[15 min read]
Dear Reader,
Did you know that, in general, modern day society to a great extent has been designed or manipulated to make many people and things weak, delicate, and lack substance or force (fragile)?
The result is that you are, in all likelihood, being set up to lose – or breakdown – when situations occur that are volatile, random, chaotic, stressful, risky, and uncertain. This is a huge problem because, in the long run, almost everything that is hurt by randomness, volatility, and uncertainty will not survive, whilst the things that gain from them come to dominate the world.
As a simple solution, I strongly recommend that you read the book ‘Anti-Fragile‘ written by Nassim Nicholas Taleb, because this text will teach you how to become better (antifragile). In other words, you will learn how to domesticate, dominate, and conquer; the unseen, the unclear, uncertainty, chaos, randomness – and use them to advance and become larger – in order to effectively protect yourself against the weakening affect of social norms, and increase your chances of achieving self-mastery.
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Who is Nassim Nicholas Taleb?
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Reading intensely since the age of 13, undoubtedly, Nassim is qualified to teach you about how to deal with uncertainty, randomness, volatility, and chaos.
Spending most his adult life (approximately 20 years) identifying things that love and hate explosive changes, confusion, disorganisation, and the unpredictable; the writer became an extra-ordinary businessman-trader, a university professor, and researcher. Such that, as an adviser to the hedge-fund ‘Universa Investments LP,’ in 2015, the firm made $1 Billion in profits when the volatility index (VIX) hit its highest level in 4 years, causing havoc in the financial markets.
Despite initially focusing on finance, he then expanded his study to the broader idea of decision making under uncertainty across different subject areas from dinner party plans to medicine.
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What is Antifragile?
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The writer informs us that:
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- He made up the term ‘antifragile‘ to mean the exact opposite of the word ‘fragile.’
. - If to be fragile means to be easily broken, shattered, or lacking in substance like a wine glass then many people mistakenly believe that to be antifragile is to be strong, solid, resilient or robust like a brick. However, the true meaning of antifragility is to be more like something that gets better and stronger the greater it is battered, shaken, or shocked. This would be like a wine glass that becomes stronger and more useful each time it is dropped or thrown against a wall!
‘Antifragility is beyond resilience and robustness….The resilient resists shocks and stays the same; the antifragile gets better (p. 3).’
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- The antifragile (whether a person or thing) loves randomness and uncertainty and is, arguably, behind everything that has changed for the better over time such as evolutions, culture, ideas, revolutions, political systems, technological innovation, economic success, corporate survival, good recipes, bacterial resistance, and so on.
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How to become Antifragile!
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The writer encourages us to use the diagram below (the Triad) to determine the position of any subject or issue (including ourselves), in order to decide what may need to be done to make things better (antifragile):
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(1) FRAGILE – Requires stability and order
(2) ROBUST – No preference for order or disorder
(3) ANTIFRAGILE – Seeks and grows from disorder and volatility
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In relation to the Triad (above), we are told that
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- Anything that matters can be separated into the three different categories above
. - The movement from fragile to antifragility involves different degrees on a spectrum.
. - If things are fragile, then mistakes will be rare, large, and irreversible when they arise (i.e. like the global financial crisis in 2007) – whereas, if they are antifragile, then mistakes are small, reversible, and quickly overcome (i.e. the trial and error development of many successful startups and small businesses).
. - The antifragility of a thing, or person, may alter depending on the situation. A boxer, for example, may be extremely robust, improving from fight to fight – whilst also being emotionally fragile, breaking into tears when dumped by a girlfriend.
. - Things will be antifragile up to a certain level of stress – and antifragility will not be beneficial in all circumstances or situations.
In addition, to become antifragile, we are instructed to
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1. Forget about trying to predict, calculate future possibilities, or measure risk – as these things are not accurately measurable. Instead, we must focus on establishing if something is fragile. In light of this approach, the first step to antifragility is to reduce our potential losses (downside risk) to uncertain events.
2. Use a simple test of asymmetry to detect antifragility: anything that has more upside (profit potential) than downside (possible losses) from random events, or shocks, is antifragile – whilst the reverse will be true for anything that is easily breakable and weak.
3. Prefer being dumb and antifragile, rather than being extremely intelligent whilst weak and easily breakable. As a result, we must be able to do things without fully understanding them, and to do these things extremely well.
4. Pursue innovation or technological progress by tinkering, trial and error, and aggressive risk bearing, rather than relying primarily upon a highly structured formal education.
5. Avoid becoming a ‘fragilista‘ – a person who overestimates the importance of scientific knowledge – tending to make the mistake that if something is unknown, then that means it does not exist. An individual who engages in artificial actions and policies that bring small and visible benefits, but with potentially severe and invisible consequences (more downside than upside).
6. Love and welcome the disorder family in order to be able to mutate and become larger:
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‘(i) Uncertainty
(ii) Variability
(iii) Imperfect
(iiii) Imperfect incomplete knowledge
(iv) Chaos
(vi) Volatility
(vii) Disorder
(viii) Entropy
(ix) Time [the more time, the more events, the more disorder]
(x) Unknown
(xi) Randomness
(xii) Turmoil
(xiii) Stressor
(xiv) Error
(xv) Dispersion of Outcomes
(xvi) Unknowledge‘ (p. 13).
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The downside of Anti-Fragile
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Anti-Fragile is written in a scholarly and serious style, injected with humour such as the title of chapter 13: Lecturing Birds on How to Fly. This is because the writer continuously uses his wittiness to criticise and attack – what he considers to be – the nonsensical behaviour of many highly educated people (fragilistas).
As seven short books compiled within one (transcending numerous subjects), written at three different levels (literary and philosophical – appendix with graphs and technical discussions – backup material with elaborate arguments in technical papers and notes), with the use of a large vocabulary… Anti-fragile is a difficult read, containing a nine sided content page alone.
In spite of this, the many heading and sub-headings within the text, alongside the index, make its a very easy source to skim read, and quickly find relevant information.
Furthermore, the book does exactly what the writer set out to achieve…
As well as showing the reader with precision how to become antifragile, it provides a critical breakdown and analysis of society that is simply first class. A clear by-product of the Nassim’s authenticity, deep intelligence, courage, experience, and life time commitment to exploring this subject:
‘I eat my own cooking. I have only written, in every line I have composed in my professional life, about the things I have done, and the risks I have recommended that others take or avoid…. I will be the first to be hurt if I am wrong (p. 14).’
The result is that Anti-Fragile will be extremely rewarding for all those who make the time to actively read and complete this text.
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Accelerated Strategic Intelligence Course
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As part of the strategic intelligence program, at a minimum, please read Anti-Fragile in conjunction with the following books:
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Getting Things Done:
If you intend to embrace and utilise uncertainty, disorder, and so on – and execute on this type of knowledge consistently – then I advise you to carry out the practice of weekly planning. For further details on how to develop a weekly planning process or system, please click on the following link:
http://involgize.com/%e2%80%9cit%e2%80%99s-crucial-that-you-learn-how-to-be-relaxed-100-organised-to-achieve-your-full-potential%e2%80%9d/
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The 80/20 Principle:
The 80/20 Principle will provide you with substantial and powerful information concerning the inbuilt imbalances in life between inputs and outputs, effort and reward, or causes and results. The consequence is that by applying the principle you are highly likely to start improving your effectiveness, happiness, and achievements instantly using less time and effort. Even though Anti-Fragile takes the idea of the 80/20 principle to a higher level, I recommend that they should be read together in the name of you obtaining a more enhanced strategic learning process, and understanding of the keys to self-mastery:
http://involgize.com/%e2%80%9cwhy-every-intelligent-person-should-use-the-8020-principle-daily%e2%80%9d/
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Zero to One:
As a book that is almost guaranteed to powerfully challenge your current ideas about learning, business, investing, as well as established economic theories – Zero to One should be read together with Anti-Fragile. The writer of Zero to One, Peter Thiel, is a perfect example of the power of antifragility: a person who cleverly searches for financial asymmetries, pursues unstructured learning and self-education, and seriously questions all traditional ideas and ways of thinking. For further details, please click on the following link:
http://involgize.com/forget-about-doing-business-create-or-invest-in-a-monopoly/
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Conclusion
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With a focus on developing my financial intelligence, I read Anti-Fragile in order to better assess the strengths and weaknesses of the crypto-currencies space (meaning Bitcoin, various blockchain startups, and so on).
Within cryptos, it is typical for the price of various crypto-currencies to move 20 to 30% in a single day – which would be considered a stock market crash if this happened once in a year only in relation to a stock market index. To put simply, say you invest £100 in Bitcoin today, by tomorrow, it could typically increase to £130, or decrease to £70. Furthermore, in cryptos, it is common for investors to obtain a 1000+ % percent return in a few months (something considered to be impossible to achieve within the mainstream financial system). In other words, if you invest £1 in Bitcoin, today, it could potentially increase to £1000+ in several months time. However, in due course, you could also lose your entire £1000+ gain!
The result is that I became increasingly uncomfortable with the violent levels of volatility and uncertainty within the crypto space, and its continued impact on my investments. I felt the need, therefore, to purchase a book that would teach me, in depth, about the advantages and disadvantages of disorder or extreme movements, urgently.
The outcome…
Well, thanks to Anti-Fragile, I have done a complete 180 degree U-turn…
I now embrace and welcome further volatility and uncertainty in the crypto space – especially as the writer powerfully highlights that it is the smooth running of the main financial system that is unnatural, problematic, and something for me to be more concerned about in the long term.
Moreover, amongst many other things, I learnt:
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- The effectiveness of applying the writer’s 90/10 antifragile barbell strategy when investing in cryptocurrencies.
. - That my structured education in law and finance was acting as a hindrance due to the great extent to which this type of learning and ‘…mathematics is making people over-optimise and cut corners [in society], causing fragility (p. 223).’ As the writer argues, you do not go to school to learn about how to find asymmetries, but in fact to become blind to them.
. - That data is toxic in large quantities, going against antifragility…. By looking at the very same data on a daily basis such as crypto news… it will be 95% noise and 5% signals… ‘the more data you get the less you know what is going on (p. 128).’
. - That to workout what the future is likely to look like, we must just take away the things, today, that are fragile, instead of trying too hard to overstretch our imagination.
. - About the true power and implications of becoming antifragile in life generally. For me, this means that, specifically, I should continue to read, learn, and work in an unstructured way in order to seek and capitalize on the many aspects of the disorder family.
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Having read Nassim’s two other books, Fooled by Randomness and The Black Swan, I would advise most reader to start with this one first.
To conclude, I highly recommend Anti-Fragile because of its capacity to severely upgrade a person’s critical thinking capacity, and provide clear practical guidance for everyday application.
Until the next review…
Keep-it-moving…
Let’s go!!!
Tom