Quotes About Probability

Nassim Nicholas Taleb

that a casino was precisely the venue not to pick for such a discussion

One vicious attribute is that the longer these animals can go without encountering the rare event, the more vulnerable they will be to it.

these "computable" risks are largely absent from real life!

What do they seem to have in common?

that the world is less random than it actually is.

The occurrence of a highly improbable event is the equivalent of the nonoccurrence of a highly probable one

The central point: had Stiglitz been a businessman with his own money on the line, he would have blown up, terminated. Or had he been in nature, his genes would have been made extinct—so people with such misunderstanding of probability would eventually disappear from our DNA. What I found nauseating was the government hiring one of his coauthors.

what you see is likely to be less Black Swannish than what you do not see.

just as we tend to underestimate the role of luck in life in general, we tend to overestimate it in games of chance.

the total losses for the ten banks would be close to nothing.

Remember that for an event to be a Black Swan, it does not just have to be rare, or just wild; it has to be unexpected, has to lie outside our tunnel of possibilities. You must be a sucker for it.

while the bulk of their risks came from outside their models.

Black Swan is a sucker's problem. In other words, it occurs relative to your expectation

I am not saying that Warren Buffett is not skilled; only that a large population of random investors will almost necessarily produce someone with his track records just by luck.

While a ten-year survival rate for a trader is in the single digits, that of a risk manager is close to 100%).

we have a tendency to underestimate the role of randomness in human affairs

I engage in a gambling strategy that has 999 chances in 1,000 of making $ 1 (event A) and 1 chance in 1,000 of losing $ 10,000 (event B), as in Table 6.1. My expectation is a loss of close to $ 9 (obtained by multiplying the probabilities by the corresponding outcomes).

Political and economic "tail events" are unpredictable, and their probabilities are not scientifically measurable. No matter how many dollars are spent on research, predicting revolutions is not the same as counting cards; humans will never be able to turn politics and economics into the tractable randomness of blackjack.

This dovetails into the "barbell" strategy of taking maximum exposure to the positive Black Swans while remaining paranoid about the negative ones.

Nassim Nicholas Taleb

El hecho de añadir a causa de hace que el hecho parezca más verosímil, y mucho más probable. El cáncer producido por el tabaco parece más probable que el cáncer sin una causa determinada; una causa indeterminada significa la inexistencia de una causa.

law of iterated expectations, which I outline here in its strong form: if I expect to expect something at some date in the future, then I already expect that something at present.

The larger the role of the Black Swan, the harder it will be for us to predict.