Quotes About Probability

It is far easier to figure out if something is fragile than to predict the occurrence of an event that may harm it.

The market is like a large movie theater with a small door.

Black Swans and tail events run the socioeconomic world

Black Swan has three attributes: unpredictability, consequences, retrospective explainability.

In practice, randomness is fundamentally incomplete information.

In general, positive Black Swans take time to show their effect while negative ones happen very quickly—it is much easier and much faster to destroy than to build. (During

We flipped a coin to see who was going to pay for the meal. I lost and paid. He was about to thank me when he abruptly stopped and said that he paid for half of it probabilistically.

probability is principally a branch of applied skepticism

considering that alternative outcomes could have taken place, that the world could have been different, is the core of probabilistic thinking.

Further, being fooled by randomness is that in most circumstances fraught with a high degree of randomness, one cannot really tell if a successful person has skills, or if a person with skills will succeed—but we can pretty much predict the negative, that a person totally devoid of skills will eventually fail.

Our problem is not just that we do not know the future, we do not know much of the past either. We

The problem is that we humans are prone to the availability heuristic, by which the salient is mistaken for the statistical, and the conspicuous and emotional effect of an event makes us think it is occurring more regularly than in reality. This helps us to be prudent and careful in daily life, forcing us to add an extra layer of protection, but

First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact (unlike the bird). Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.

Because the bell curve ignores large deviations, cannot handle them, yet makes us confident that we have tamed uncertainty. Its

it is not so easy to "falsify," i.e., to state that something is wrong with full certainty. Imperfections

Aside from the decorum of ancient thought as opposed to the coarseness of fresh ink, I have spent some time phrasing the idea in the mathematics of evolutionary arguments and conditional probability. For an idea to have survived so long across so many cycles is indicative of its relative fitness. Noise, at least some noise, was filtered out.

people overreact to low-probability outcomes when you discuss the event with them, when you make them aware of it. If

The policies we need to make decisions on should depend far more on the range of possible outcomes than on the expected final number. I

we are effectively not skilled at intuitively gauging the impact of the improbable, such

our misunderstanding of the Black Swan can be largely attributed to our using System 1, i.e., narratives

The payoff of a human venture is, in general, inversely proportional to what it is expected to be.

The answer is that there are two varieties of rare events: a) the narrated Black Swans, those that are present in the current discourse and that you are likely to hear about on television, and b) those nobody talks about, since they escape models—those that you would feel ashamed discussing in public because they do not seem plausible. I

When you look at the past, the past will always be deterministic, since only one single observation took place.

the mental probabilistic map in one's mind is so geared toward sensational that one would realize informational gains by dispensing with the news.