employee.
Decomposition, for most, starts when they leave the free, social and
uncorrupted college life, for the solitary confinement of professions and nuclear families.
Takeaway number 4: When trading, never forget that ..
Saying someone is good at making profits, but not good at managing risk, is like saying someone is a great surgeon,
except for cases when the patients die.
The characteristic feature of the loser is to bemoan, in general terms,
mankind's flaws, biases, contradictions and
irrationality, without exploiting them for fun and profit.
When people say "I am investing for the long-term", it means they are losing money.
Takeaway number 5: How to become successful
To figure out how well you will do ten years from now relative to someone else, count your enemies, count his, and square the ratio.
People focus on role models. It is more effective to find anti-models - people
you don't want to resemble when you grow up.
There are two types of people:
Those who try to win, and those who try to win arguments. They are never the same.
Nassim Taleb rights with no-holds-barred.
So if you feel targeted, and perhaps a bit offended by some of these aphorisms,
know that you are not alone.
Taleb hit me right where it hurts with these two:
That was the final part of the Incerto series!
I hope you enjoyed my summaries of Nassim Taleb's landmark series.
The other books in the series are: Fooled by Randomness,
The Black Swan, Antifragile, and Skin in the Game.
If you wanna check them out, I'll link to the playlist in the description.
Cheers guys, I hope to see you again, next time!