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NASSIM TALEB ANTIFRAGILE PDF

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Taleb, Nassim. Antifragile: things that gain from disorder / Nassim Nicholas Taleb. p. cm. Includes bibliographical references and index. ISBN The notions of fragility and antifragility were introduced in Taleb(,). In short, fragility is related to how a system suffers from the variability. Antifragile: Things that Gain from Disorder: Book Review. Nassim NicholasTaleb, Antifragile: Things that Gain from Disorder, New York: Random House, In the book, Antifragile: Things that Gain from Disorder, the author Nassim Nicholas Taleb.


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THE ANTIFRAGILE. Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and. NASSIM NICHOLAS TALEB: TO PREVAIL IN AN UNCERTAIN. WORLD, GET Antifragile: Things That Gain From Disorder, by Taleb, a philosopher and businessman. .. 4 myavr.info Coleman and I. Nassim Nicholas Taleb, Antifragile: Things That Gain from Disorder “Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the.

Those qualities fall somewhere in the middle of a spectrum between fragile and antifragile. Something is antifragile — a term Taleb coined — if it benefits from shocks, stress, disruption, randomness or volatility. Thus, he teaches, people must learn to create systems, habits and practices that survive and benefit from disruption.

It gives a clear explanation of antifragility, a concept you can apply usefully on your own. Taleb casts a wide net. He moves from system to system, identifying common principles in biology, politics, economics and other fields. He provides multimodal ways of accessing and understanding his concepts. These strategies range from the five-page table in the prologue delineating the respective qualities of fragile, robust and antifragile systems to rich examples from mythology, where he explains ideas by telling familiar stories.

Those institutions that have existed the longest are, in all likelihood, those that will continue to exist into the future. As an example, imagine that the year is and answer the following: which structure will last the longest, the Berlin Wall or the Great Pyramid of Giza.

In this test, as in much of the book, Taleb asks too much and too little. He asks too much because those institutions with the most longevity were once upon a time also the ones with the least. There must be a better test than longevity, as it only pushes the problem back in time to identify the source of antifragility. It cannot be turtles all the way down.

An applied example relevant to the present financial crisis would involve looking for those institutions that have been strengthened by current affairs. The crisis has taken its toll on many aspects of the financial services industry, but some general types of products have proven surprising resili… antifragile.

Governments with prudent fiscal policies—e. Investment funds capitalizing on what were once unorthodox strategies, such as gold and other precious metal holdings, have out-performed more traditional investments as the financial crisis worsens. Readers of this journal will also notice that their stock in Austrian economics has increased in value over the past decade.

Question begging and failed policies developed through more mainstream theories have led many former outsiders to the ranks of Austrian economists. An unwanted event caused an offsetting positive outcome in all these scenarios. That is what being antifragile is about. Taleb asks too little in this book by not exploring the true sources of antifragility.

He comes close, alluding in many places that market-based institutions better combat the false security that planned institutions create. Explaining and elaborating on this link would do much to take the fundamental merits of antifragility to the next level. References Berezow, A. Science Left Behind: Philadelphia, PA: Butos, W. Causes and consequences of the climate science boom. The Independent Review Cook, R. Merchants of smear. Heartland Policy Brief September.

Last viewed on October 1, Ferguson, C. The peer- review scam. Little, Brown and Company. Hulme, M. Understanding Controversy, Inaction and Opportunity.

Cambridge University Press. Contradicted and initially stronger effects in highly cited clinical research. Journal of the American Medical Association Ioannidis, J. Why most published research findings are false. PLOS Medicine 2: Scientific inbreeding and same-team replication: Type D personality as an example. Journal of Psychosomatic Research Early extreme contradictory estimates may appear in published research: Journal of Clinical Epidemiology Kabat, G.

Hyping Health Risks: Columbia University Press. Kellow, A. Science and Public Policy: Northampton, MA: Edward Elgar Publishing. Lichter, S. Environmental Cancer — A Political Disease? New Haven, CT: Yale University Press. Montford, A. Hockey Stick Illusion: Climategate and the Corruption of Science.

Gibberish papers. Park, I-U. Modelling the effects of subjective and objective decision making in scientific peer review. Discover October.

Sussman, B. But the best available data show sea-level rise is not accelerating Houston and Dean, Local and regional sea levels continue to exhibit typical natural variability — in some places rising and in others falling. Island coastal flooding results not from sea-level rise, but from spring tides or storm surges in combination with development pressures such as borrow pit digging or groundwater withdrawal.

Persons emigrating from the islands are doing so for social and economic reasons rather than in response to environmental threat. Another claim concerning the effect of climate change on oceans is that increases in freshwater runoff into the oceans will disrupt the global thermohaline circulation system.

But the range of natural fluctuation in the global ocean circulation system has yet to be fully delineated Srokosz et al. Global Warming Scam. Worldnet Daily. They are growing more and more confident at predicting when volcanoes will erupt in the short-term.

If a volcano was going to erupt in one hour they'd have a good idea it was going to happen. If it was going to blow in a week they'd be less sure, and in six months even less so. The further a volcano is from erupting, the harder it is to predict. Working out if a volcano will erupt in future years is still impossible. Dazed survivors, covered in ash and some with blood, trudged through their destroyed neighborhoods.

Many were shocked and sobbing, wondering what happened to their loved ones.

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Randomness and Our Brain: We Are Probability Blind On the difficulty of thinking of your vacation as a linear combination of Paris and the Bahamas. Nero Tulip may never ski in the Alps again. Some discussion of behavioral discoveries. Some manifestations of probability blindness taken out of a textbook.

A little more on journalistic pollution. Why you may be dead by now. Paris or the Bahamas? You have two options for your next brief vacation in March. The first is to fly to Paris; the second is to go to the Caribbean. You expressed indifference between the two options; your spouse will tip the decision one way or the other. Two distinct and separate images come to you when you think of the possibilities.

You are carrying an umbrella under your arm. In the second image, you are lying on a towel with a stack of books by your favorite authors next to you Tom Clancy and Amianus Marcellinus , and an obsequious waiter serving you a banana daiquiri. You derive great pleasure thinking about your vacation; it motivates you and makes your daily commute more bearable.

Can your brain handle that? How desirable would it be to have your feet in the Caribbean waters and your head exposed to the Parisian rain? Our brain can properly handle one and only one state at once - unless you have personality troubles of a deeply pathological nature. Any luck? In purely mathematical terms, the fair value of a bet is the linear combination of the states, here called the mathematical expectation, i.

We can conjure up one and only one state at a given time. Left to our own devices, we are likely to bet in an irrational way, as one of the states would dominate the picture. Some Architectural Considerations Time to reveal Nero's secret. It was a black swan. He was then Although pre-war buildings in New York can have a pleasant front, their architecture seen from the back offers a stark contrast by being completely bland.

He will always remember the view of the ugly pink backyard from the leaden window panes, and the medical diploma on the wall that he read a dozen times as he was waiting for the doctor to come into the room half an eternity, for Nero suspected that something was wrong.

The news was then delivered grave voice , "I have some I got the pathology report It is not as bad as it sounds It's cancer".

The declaration caused his body to be hit by an electric discharge, running through his back down to his knees. Nero tried to yell "what? What scared him was not so much the news as the sight of the doctor. Somehow the news reached his body before his mind. There was too much fear in the doctor's eyes and Nero immediately suspected that the news was even worse than what he was being told it was.

UNDERSTANDING IS A POOR SUBSTITUTE FOR CONVEXITY (ANTIFRAGILITY)

It meant that 72 people out of a hundred make it. It takes between three and five years for the body without clinical manifestations of the disease for the patient to be pronounced cured closer to three at his age. He then felt in his guts quite certain that he was going to make it. Clearly, there is none, but we are not made for mathematics.

From Psychology to Neurobiology For reasons we just saw, the laws of probability are said to be counterintuitive by the researchers in the cognitive and behavioral sciences. We are probability blind, these scientists say. This chapter will rapidly illustrate some manifestations of such blindness, with a cursory exposition of the research in that area.

It is filling out library shelves and causing the creation of numerous investment funds dedicated to the sister idea that people do not behave in a rational way in the markets. Some funds have been built around the idea that people overreact to news, while others have been devoted to the notion that, to the contrary, people underreact I was told early in my career that the more diversity the better for the market. These beliefs give rise to two categories of trading strategies.

On one side we find the contrarians who subscribe to the following rationale: Hey, since people systematically overreact, let us take the other side, sell the winners and buy the losers. On the other side stand the momentum players who do the exact opposite: Since markets do not adjust fast enough, let us buy the winners and sell the losers. Because of randomness, both categories will show periodic victories, which cannot prove directly that either theory is right or wrong.

Even psychiatrists and clinical psychologists are joining the fray by becoming "experts" - after all they know more about the human mind that those financial economists with their unrealistic, unscientific equations, and it is, after all, human behavior that ultimately influences the markets. A yearly conference in Boston gathers medical doctors and psychology researchers musing over market strategies. The idea may seem simple, perhaps even boring until we encounter professionals, whom we expect would deal with the matter with maximal expertise, falling right into the trap like the man on the street.

Our natural habitat I will not delve too deeply into amateur evolutionary theory to probe at the reasons besides, in spite of having spent some time in libraries I feel that I am truly an amateur in the subject matter.

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Clearly, the environment for which we have built our genetic endowment is not the one that prevails today. I have not told too many of my colleagues that their decision-making contains some lingering habits of cavemen - but when markets experience an abrupt move, I experience the same rush of adrenaline as if a leopard was seen prowling near my trading desk. Some of my colleagues who break telephone handles upon losing money might be even closer in their psychological makeup to our common origin.

What used to strike me as a child upon visiting museums is that ancient Greek statues exhibit men with traits indistinguishable from ours only more harmonious and aristocratic. I was so wrong to believe that 2, years was a long time. Proust wrote frequently about the surprise people have while coming across emotions in Homeric heroes that are similar to those we experience today. By genetic standards, these Homeric heroes of 30 centuries ago in all likelihood have the exact identical genetic makeup as the pudgy middle- aged man you see schlepping groceries in the parking lot.

More than that. In fact we are truly identical to the man who perhaps 80 centuries ago started being called "civilized", in that strip of land stretching from Southeastern Syria to Southwestern Mesopotamia.

What is our natural habitat? By natural habitat, I mean the environment in which we reproduced the most, the one in which we spent the highest number of generations. The consensus among anthropologists is that we have been around as a separate species for , years, most of which were spent in the African savannah.

But we do not have to go back that far in history to get the point. Imagine life in an early urban settlement, in Middle-Town, Fertile Crescent, only about 3 , 0 0 0 years ago - surely modern times from a genetic standpoint.

Information is limited by the physical means of its transmission; one cannot travel fast, hence information will come from faraway places in concise batches. Traveling is a nuisance fraught with all manner of physical danger; you will settle within a narrow radius of where you were born unless famine or some invading uncivilized tribe dislodges you and your relatives from your happy settlement.

The number of people you would get to know in a lifetime will be small. Should a crime be committed, it will be easy to gauge the evidence of guilt within the small number of possible suspects. If you are unjustly convicted of a crime, you will argue in simple terms, propounding simple evidence like "I was not there as I was praying in the temple of Baal and was seen at dusk by the high priest" and add that Obedshemesh son of Sahar was more likely to be guilty because he had more to gain from the crime.

Your life would be simple, hence your space of probabilities would be narrow. The real problem is, as I have mentioned, that such a natural habitat does not include much information.

An efficient computation of the odds was never necessary until very recently. Popular belief holds that the religious backdrop of the first and second millennium blocked the growth of tools that hint at absence of determinism, and caused the delays in probability research. The idea is extremely dubious; we simply did not compute probabilities because we did not dare to? Surely the reason is rather because we did not need to.

Much of our problem comes from the fact that we have evolved out of such a habitat faster, much faster than our genes. Even worse; our genes have not changed at all. Kafka in a courtroom The O. Simpson trial provides an example of how our modern society is ruled by probability because of the explosion in information , while important decisions are made without the smallest regard for its basic laws.

We are capable of sending a spacecraft to Mars, but we are incapable of having criminal trials managed by the basic laws of probability - yet evidence is clearly a probabilistic notion. I remember buying a book on probability at a Borders Books chain bookstore only a short distance from the Los Angeles courthouse where the "trial of the century" was taking place - another book that crystallized the highly sophisticated quantitative knowledge in the field.

How could such a leap in knowledge elude lawyers and jurors only a few miles away?

People who are as close to being criminal as probability laws can allow us to infer that is with a confidence that exceeds the shadow of a doubt are walking free because of our misunderstanding of basic concepts of the odds. You could be convicted for a crime you never committed owing to a poor reading of probability - for we still cannot have a court of law properly compute the joint probability of events the probability of two events taking place at the same time.

I was in a dealing room with a TV set turned on when I saw one of the lawyers arguing that there were at least four people in Los Angeles capable of carrying O. Simpson's DNA characteristics thus ignoring the joint set of events - we will see how in the next paragraph. I then switched off the television set in disgust, causing an uproar among the traders. I was under the impression until then that sophistry had been eliminated from legal cases thanks to the high standards of republican Rome.

Isn't the law devoted to the truth? How can we expect the untrained person to understand randomness when a Harvard professor who deals and teaches the concept of probabilistic evidence can make such an incorrect statement? More particularly, where jurors and lawyers tend to make mistakes, along with the rest of us, is in the notion of joint probability.

They do not realize that evidence compounds. Arguing that O. I can surprise people by saying that the probability of the joint event is lower than either. Behavioral economists submitted rational and educated people graduate students to tests where they needed to produce the probability of a young woman with a liberal arts education being a bank teller or a feminist bank teller.

They assigned on average a higher probability to her being a feminist bank teller than to that of her being a bank teller. I am glad to be a trader taking advantage of people's biases but I am scared of living in such a society. It spawned an entire literature of the absurd; the world may be too incongruous for us. I am terrified of certain lawyers. After listening to statements during the O. We said that mere judgment would probably suffice in a primitive society. It is easy for a society to live without mathematics - or traders to trade without quantitative methods - when the space of possible out- comes is one dimensional.

One dimensional means that we are looking at one sole variable, not a collection of separate events. The price of one security is one dimensional, whereas the collection of the prices of several securities is multidimensional and requires mathematical modeling - we cannot easily see the collection of possible outcomes of the portfolio with a naked eye, and cannot even represent it on a graph as our physical world has been limited to visual representation in three dimensions only.

We will argue later why we run the risk of having bad models admittedly, we have or making the error of condoning ignorance - swinging between the Carybde of the lawyer who knows no math to the Scylla of the mathematician who misuses his math because he does not have the judgment to select the right model. In other words, we will have to swing between the mistake of listening to the glib nonsense of a lawyer who refuses science and that of applying the flawed theories of some economist who takes his science too seriously.

The beauty of science is that it makes an allowance for both error types. Luckily, there is a middle road - but sadly, it is rarely traveled. Kahneman and tversky Who are the most influential economists of the century, in terms of journal references, their followings, and their influence over the profession?

They are Daniel Kahneman and Amos Tversky, psychology researchers whose specialty was to uncover areas where human beings are not endowed with rational thinking and optimal economic behavior.

Their research, conducted on a population of students and professors in the early s, showed that we do not correctly understand contingencies. Furthermore, they showed that in the rare cases when we understand probability, we do not seem to consider it in our behavior. Since the Kahneman and Tversky results, an entire discipline called behavioral finance and economics has flourished. It is in open contradiction with the orthodox so-called neoclassical economics taught in business schools under the normative names of efficient markets, rational expectations, and other such concepts.

It is worth stopping, at this juncture, and discussing the distinction between normative and positive sciences. A normative science clearly a self- contradictory concept offers prescriptive teachings; it studies how things should be. Some economists, for example, those of the efficient market religion believe that humans are rational and act rationally because it is the best thing for them to do it is mathematically "optimal".

The opposite is a positive science, which is based on how people actually are observed to behave. In spite of econQmists' envy of physicists, physics is an inherently positive science while economics, particularly microeconomics and financial economics, is predominantly a normative one. Neurobiology The soft sciences of psychology and economics have cheated us on occasions in the past.

Economics has produced laughable ideas, ideas that evaporate once one changes the assumptions a little bit. It seems difficult to take sides with bickering economists trading often- incomprehensible arguments even to economists. Biology and medicine, on the other hand, rank higher in scientific firmness; like true sciences, they can explain things while at the same time being subjected to falsification.

They are both positive and their theories are better theories, that is, more easily testable. The good news is that neurologists are starting to confirm these results, with what is called environment mapping in the brain, by taking a patient whose brain is damaged in one single spot say, by a tumor or an injury deemed to be local and deducing by elimination the function performed by such part of the aniatomy.

This isolates the parts of the brain that perform the various functions. The Kahneman and Tversky results thus found a terra firma with the leaps in our knowledge obtained through behavioral genetics and, farther, plain medicine.

Some of the physiology of our brain makes us perceive things and behave in a given manner. We are, whether we like it or not, prisoners of our biology. We have not had the incentive to develop an ability to understand probability because we did not have to do so - but the more profound reason is that we are not designed to understand things. We are built only to survive and procreate. To survive, we need to overstate some probabilities, such as those that can affect our survival.

For instance, those whose brain imparted higher odds to dangers of death, in other words the paranoid, ssuch paranoia did not come at too high a cost, otherwise it would have been a drawback. Our brain has been wired with biases that may hamper us in a more complex environment, one that requires a more accurate assessment of probabilities. The story of these biases is thus being corroborated by the various disciplines; the magnitude of the perceptional distortions makes us less than rational, in the sense of both having coherent beliefs i.

Examples of biases in understanding probability I found in the behavioral literature at least 40 damning examples of such acute biases. Below is the account of a well-known test, and an embar- rassing one for the medical profession.

The following quiz was given to medical doctors which I borrowed from the excellent Deborah Bennett's Randomness. People are tested at random, regardless of whether they are suspected of having the disease. A patient's test is positive. Less than one in five professionals got it right.

Antifragile: Summary + PDF

I will simplify the answer. Assume no false negatives. Consider that out of 1, patients who are administered the test, one will be expected to be afflicted with the disease.

We are option blind As an option trader, I have noticed that people tend to undervalue options as they are usually unable to correctly mentally evaluate instru- ments that deliver an uncertain payoff, even when they are fully con- scious of the mathematics.

Even regulators reinforce such ignorance by explaining to people that options are a decaying or wasting asset. Options that are out of the money are deemed to decay, by losing their premium between two dates. I will clarify next with a simplified but sufficient explanation of what an option means. This is dubbed a call option. But this does not have a very high probability.

It is called out-of-the-money, for I have no gain from exercising it right away. Most people think 0. That is not true. Even professionals can be fooled. They mentally overweigh the state that is the most likely, namely, that the market does not move at all. The option is simply the weighted average of the possible states the asset can take. There is another type of satisfaction provided by the option seller.

It is the steady return and the steady feeling of reward - what psychologists call flow. It is very pleasant to go to work in the morning with the expectation of being up some small money. It requires some strength of character to accept the expectation of bleeding a little, losing pennies on a steady basis even if the strategy is bound to be profitable over longer periods.

I noticed that very few option traders can maintain what I call a "long volatility" position, namely a position that will most likely lose a small quantity of money at expiration, but is expected to make money in the long run because of occasional spurts. I divide the community of option traders into two categories: Premium sellers also called option sellers sell options, and generally make steady money, like John in Chapters 1 and 5.

Premium buyers do the reverse. Option sellers, it is said, eat like chickens and go to the bathroom like elephants. Alas, most option traders I encountered in my career are premium sellers - when they blow up it is generally other people's money. How could professionals seemingly aware of the simple mathematics be put in such a position? Our understanding of math can remain quite superficial; medicine is starting to believe that our actions are not quite guided by the parts of our brain that dictate rationality see Antonio WDamasio's Descartes' Error or Ledoux's with our emotions and there is no way around it.

For the same reason, people who are otherwise rational engage in smoking or in fights that get them no immediate benefits, likewise people sell options even when they know that it is not a good thing to do.

Who Should Read “Antifragile? And Why?

But things can get worse. These go back and cheat with the statistics to justify their actions. In my business, they fool themselves with statistical arguments to justify their option selling.

Probabilities and the Media More Journalists A journalist is trained in methods to express himself rather than to plumb the depth of things - the selection process favors the most communicative, not necessarily the most knowledgeable.

My medical doctor friends claim that many medical journalists do not understand anything about medicine and biology, often making mistakes of a very basic nature.

I cannot confirm such statements, being myself a mere amateur though at times a voracious reader in medical research but I have noticed that they almost always misunderstand the probabilities used in medical research announcements. The most common one concerns the interpretation of evidence. They most commonly get mixed up between absence of evidence and evidence of absence, a similar problem to the one we saw in Chapter 9. Say I test some chemotherapy, say Fluorouracil for upper respiratory tract cancer, and find that it is better than a placebo, but only marginally so; that in addition to other modalities it improves survival from 21 per to 24 per I would write a paper outlining my results and saying that there is no evidence of improved survival as yet from such medicine, and that further research would be needed.

A medical journalist would pick it up and claim that one Professor N. Taleb found evidence that Fluorouracil does not help, which is entirely opposite to my intentions. Some naive doctor in Smalltown, even more uncomfortable with probabilities than the most untrained journalist, would pick it up and build a mental block against the medication, even when some researcher finally finds fresh evidence that such medicine confers a clear survival advantage.

CNBC at lunch time The advent of the financial television channel CNBC presented plenty of benefits to the financial community but it also allowed a collection of extrovert practitioners long on theories to voice them in a few minutes of television time.

One often sees respectable people making ludicrous but smart-sounding statements about properties of the stock market. Among these are statements that blatantly violate the laws of probability.

One must consider that the stocks did not all reach their highs at the same time. By a law of probability called distribution of the maximum of random variables, the maximum of an average is necessarily less volatile than the average maximum. You should be dead by now This brings to mind another common violation of probability by prime- time T.

For instance, a fallacy that I saw commonly made by a prominent T. Therefore if you are 68 you can expect to live five more years, and should plan accordingly". She went into precise prescriptions of how the person should invest for a five more years horizon.

Now what if you are 80? Is your life expectancy minus seven years? What these journalists confuse is the unconditional and conditional life expectancy.

At birth, your unconditional life expectancy may be 73 years. But as you advance in age and do not die, your life expectancy increases along with your life. Because the other people by dying have taken your spot in the statistics, for expectation means average. So if you are 73 and are in good health, you may still have, say, nine years in expectation. But the expectation would change, and at 82, you will have another five years, provided of course you are still alive.

Even someone years old still has a positive conditional life expectation. Such a statement, when one thinks about it, is not too different from the one that says: This is quite harmless. What is far more worrying is the supply of information by non- professionals to professionals; it is to the journalists that we turn next.

The bloomberg explanations I have, on my desk, a machine eponymously called a BloombergTM after the legendary founder Michael Bloomberg. It acts as a safe e-mail service, a news service, a historical data retrieving tool, a charting system, an invaluable analytical aid and, not least, a screen where I can see the price qf securities and currencies. I have gotten so addicted to it that I cannot operate without it, as I would otherwise feel cut off from the rest of the world.

I use it to get in contact with my friends, confirm appointments, and solve some of those entertaining quarrels that put some sharpness into life. Somehow, traders who do not have a Bloomberg address do not exist for us they have to have recourse to the more plebeian internet.

But there is one aspect of Bloomberg I would. Because they engage in explaining things and perpetuate the right-column, left-column confusion in a serious manner. Bloomberg is not the sole perpetrator; it is just that I have not been exposed to newspapers' business sections over the past decade, preferring to read real prose instead.

As I am writing these lines I see the following headlines on my Bloomberg: If I translate it well, the journalist claims to provide an explanation for something that amounts to perfect noise.

A move of 1. Such a move does not warrant an explanation. There is nothing there that an honest person can try to explain; there are no reasons to adduce. But like apprentice professors of comparative literature, journalists being paid to provide explanations will gladly and readily provide them. The only solution is for Michael Bloomberg to stop paying his journalists for providing commentary. Take a simple analogy. If you engage in a mountain bicycle race with a friend across Siberia and, a month later, beat him by one single second, you clearly cannot quite boast that you are faster than him.

You might have been helped by something,,or it can be just plain randomness, nothing else. That second is not in itself significant enough for someone to draw conclusions. I would not write in my pre-bed-time diary: The reason I am making this inference is because he beat him by 1. Should the difference be one week, then I could start analyzing whether tofu is the reason, or if there are other factors. Post hoc ergo propter hoc it is the reason because it came after.

Causality can be very complex. It is very difficult to isolate a single cause when there are plenty around. This is called multivariate analysis. For instance, if the stock market can react to U. I can understand why Hume was extremely obsessed with causality and could not accept such inference anywhere. I have a trick to know if something real in the world is taking place.

I have set up my Bloomberg monitor to display the price and percentage change of all relevant prices in the world: The trick is to look only at the large percentage changes. Unless something moves by more than its usual daily percentage change, the event is deemed to be noise. Percentage moves are the size of the headlines. The headline of the Dow moving by 1. People might ask me: The answer is that too many people read explanations. We cannot instinctively understand the nonlinear aspect of probability.

Filtering methods Engineers use methods to clean up the noise from the signal in the data. Did it ever occur to you while talking to your cousin in Australia or the South Pole that the static on the telephone line could be distinguished from the voice of your correspondent? The method is to consider that when a change in amplitude is small, it is more likely to result from noise - with its likelihood of being a signal increasing exponentially as Figure Figure We do not understand confidence levels Professionals forget the following reality.

It is not the estimate or the forecast that matters so much as the degree of confidence with the opinion. Consider that you are going on a trip one fall morning and need to formulate an idea about the weather conditions prior to packing your luggage.

If you expect the temperature to be 60 degrees, plus or minus 10 degrees say in Arizona , then you would take no snow clothes and no portable electric fan. Now what if you were going to Chicago, where you are told that the weather, while being 60 degrees, will nevertheless vary by about 30 degrees? You would have to pack winter and summer clothes. Here the expectation of the temperature carries little importance concerning the choice of clothing; it is the variance that matters.

Your decision to pack is markedly different now that you are told that the variability would be around 30 degrees. What would you pack? We can see that my activity in the market depends far less on where I think the market is going so much as it does on the degree of error I allow around such a confidence level.

An admission We close this chapter with the following information: I consider myself as prone to foolishness as anyone I know, in spite of my profession and the time spent building my expertise on the subject.

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But here is the exception; I know that I am very, very weak on that score. My humanity will try to foil me; I have to stay on my guard. I was born to be fooled by randomness. That will be explored in Part III. Thanks to our detections of false patterns, along with real ones, what is random will appear less random and more certain—our overactive brains are more likely to impose the wrong, simplistic, narrative than no narrative at all.

MO quan- tifying this effect by two characteristic temperatures, secondly, the explanation of Ramanathan et al. Both explanations are related to the global scale.

In addition, we debate the meaning of climate, climate change, climate variability and climate variation to outline in which way the atmospheric greenhouse effect might be responsible for climate change and climate variability, respectively.

In doing so, we distinguish between two different branches of climatology, namely 1 physical climatology in which the boundary conditions of the Earth-atmosphere system play the dominant role and 2 statistical climatology that is dealing with the statistical description of fortuitous weather events which had been happening in climate periods; each of them usually comprises 30 years.

Based on our findings, we argue that 1 the so-called atmospheric greenhouse effect cannot be proved by the statistical description of fortuitous weather events that took place in a climate period, 2 the description by AMS and W?

MO has to be discarded because of physical reasons, 3 energy-flux budgets for the Earth-atmosphere system do not provide tangible evidence that the atmospheric greenhouse effect does exist. Because of this lack of tangible evidence it is time to acknowledge that the atmospheric greenhouse effect and especially its climatic impact are based on meritless conjectures.The pressure is the weight of the atmosphere, he added.

Popper then slipped out of my mind without hanging on a single brain cell - there was nothing in the baggage of a boy without experience to let it stick. Somehow, traders who do not have a Bloomberg address do not exist for us they have to have recourse to the more plebeian internet. It has significant effects on modern society. Every forest is in danger of being burned down. When we do physical exercises, for example, we are experiencing antifragility because we are exposing our body to abnormal forces, so that it strengthens and grows our muscles.

There must be a better test than longevity, as it only pushes the problem back in time to identify the source of antifragility. My question is, does the alarmist hypothesis of human global warming now called "climate change" and not falsifiable ala Karl Popper mean alarmists are no more than climate astrologers?

Without the inconsistency, there is no antifragility, and the problems are no longer visible, hiding under a false tranquility.

What would you pack?

TOWANDA from Michigan
Also read my other articles. I have a variety of hobbies, like tumbling. I do enjoy exploring ePub and PDF books hopelessly .