Fresh Nuggets - Nassim Taleb | The Best Methodology to Significantly INCREASE your Odds of SUCCESS at Anything (empirically proven) [w/ Naval Ravikant]
Hey friend!
I just made a video about the best methodology / approach that exists to go about any activity -- that is the approach of trial and error. Along the video, Nassim Taleb argues why this approach absolutely beats the approach of acting exclusively from theoretical knowledge, and he shows a model (generated from a simulation) of how better is this approach in comparison to theoretical knowledge.
Finally, Naval Ravikant together with Sahil Lavingia and Ben Thompson talk about how all their success came from executing in a trial and error fashion, and how each error led to a clearer decision.
Here are all the notes and reflections I took...
🧠 Quotes
- "A lot of things that we believe come from theoretical knowledge, effectively come from tinkering" - Nassim Taleb
"Most Successful Creators are ultimately Tinkerers" - Naval Ravikant
"What fools call 'wasting time' is most often the best investment." - Nassim Taleb. (The Bed of Procrustes)
"You can't connect the dots looking forward, you can only connect them looking backwards" - Steve Jobs
“Ideas don't come out fully formed, they only become clear as you work on them . You just have to get started.” - Mark Zuckerberg (Harvard Speech)
👨 Speakers
Nassim Taleb
Nassim Taleb's work concerns problems of randomness, probability, and uncertainty. Author of many successful books, including The Black Swan, which The Sunday Times considers one of the 12 most influential books since World War II.
Daniel Kahneman (source: wikipedia)
Daniel Kahneman is notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences (shared with Vernon L. Smith). His empirical findings challenge the assumption of human rationality prevailing in modern economic theory.
Naval Ravikant
Naval is an entrepreneur and angel investor, a co-author of Venture Hacks, and a co-maintainer of AngelList. I have learnt so much from his deep wisdom about many wide-ranging topics, from meditation and inner freedom to web 3.0 and crypto. I'm grateful for his willingness to share his insights, and inspire me to become a wiser / happier person.
📝 Notes
Nassim Taleb & Daniel Kahneman
- Trial & Error (approach):
(Approach to knowledge --> BOTTOM-UP)
* Conditions:
** The Error is small.
** Be aware that the unintelligible (what we don't understand) does not necessarily imply unintelligence.
* Benefits:
** Big upside (large pay-off potential) --> Convex Pay-off (see picture with the simulation)
** This approach is fully "Antifragile"!
*** Small (frequent) losses
*** Big (unfrequent) gains
**** (why this works? -- the magnitude of a one-off gain can be vastly superior to the sum of all small losses over time)
** This approach significantly outperforms the approach of acting exclusively from theoretical knowledge.
** Gives you Optionality at any point in time (which gives you the chance of being opportunistic!) ---> the more options, the more you can adapt to the changing environment and thrive!
- Theoretical Knowledge
(Approach to knowledge --> TOP-DOWN)
(the "convexity bias" reflects how much better is the Trial & Error approach compared to Theoretical Knowledge approach)
(Picking Nugget's Note:
I guess it's very difficult to know in advance what's going to work. So, in lack of omnipotence, is better to stick to trial and error! You develop knowledge from each error / iteration, until you get it right -- the key is to learn and improve from each iteration!)
Besides, acting exclusively from theoretical knowledge raises 2 big issues:
1) Although we might be convinced that we know something, most times this is an illusion. In reality, we might just know 1% of something, or even be flat wrong about it.
"The overeducated are worse off than the undereducated, having traded common sense for the illusion of knowledge" - Naval Ravikant
"What we know is a drop, what we don't know is an ocean" - Isaac Newton
"The first principle is that you must not fool yourself and you are the easiest person to fool." - Richard Feynman
2) Even if we get the knowledge base right, knowing how to execute it well is another issue. The process of taking that knowledge and convert it into something tangible and useful is also pretty hard to come up from an exclusively theoretical base.
- Took some ideas from Shortform's book guide "Antifragile"
- "A lot of things that we believe come from theoretical knowledge, effectively come from tinkering (trial and error approach)" - Nassim Taleb
Naval Ravikant, Ben Thompson, Sahil Lavingia
(Episode first released on the 10th of June 2022)
"Most Successful Creators are ultimately Tinkerers" - Naval Ravikant
- Trial & Error (approach):
* Traits of tinkerers:
** Plays at the edge of his field.
** Genuine interest.
"Learn how to be in your particular moment" - Ben Thompson
"Your only moment of Power and Knowledge is the Present" - Naval Ravikant
- Theoretical Knowledge (approach):
"People get so fixated 5-10 years in the future" - Ben Thompson
* The more you stick to a (long-term) plan, the more you will miss Reality.
Picking Nuggets Note: As Nassim argues, someone needs 1000 IQ points to correctly predict something so complex as reality and its fluidly changing evolution.
- (Meeting in the middle) --> Have plans, but loosely held!
_____________________
(Picking Nuggets Note: Besides the Education Institutions taking credit for the achievements of many great inventors, another reason for why we might overvalue theoretical knowledge is the existence of the "hindsight bias" -- which "eliminates" all factors of randomness, luck and optionality in a process).
Link to the video:
https://www.youtube.com/watch?v=BXnSbF6fteY&feature=youtu.be&ab_channel=PickingNuggets
💬 Reflections
In my perspective, the theoretical knowledge is important to have a minimum of good judgement to know more less what path to take and also detect the BS and nonsense that exists in most industries (specially important in new emerging and still-to-fully-regulate industries, i.e. crypto / blockchain / web 3.0 ..., because these will have lots of scams around).
As you acquire these foundational axioms (what Elon Musk would call first principles thinking), you will be ready to follow the path/s you want. In that path, you execute thru trial and error and learn from the errors and implement that new knowledge into your previous knowledge base.
So, I think the theoretical knowledge is useful for having a first principles thinking base and a minimum understanding necessary for a given activity, but then all real and innovative learning will come from the bottom-up knowledge (from the outcomes of an iteration, you learn and rationally decide to move one way or the other --> optionality / opportunistic ).
Just like Warren Buffet and Charlie Munger spend most of their days thinking and reading (and inevitably learning from theoretical knowledge), all their investment decisions to action (the execution part) are absolutely opportunistic, and they keep learning from each mistaken decision!
The key I think is to never stop learning from either theoretical knowledge or tinkering. Because just like compounding in investments, knowledge does also compounds and we are never too wise at anything (in absolute terms).
"Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day." - Charlie Munger
The Fresh Nuggets (Newsletter) is brought to you by Shortform
Shortform is THE platform to go if you wanna find highly valuable nuggets (big ideas) from important non-fiction books. Beyond offering book summaries, they provide you with a full guide and synthesis of all the worthy ideas in a book. Personally, I love it because I can absorb book ideas at a faster pace compared to reading the entire books, and there is a deep analysis on each idea! (it is not shallowly explained, as it is the case in other platforms).
(Many times book authors will make hundreds of pages based on just a few new ideas just for the sake of producing a book, but in reality they could have given you these new-interesting ideas in just few pages. This is the cool thing about Shortform: you cut to the chase and get the book insights without having to go thru unnecessary extensions of them. Besides, in any book guide on Shortform you can find links to blogposts related to the same ideas! -- as Naval Ravikant argues: reading books to completion is more of a vanity metric. What actually matters is to look for ideas, and once you find good interesting ideas, you reflect and research on them. [Naval on the podcast with Joe Rogan]. And it is the foundational understanding of all these truthful and interdisciplinary ideas that will make you better in any life dimension [Charlie Munger, Warren Buffet, Naval Ravikant]).
Besides, I have found at least 50-60 books (on Shortform) that were on my personal reading list. These include 4 popular books of Nassim Taleb:
So you will likely find many interesting book guides on Shortform! My plan is to read these book guides and if in a particular one I find a super interesting-new idea to me, I will also buy the book and read it entirely!
If you wanna check out Shortform, you can use my special link to support the channel and you will have a 5-day FREE trial and a 20% off the annual subscription - shortform.com/pickingnuggets
The mark of a great (non-fiction) author...
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👨💻Some content I have found pretty cool and valuable
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Gary Vee video (first video of the list) — m.facebook.com
Until next time,
Julio xx
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