There are no black swans in our world because we can't see them.
In Black Swan, Taleb introduces the three characteristics of the black swan phenomenon: unpredictability, huge impact, and traceability after the fact.
In our world, history is traceable, all have causal logic, precision, such as World War I, World War II, financial crisis, subprime mortgage crisis... In our retrospection of history, there are precursors, it is possible to find foreknowledge, so there are no black swans in our world.
But the reality is that we still don't know anything when the next black swan comes. The reason why this happens is because we have cognitive biases such as narrative fallacies, confirmation fallacies, survivor biases, and game fallacies that make us invisible to black swans.
If we can grasp these four cognitive biases, then in the understanding of reality, we can already surpass 80% of the people, and we also have the opportunity to see black swans, further affected by positive black swans.
<h1 class="pgc-h-arrow-right" data-track="6" > narrative fallacy: the queen is also dead</h1>
The first sentence: The king is dead, and the queen is dead. Second sentence: The king dies, and then the queen dies of grief. Let's experience, which of these two sentences is easier to remember?
Obviously, the second sentence is easier to remember. The second sentence is simpler from the point of view of understanding memory, because it has a certain causal relationship. Although the word count has increased, the overall complexity has decreased because of causality.
Narrative fallacy: Refers to the inability to observe a series of facts without making up reasons or imposing a logical relationship. —Taleb, The Black Swan, Chapter 6
In reality, we are accustomed to, even unconsciously, frantically searching for various causal relationships, because this can eliminate uncertainty. I even think that in the subconscious, whether this causal relationship can truly reflect reality, people don't care, we just need the cause. With a reason, you can give an explanation to your superiors, friends, family, and mainly to yourself.
One day in December 2003, Saddam Hussein was arrested, and Bloomberg News used it to explain the opposite, different events: 13:01: "Rising U.S. Treasury Prices; Saddam Hussein's Arrest May Not Curb Terrorism"; 13:31: "Falling U.S. Treasury Prices; Saddam Hussein's Arrest Inspires The Attractiveness of Risky Assets".
Narrative fallacy: Confusing the relationship between "explanation of facts" and "facts" makes us think we have a better understanding of things. Let's fool ourselves with stories that fit our preferences for obvious patterns, pretending that the black swan phenomenon simply doesn't exist.
The way to avoid narrative fallacies is to emphasize experimentation over storytelling, experience over history, and objective knowledge over theory. Another approach is to predict and record the results of the predictions.
—Taleb, The Black Swan, Chapter 6
<h1 class="pgc-h-arrow-right" data-track="13" > confirms the fallacy: 1001 days of turkey</h1>
Imagine a turkey that is fed every day. Each feeding reinforces its belief that the general law of life is to be fed daily by friendly humans "for its best interests." And this concept has been continuously reinforced in the past 1,000 years.
On the 1001st day, the Wednesday afternoon before Thanksgiving, an unexpected thing happened to it, leading to a change of faith.
The history of the first 1,000 days of something won't tell you anything about the 1,001st day. —Taleb, The Black Swan, Chapter 4
When we were children, we watched a cartoon called "Suspected Neighbor Axe". When a man loses his axe and sees the neighbor's son, he suspects that he stole it, and then he constantly observes the neighbor's son and finds that his every move proves to be a thief. Later, he found his axe, and looked at the neighbor's son, and his every move did not look like a thief.
When we identify a certain idea, we tend to look for evidence that can confirm this idea, and even brain supplement such evidence, and consciously or unconsciously ignore the evidence that does not support this view.
Confirmation fallacy: Let's focus only on the part that is pre-selected from what has been observed, and from it the unobserved part.
The following is suitable for us to read repeatedly:
In all my experience, I have not encountered any... Accident worth mentioning. I have only seen one ship in distress in my entire maritime career. I have never seen a shipwrecked, never been in danger of crashing, and never been in any danger that could turn into a catastrophe.
—E.J. Smith, Captain of the Titanic, 1907
<h1 class="pgc-h-arrow-right" data-track="22" > survivor bias: planes flying back</h1>
During World War II, a group of scientists returned to the plane during the maintenance war and saw that the plane was covered with bullet marks. Among them, there are more bullet marks near the wing, while there are fewer bullet marks on the fuselage. As a result, many scientists have felt that the wing parts with many bullet marks should be reinforced.
There seems to be nothing wrong with that. However, another scientist has raised the question: whether the part of the fuselage with fewer bullet marks will be because... Most of the planes that were shot in the fuselage have crashed in battle, so we can't see it?
We have been texting in daily means: xx teacher recommends to you a stock that will open sharply tomorrow, please pay attention to it, the first day you did not take it seriously. The next day you received another recommendation message, and you looked back and saw that the one recommended yesterday had really risen sharply, and the blind cat had touched the rat. On the third day, on the fourth day, the same recommendation, the same big rise. Wow, this teacher is so accurate. On the fifth day, you put money into this teacher. On the sixth day, the loss was 10%, no one was accurate, the seventh day lost 10%, and then look... If it is a recommended futures, it is estimated that the loss on the sixth day is 50%, and the loss on the seventh day is 50%, which is only 25% of the principal you have invested...
Why is this so, on the first day, this teacher sent a recommendation text message to 1,000 people for different stocks, and according to the 20% chance of rising, there will be 200 people who received the recommended stock rise. The next day there will be 40 people to receive the recommended stock rise, the third day of which there will be 8 people recommended stock rise, the fourth day will be 1 person for four consecutive days of recommended stocks are up, the fifth day, this "survivor" funds invested in this teacher's account, whether it is a handling fee, is a share, or a customer loss service fee, this teacher used four days to send 1248 text messages, spent 20 yuan SMS package monthly fee, achieved huge gains.
These 999 people are the planes that did not fly back, which is the "evidence of silence", and those 1 person is the survivor, who analyzes the reasons according to the phenomena he sees, and ignores the reasons why he can see these phenomena, which causes the "survivor bias".
Survivor bias (evidence of silence): What we see is not necessarily the whole picture. History hides the phenomenon of black swans, leading us to have a false idea of the probability of these events occurring
We may love those success stories, but it's not right to take them too seriously because we don't see the whole truth.
People who lie in the graves of losers have the following in common: bravery, adventurousness, optimism, and so on, just like those millionaires. Perhaps the specific skills are different, but there is only one main factor that really makes the difference between the two: luck, just luck.
—Taleb, Black Swan, Chapter VIII
<h1 class="pgc-h-arrow-right" data-track="30" > game fallacy: coins are fair</h1>
Taleb once asked the fat Man Tony and Dr. John he knew the same question: assuming the coin is fair, asking 99 tosses, each time facing up, asking what is the probability of getting a reverse side next time?
Dr. John saw the hypothesis and thought that this time the coin toss was not related to the first 99 times, and that the odds of a positive occurrence and a negative appearance were equal according to the simple probability, both 50%.
Fat Tony, seeing the positive results of tossing 99 times and 99 times, directly questioned the concept of assuming that the coin was fair, and he was not restricted, he thought that the coin must have been manipulated. So the probability of a positive is 99%, and the probability of a negative is 1%.
Dr. John represents most of us "fools" whose minds are closed, thinking only within the framework of "simplified" knowledge and "known unknowns", ignoring the "unknown unknowns".
The fat Tony representative is what Taleb calls "smart people", open-minded, with a great curiosity about reality and what they have to learn, and they are not bound by rules.
Game Fallacy: There is little similarity between the uncertainty we face in real life and the simplifications we encounter on exams and games.
The eloquent Simon Fucher reveals our psychological preference for certainty. "We have been accustomed to receiving dogma since we left the matrix."
—Taleb, Black Swan, chapter 9
<h1 class="pgc-h-arrow-right" data-track="38" > know that there is a bias in our cognition and understand how unreliable we are, which is the first and most important step. Here's the constant exercise to make these concepts our weapons. </h1>
Don't deliberately create causal relationships artificially, but also prevent unconscious causal links. Don't look for corroborating evidence, but look for evidence of falsification, and ten thousand pieces of evidence that are confirmed cannot be used to resist the usefulness of one piece of evidence of falsification. Keep an open mind, develop a habit of questioning assumptions about events that have a major impact, and avoid being affected by negative black swans. The main thing is to constantly discover other fallacies in their cognition, and constantly improve their cognitive level to meet positive black swans.
Remember how superficial we are when it comes to probability (the mother of all abstract concepts). You don't need to do anything designed to improve your understanding of the things around you. First, learn to avoid "filtering errors."