Fooled by Randomness by Nassim Taleb
The Hidden Role of Chance in Life and in the Markets
Start stressing personal elegance at your next misfortune. … The only article Lady Fortuna has no control over is your behavior. Good luck.
Commentary
I came to Taleb's work backwards, stumbling into Skin in the Game in late 2019. It felt like walking into an intellectual salon with the heavy weights of history realizing I'd been shadowboxing my whole life. It's the kind of writing that turns you upside down shaking the lint from your pockets - after which I found it impossible to go back to my previous reality. Reading the fifth book of the Incerto first was like first stumbling into the final scene of The Matrix, watching Neo bend reality without understanding how he first learned to see through the illusion.
That experience sent me back to the beginning, and now, almost five years to the day, I'm embarking on a mission to re-read the Incerto, in order this time1: Fooled by Randomness, The Black Swan, The Bed of Procrustes, Antifragile, and Skin in the Game. My second reading of Fooled by Randomness hit differently. What once felt like intellectual mountaineering - concepts and characters floating just beyond my grasp - now feels like revisiting a wise but cantankerous mentor who delights in demolishing everything you thought you knew about probability, success, and the treacherous nature of randomness in our lives.
Reading Taleb is like learning a new language - one that helps you decode the complex grammar of reality. Fooled by Randomness isn't just his opening statement, it's a foundational perspective on reality - the one that opens the other four doors of the Incerto. Once you grasp the principles in Fooled by Randomness, you can't help but see the world differently. And maybe that's the point: not to make us more certain, but to help us become more comfortable being uncomfortable. As Taleb writes, "Probability is not a mere computation of odds on the dice or more complicated variants; it is the acceptance of the lack of certainty in our knowledge and the development of methods for dealing with our ignorance."
What I’m stealing
On Survival and Randomness
The core of Taleb's wisdom lies in his understanding of how randomness can either destroy or empower us. These are the principles I find myself returning to daily:
Frequency of success is irrelevant if a single failure is too costly to survive
Things that come with the help of luck can be taken away by luck rapidly and unexpectedly
Things that come with little help from luck are more resistant to randomness
No rare event should harm me. In fact, I would like all conceivable rare events to help me
Take the best of what the past can give you without its dangers. Use statistics and inductive methods to make aggressive bets, but do not use them to manage risks and exposure
On Intellectual Rigor and Modern Myths
Beneath Taleb's arrogant wit lies a deep commitment to clear thinking. His most powerful insights about knowledge and uncertainty have become my intellectual compass:
Mathematics is principally a tool to meditate, rather than to compute
A random series will always present some detectable pattern. Beware of fitting the data
Due entirely to luck/randomness - A counterintuitive point is that a population composed of only bad managers will produce a small amount of them with great track records
Beware conflating the absence of evidence for evidence of absence
It is not the estimate or the forecast that matters so much as the degree of confidence of the opinion
On the Path to Excellence
Here lie the practical insights about achievement and recognition that challenge conventional wisdom:
There are routes to success that are nonrandom, but few, very few, people have the mental stamina to follow them. Those who go the extra mile are rewarded. Most people give up before the rewards
Whenever I hear "work ethic" interpret as inefficient mediocrity
Heroes are heroes because they are heroic in behavior, not because they win or lose
The nonlinear effect behind success in anything: It is better to have a handful of enthusiastic advocates than hordes of people who appreciate your work. Better to be loved by a dozen than liked by the masses.
On Cultural and Personal Wisdom
Finally, these are the broader philosophical insights that have shaped my worldview beyond mere probability and risk:
Embrace a natural interest in a variety of intellectual subjects
Age is beauty, the new and the young are generally toxic
Nothing can be more bland than translated poetry
We do not need to be rational and scientific when it comes to the details of our daily life‚ only in those that can harm us and threaten our survival
Art is a tool for the investigation of Truth
We are mere animals in need of lower forms of tricks
Supplemental Resources
Dog ears, highlights, marginalia
I got sucked into the implications of the difference between Montaigne and Descartes‚ and how we strayed by following the latters quest for certitudes. We surely closed our minds by following Descartes‚ model of formal thinking rather than Montaigne, brand of vague and informal (but critical) judgment.
Hard work, showing up on time, wearing a clean (preferably white) shirt, using deodorant, and some such conventional things contribute to success they are certainly necessary but may be insufficient as they do not cause success. The same applies to the conventional values of persistence, doggedness and perseverance: necessary, very necessary.
Black swans, those rare and unexpected deviations, can be both good and bad events.
few claim that art is a tool of investigation of the Truth‚ rather than an attempt to escape it or make it more palatable.
Probability theory is a young arrival in mathematics; probability applied to practice is almost nonexistent as a discipline.
My colleague Bob Jaeger (he followed the opposite course of mine of moving from philosophy professor to trader) presents a more potent view of the dichotomy: There are those who think that there are easy clear-cut answers and those who dont‚ think that simplification is possible without severe distortion (his hero: Wittgenstein; his villain: Descartes). I am enamored of the difference as I think that the generator of the Fooled by Randomness problem, the false belief in determinism, is also associated with such reduction of the dimensionality of things. As much as you believe in the ‚keep-it-simple-stupid‚ it is the simplification that is dangerous.
(his hero: Wittgenstein; his villain: Descartes).
Things that which came with the help of luck could be taken away by luck (and often rapidly and unexpectedly at that). The flipside, which deserves to be considered as well (in fact it is even more of our concern), is that things that come with little help from luck are more resistant to randomness.
it does not matter how frequently something succeeds if failure is too costly to bear.
what the French call a coup de foudre, a sudden intense (and obsessive) infatuation that strikes like lightning.
Note that such use of mathematics is only illustrative, aiming at getting the intuition of the point, and should not be interpreted as an engineering issue. In other words, one need not actually compute the alternative histories so much as assess their attributes. Mathematics is not just a numbers game it is a way of thinking. We will see that probability is a qualitative subject.
one does not observe the barrel of reality.
The interesting thing about these physicists did not lie in their ability to discuss fluid dynamics; it is that they were naturally interested in a variety of intellectual subjects and provided pleasant conversation.
Heroes are heroes because they are heroic in behavior, not because they won or lost.
As a derivatives trader I noticed that people do not like to insure against something abstract; the risk that merits their attention is always something vivid.
Much of what rational thinking seems to do is rationalize ones actions by fitting some logic to them.
the mental probabilistic map in one’s mind is so geared toward the sensational that one would realize informational gains by dispensing with the news.
volatility seems to be determined not by the actual moves but by the tone of the media. The market movements in the eighteen months after September 11, 2001, were far smaller than the ones that we faced in the eighteen months prior‚ but somehow in the mind of investors they were very volatile. The discussions in the media of the terrorist threats, magnified the effect of these market moves in people’s heads. This is one of the many reasons that journalism may be the greatest plague we face today the world becomes more and more complicated and our minds are trained for more and more simplification.
Any reading of the history of science would show that almost all the smart things that have been proven by science appeared like lunacies at the time they were first discovered.
Age is beauty, almost always, and the new and the young are generally toxic.
The American public was recently exposed to one of these characters with the Unabomber, the bearded and recluse mathematician who lived in a hut and took to murdering people who promoted modern technology. No journalist was capable of even coming close to describing the subject matter of his thesis, Complex Boundaries,as it has no intelligible equivalent complex number being an entirely abstract and imaginary number that includes the square root of minus one, an object that has no analog outside of the world of mathematics.
The Monte Carlo man‚ realism without the shallowness, combined with the mathematician‚ intuitions without the excessive abstraction. For indeed this branch of mathematics is of immense practical use, does not present the same dryness commonly associated with mathematics. I became addicted to it the minute I became a trader. It shaped my thinking in most matters related to randomness.
Mathematics is principally a tool to meditate, rather than to compute.
For instance, someone with no formal knowledge of geometry can compute the mysterious, almost mystical Pi. How? By drawing a circle inside of a square, and shooting random bullets into the picture (as in an arcade), specifying equal probabilities of hitting any point on the map (something called a uniform distribution). The ratio of bullets inside the circle divided by those inside and outside the circle will deliver a multiple of the mystical Pi, with possibly infinite precision. Clearly, this is not an efficient use of a computer as Pi can be computed analytically, that is, in a mathematical form, but the method can give some users more intuition about the subject matter than lines of equations. Some people’s brains and intuitions are oriented in such a way that they are more capable of getting a point in such a manner (I count myself one of those). The computer might not be natural to our human brain; neither is mathematics.
a mathematician would be interested in improving mathematics (via theorems and proofs). I proved incapable of concentrating on deciphering a single equation unless I was motivated by a real problem (with a modicum of greed); thus most of what I know comes from derivatives trading options pushed me to study the math of probability. Many compulsive gamblers, who otherwise would be of middling intelligence, acquire remarkable card-counting skills thanks to their passionate greed.
The two greatest minds to me, Einstein and Keynes,
As for Keynes, to the literate person he is not the political economist that tweed-clad leftists love to quote, but the author of the magisterial, introspective, and potent Treatise on Probability. For before his venturing into the murky field of political economy, Keynes was a probabilist.
I never considered myself better than an unenthusiastic equation solver and was rarely capable of prowess in the matter‚ being better at setting up equations than solving them. Suddenly, my engine allowed me to solve with minimal effort the most intractable of equations. Few solutions became out of reach.
**Note:** This is how i feel about LLMs
I have two ways of learning from history: from the past, by reading the elders; and from the future, thanks to my Monte Carlo toy.
Our minds are not quite designed to understand how the world works, but, rather, to get out of trouble rapidly and have progeny. If they were made for us to understand things, then we would have a machine in it that would run the past history as in a VCR, with a correct chronology, and it would slow us down so much that we would have trouble operating.
There are instances where I like to be fooled by randomness. My allergy to nonsense and verbiage dissipates when it comes to art and poetry. On the one hand, I try to define myself and behave officially as a no-nonsense hyperrealist ferreting out the role of chance; on the other, I have no qualms indulging in all manner of personal superstitions. Where do I draw the line? The answer is aesthetics. Some aesthetic forms appeal to something in our biology, whether or not they originate in random associations or plain hallucination. Something in our human genes is deeply moved by the fuzziness and ambiguity of language; then why fight it?
regardless of whether the poetry was obtained by a Monte Carlo engine or sung by a blind man in Asia Minor, language is potent in bringing pleasure and solace. Testing its intellectual validity by translating it into simple logical arguments would rob it of a varying degree of its potency, sometimes excessively; nothing can be more bland than translated poetry.
Four decades ago, the Catholic church translated the services and liturgies from Latin to the local vernaculars; one may wonder if this caused a drop in religious beliefs. Suddenly religion subjected itself to being judged by intellectual and scientific, without the aesthetic, standards. The Greek Orthodox church made the lucky mistake, upon translating some of its prayers from Church Greek into the Semitic-based vernacular spoken by the Grecosyrians of the Antioch region (southern Turkey and northern Syria), of choosing classical Arabic, an entirely dead language. My folks are thus lucky to pray in a mixture of dead Koiné (Church Greek) and no less dead Koranic Arabic.
We do not need to be rational and scientific when it comes to the details of our daily life—only in those that can harm us and threaten our survival. Modern life seems to invite us to do the exact opposite; become extremely realistic and intellectual when it comes to such matters as religion and personal behavior, yet as irrational as possible when it comes to matters ruled by randomness (say, portfolio or real estate investments).
Darwinian ideas are about reproductive fitness, not about survival.
Whenever there is asymmetry in outcomes, the average survival has nothing to do with the median survival.
it is just that reality does not have the same closed and symmetric laws and regulations as games. This competitive nature got him into ferocious fighting to “win.” As we saw in the last chapter, markets (and life) are not simple win/lose types of situations, as the cost of the losses can be markedly different from that of the wins.
Sadly, I learned quite a bit from Niederhoffer, mostly by contrast, and particularly from the last example: not to approach anything as a game to win, except, of course, if it is a game. Even then, I do not like the asphyxiating structure of competitive games and the diminishing aspect of deriving pride from a numerical performance. I also learned to stay away from people of a competitive nature, as they have a tendency to commoditize and reduce the world to categories, like how many papers they publish in a given year, or how they rank in the league tables. There is something nonphilosophical about investing one’s pride and ego into a “my house/library/car is bigger than that of others in my category”—it is downright foolish to claim to be first in one’s category all the while sitting on a time bomb.
centuries). I suddenly felt financially insecure and feared becoming an employee of some firm that would turn me into a corporate slave with ‚ work ethics‚ (whenever I hear work ethics I interpret inefficient mediocrity). I needed the backing of my bank account so I could buy time to think and enjoy life.
the difference between Newtonian physics, which was falsified by Einstein‚ relativity, and astrology lies in the following irony. Newtonian physics is scientific because it allowed us to falsify it, as we know that it is wrong, while astrology is not because it does not offer conditions under which we could reject it. Astrology cannot be disproved, owing to the auxiliary hypotheses that come into play. Such point lies at the basis of the demarcation between science and nonsense (called the problem of demarcation).
I am an exceedingly naive falsificationist. Why? Because I can survive being one. My extreme and obsessive Popperism is carried out as follows. I speculate in all of my activities on theories that represent some vision of the world, but with the following stipulation: No rare event should harm me. In fact, I would like all conceivable rare events to help me. My idea of science diverges with that of the people around me walking around calling themselves scientists. Science is mere speculation, mere formulation of conjecture.
Like Pascal, I will therefore state the following argument. If the science of statistics can benefit me in anything, I will use it. If it poses a threat, then I will not. I want to take the best of what the past can give me without its dangers. Accordingly, I will use statistics and inductive methods to make aggressive bets, but I will not use them to manage my risks and exposure. Surprisingly, all the surviving traders I know seem to have done the same. They trade on ideas based on some observation (that includes past history) but, like the Popperian scientists, they make sure that the costs of being wrong are limited (and their probability is not derived from past data). Unlike Carlos and John, they know before getting involved in the trading strategy which events would prove their conjecture wrong and allow for it (recall that Carlos and John used past history both to make their bets and to measure their risk). They would then terminate their trade. This is called a stop loss, a predetermined exit point, a protection from the black swan. I find it rarely practiced.
beware the middlebrow: A small knowledge of probability can lead to worse results than no knowledge at all.
Nero Tulip,
By living on Park Avenue, one does not have exposure to the losers, one only sees the winners.
The first counterintuitive point is that a population entirely composed of bad managers will produce a small amount of great track records.
This “reversion” for the large outliers is what has been observed in history and explained as regression to the mean. Note that the larger the deviation, the more important its effect.
Again, one word of warning: All deviations do not come from this effect, but a disproportionately large proportion of them do.
Remember that nobody accepts randomness in his own success, only his failure.
survivorship bias
We need to know the size of the population from which he came. In other words, without knowing how many managers out there have tried and failed, we will not be able to assess the validity of the track record. If the initial population includes ten managers, then I would give the performer half my savings without a blink. If the initial population is composed of 10,000 managers, I would ignore the results.
I am fitting the rule on the data. This activity is called data snooping. The more I try, the more I am likely, by mere luck, to find a rule that worked on past data. A random series will always present some detectable pattern. I am convinced that there exists a tradable security in the Western world that would be 100% correlated with the changes in temperature in Ulan Bator, Mongolia.
Plutarch
people patronize what other people like to do. Forcing rational dynamics on the process would be superfluous, nay, impossible. This is called a path dependent outcome, and has thwarted many mathematical attempts at modeling behavior.
which ones achieved early sales and, over time, which firms dominated.”
As I said in Chapter 3, mathematics is merely a way of thinking and meditating, little more, in our world of randomness.
Once again the important fact is knowing the existence of these nonlinearities, not trying to model them.
Our emotional apparatus is designed for linear causality. For instance, you study every day and learn something in proportion to your studies. If you do not feel that you are going anywhere, your emotions will cause you to become demoralized. But reality rarely gives us the privilege of a satisfying linear positive progression: You may study for a year and learn nothing, then, unless you are disheartened by the empty results and give up, something will come to you in a flash. My partner Mark Spitznagel summarizes it as follows: Imagine yourself practicing the piano every day for a long time, barely being able to perform “Chopsticks,” then suddenly finding yourself capable of playing Rachmaninov. Owing to this nonlinearity, people cannot comprehend the nature of the rare event. This summarizes why there are routes to success that are nonrandom, but few, very few, people have the mental stamina to follow them. Those who go the extra mile are rewarded. In my profession one may own a security that benefits from lower market prices, but may not react at all until some critical point. Most people give up before the rewards.
I am also realizing the nonlinear effect behind success in anything: It is better to have a handful of enthusiastic advocates than hordes of people who appreciate your work—better to be loved by a dozen than liked by the hundreds. This applies to the sales of books, the spread of ideas, and success in general and runs counter to conventional logic. The information age is worsening this effect. This is making me, with my profound and antiquated Mediterranean sense of metron (measure), extremely uncomfortable, even queasy. Too much success is the enemy (think of the punishment meted out on the rich and famous); too much failure is demoralizing. I would like the option of having neither.
Normative economics is like religion without the aesthetics.
This is the most significant distortion and the one that carries the most consequences. In order to be able to put things in general context, you do not have everything you know in your mind at all times, so you retrieve the knowledge that you require at any given time in a piecemeal fashion, which puts these retrieved knowledge chunks in their local context. This means that you have an arbitrary reference point and react to differences from that point, forgetting that you are only looking at the differences from that particular perspective of the local context, not the absolutes.
evolutionary psychology,
This might be a platitude to those who frequent the Greek and Latin classics, but we never fail to be surprised when noticing that people a couple of dozen centuries removed from us can exhibit similar sensibility and feelings. What used to strike me as a child upon visiting museums is that ancient Greek statues exhibit men with traits indistinguishable from ours (only more harmonious and aristocratic). I was so wrong to believe that 2,200 years was a long time. Proust wrote frequently about the surprise people have when coming across emotions in Homeric heroes that are similar to those we experience today. By genetic standards, these Homeric heroes of thirty centuries ago in all likelihood have the exact identical makeup as the pudgy middle-aged man you see schlepping groceries in the parking lot. More than that. In fact, we are truly identical to the man who perhaps eighty centuries ago started being called “civilized,” in that strip of land stretching from southeastern Syria to southwestern Mesopotamia.
The real problem is, as I have mentioned, that such a natural habitat does not include much information. An efficient computation of the odds was never necessary until very recently. This also explains why we had to wait until the emergence of the gambling literature to see the growth of the mathematics of probability. Popular belief holds that the religious backdrop of the first and second millennia blocked the growth of tools that hint at absence of determinism, and caused the delays in probability research. The idea is extremely dubious; we simply did not compute probabilities because we did not dare to? Surely the reason is rather because we did not need to. Much of our problem comes from the fact that we have evolved out of such a habitat faster, much faster, than our genes. Even worse, our genes have not changed at all.
I will present the theses of two watershed works presented in readable books, Damasio’s Descartes’ Error and LeDoux’s Emotional Brain. Descartes’ Error presents a very simple thesis: You perform a surgical ablation on a piece of someone’s brain (say, to remove a tumor and tissue around it) with the sole resulting effect of an inability to register emotions, nothing else (the IQ and every other faculty remain the same).
Joseph LeDoux’s theory about the role of emotions in behavior is even more potent: Emotions affect one’s thinking. He figured out that much of the connections from the emotional systems to the cognitive systems are stronger than connections from the cognitive systems to the emotional systems. The implication is that we feel emotions (limbic brain) then find an explanation (neocortex). As we saw with Claparède’s discovery, much of the opinions and assessments that we have concerning risks may be the simple result of emotions.
We think with our emotions and there is no way around it.
What is less unpleasant: to lose 100 times $1 or lose once $100? Clearly the second: Our sensitivity to losses decreases. So a trading policy that makes $1 a day for a long time then loses them all is actually pleasant from a hedonic standpoint, although it does not make sense economically.
One example to illustrate further option blindness. What has more value? (a) a contract that pays you $1 million if the stock market goes down 10% on any given day in the next year; (b) a contract that pays you $1 million if the stock market goes down 10% on any given day in the next year due to a terrorist act. I expect most people to select (b).
The most common one concerns the interpretation of evidence. They most commonly get mixed up between absence of evidence and evidence of absence,
I translate it well, the journalist claims to provide an explanation for something that amounts to perfect noise. A move of 1.03 with the Dow at 11,000 constitutes less than a 0.01% move. Such a move does not warrant an explanation. There is nothing there that an honest person can try to explain; there are no reasons to adduce.
Finally, a proper confidence level needs to be given to the factor itself; if it is less than 90% the story would be dead. I can understand why Hume was extremely obsessed with causality and could not accept such inference anywhere.
I managed to build an instinctive way of knowing if something serious is going on. The trick is to look only at the large percentage changes. Unless something moves by more than its usual daily percentage change, the event is deemed to be noise. Percentage moves are the size of the headlines. In addition, the interpretation is not linear; a 2% move is not twice as significant an event as 1%, it is rather like four to ten times. A 7% move can be several billion times more relevant than a 1% move! The headline of the Dow moving by 1.3 points on my screen today has less than one billionth of the significance of the serious 7% drop of October 1997. People might ask me: Why do I want everybody to learn some statistics? The answer is that too many people read explanations. We cannot instinctively understand the nonlinear aspect of probability.
Note: This is very Demming-esq
is not the estimate or the forecast that matters so much as the degree of confidence with the opinion.
We can see that my activity in the market (and other random variables) depends far less on where I think the market or the random variable is going so much as it does on the degree of error I allow around such a confidence level.
believe that I need my emotions to formulate my ideas and get the energy to execute them.
I am just intelligent enough to understand that I have a predisposition to be fooled by randomness—and to accept the fact that I am rather emotional. I am dominated by my emotions—but as an aesthete, I am happy about that fact. I am just like every single character whom I ridiculed in this book. Not only that, but I may be even worse than them because there may be a negative correlation between beliefs and behavior (recall Popper the man). The difference between me and those I ridicule is that I try to be aware of it. No matter how long I study and try to understand probability, my emotions will respond to a different set of calculations, those that my unintelligent genes want me to handle. If my brain can tell the difference between noise and signal, my heart cannot.
This mechanism I also call Wittgenstein’s ruler: Unless you have confidence in the ruler’s reliability, if you use a ruler to measure a table you may also be using the table to measure the ruler.
Recall that the accomplishment from which I derive the most pride is my weaning myself from television and the news media. I am currently so weaned that it actually costs me more energy to watch television than to perform any other activity, like, say, writing this book. But this did not come without tricks. Without tricks I would not escape the toxicity of the information age.
What is the trick? I have the volume turned completely off.
A little brooding revealed that my life until then had been governed by mild superstitions, me the expert in options, the dispassionate calculator of probabilities, a rational trader! It was not the first time that I had acted on mild superstitions of a harmless nature, which I believed were instilled in me by my Eastern Mediterranean roots: One does not grab the salt shaker from the hand of another person risking a falling out; one is to knock on wood upon receiving a compliment; plus many other Levantine beliefs passed on for a few dozen centuries. But like many things that brew and spread around the ancient pond, these beliefs I had taken with a fluctuating mixture of solemnity and mistrust. We consider them more like rituals than truly important actions meant to stave off undesirable turns of the goddess Fortuna—superstitions can instill some poetry in daily life.
We need tricks to get us there but before that we need to accept the fact that we are mere animals in need of lower forms of tricks, not lectures.
probability is not about the odds, but about the belief in the existence of an alternative outcome, cause, or motive. Recall that mathematics is a tool to meditate, not compute.
let us go back to the elders for more guidance—for probabilities were always considered by them as nothing beyond a subjective, and fluid, measure of beliefs.
As the skeptics’ main teaching was that nothing could be accepted with certainty, conclusions of various degrees of probability could be formed, and these supplied a guide to conduct.
One author from antiquity who provides us evidence of such thinking is the garrulous Cicero. He preferred to be guided by probability than allege with certainty—very handy, some said, because it allowed him to contradict himself.
What characterizes real speculators like Soros from the rest is that their activities are devoid of path dependence.
My lesson from Soros is to start every meeting at my boutique by convincing everyone that we are a bunch of idiots who know nothing and are mistake-prone, but happen to be endowed with the rare privilege of knowing it.
Stoicism is not the stiff upper lip, but the illusion of victory of man against randomness.
one of the greatest poets who ever breathed is C. P. Cavafy. Cavafy was an Alexandrian Greek civil servant with a Turkish or Arabic last name who wrote almost a century ago in a combination of classical and modern Greek a lean poetry that seems to have eluded the last fifteen centuries of Western literature.
While shaken with emotion. No stiff upper lip. There is nothing wrong and undignified with emotions—we are cut to have them. What is wrong is not following the heroic or, at least, the dignified path. That is what stoicism truly means. It is the attempt by man to get even with probability.
The stoic is a person who combines the qualities of wisdom, upright dealing, and courage. The stoic will thus be immune from life’s gyrations as he will be superior to the wounds from some of life’s dirty tricks. But things can be carried to the extreme; the stern Cato found it beneath him to have human feelings. A more human version can be read in Seneca’s Letters from a Stoic, a soothing and surprisingly readable book that I distribute to my trader friends (Seneca also took his own life when cornered by destiny).
Start stressing personal elegance at your next misfortune. Exhibit sapere vivere (“know how to live”) in all circumstances. Dress at your best on your execution day (shave carefully); try to leave a good impression on the death squad by standing erect and proud. Try not to play victim when diagnosed with cancer (hide it from others and only share the information with the doctor—it will avert the platitudes and nobody will treat you like a victim worthy of their pity; in addition, the dignified attitude will make both defeat and victory feel equally heroic). Be extremely courteous to your assistant when you lose money (instead of taking it out on him as many of the traders whom I scorn routinely do). Try not to blame others for your fate, even if they deserve blame. Never exhibit any self-pity, even if your significant other bolts with the handsome ski instructor or the younger aspiring model. Do not complain. If you suffer from a benign version of the “attitude problem,” like one of my childhood friends, do not start playing nice guy if your business dries up (he sent a heroic e-mail to his colleagues informing them “less business, but same attitude”). The only article Lady Fortuna has no control over is your behavior. Good luck.
research on happiness shows that those who live under a self-imposed pressure to be optimal in their enjoyment of things suffer a measure of distress.
But if you randomize your trigger point, sometimes overreacting at the slightest joke, people will not know in advance how far they can push you. The same applies to governments in conflicts: They need to convince their adversaries that they are crazy enough to sometimes overreact to a small peccadillo. Even the magnitude of their reaction should be hard to foretell. Unpredictability is a strong deterrent.
One single observation can invalidate a general statement derived from millennia of confirmatory sightings of millions of white swans. All you need is one single (and, I am told, quite ugly) black bird.*
Though probably not in succession.