re. Black Swan
And what’s interesting is that we are so bad at dealing with Extremistan. We just don’t intuitively get it, even though we are surrounded by examples of it. Finance and wealth. Book publishing (a significant portion of all book sales are Harry Potter books). The music industry. eBay. We live in an Extremistan world, but our intuition (evolved in a simpler time without network effects) is still stuck in Mediocrestan. So we have to beware of our instincts, because they will get the wrong answers. And we have to beware of charlatans using Mediocrestan theories because they are calculable – it’s like physicists treating everything as a simple harmonic oscillator because that’s the only equation they can solve.
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Nassim Nicholas Taleb and Nonlinearity – Eric Nehrlich, Unrepentant Generalistlth, and Bill Gates has approximately 100% of the wealth of the group. This is the world of Extremistan, where outliers can blow up the normal distribution. This is the world of the Black Swan. <span>And what’s interesting is that we are so bad at dealing with Extremistan. We just don’t intuitively get it, even though we are surrounded by examples of it. Finance and wealth. Book publishing (a significant portion of all book sales are Harry Potter books). The music industry. eBay. We live in an Extremistan world, but our intuition (evolved in a simpler time without network effects) is still stuck in Mediocrestan. So we have to beware of our instincts, because they will get the wrong answers. And we have to beware of charlatans using Mediocrestan theories because they are calculable – it’s like physicists treating everything as a simple harmonic oscillator because that’s the only equation they can solve. Another example of Extremistan comes from a completely different source. I’m currently reading Poor Charlie’s Almanack, a book of the wisdom of Charlie Munger, Warren Buffett’s investme Summary
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