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Brent Beshore @BrentBeshore
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Read Taleb’s new-ish book “Skin in the Game” this past week. Here are my top highlights/underlines, along with my (less valuable) accompanying notes. Curious what others took away.

Quotes are all Taleb's. Non-quotes are mine.
"It’s easier to macro-BS than micro-BS.”
“The general and the abstract tend to attract self-righteous psychopaths.”

Why it’s important to keep asking “why” until you reduce the macro to the micro. Reduces the hiding places of fools.
“You will never fully convince someone that he is wrong; only reality can.”
“By definition, what works cannot be irrational…If something stupid works (and makes money), it cannot be stupid.”

Experience discovers wisdom, because many more things sound correct than are correct.
“The curse of modernity is that we are increasingly populated by a class of people who are better at explaining than understanding.”

Impossible to separate articulate incompetents from experts without deep fluency and consistent observation over time. Pan flashes rarely endure.
“Avoid taking advice from someone who gives advice for a living, unless there is a penalty for their advice.”

The world is filled with helpers helping those who don’t need help in a way that isn't helpful.
"You do not want to win an argument. You want to win."

Need this tattooed on the inside of my eyelids —> Winning Arguments ≠ Winning
“Things designed by people w/o skin in the game tend to grow in complication (before their final collapse).”

Complication is the warning sign of impending failure. Perceived complication < than actual complication, so merely its presence should receive immediate attention.
“Skin in the game can make boring things less boring.”

Amen. Never thought I’d find working capital calculations, industry profitability benchmarks, or compensation structures fascinating.

Life should never be boring, b/c life's SITG is death.
“Have no assistant. The mere presence of an assistant suspends your natural filtering.”

YES! Not surprisingly, I find those with assistants to be more disorganized and far less connected to reality. Disconnect feedback loops and outsource judgement at great peril.
“Studying courage in textbooks doesn’t make you any more courageous than eating cow meat makes you bovine.”

Goes far beyond courage. Being well read is table stakes, not accomplishment. Thinking great thoughts is intellectual masturbation without subsequent action.
“The chief thing you can learn from, say, a life coach or inspirational speaker is how to become a life coach or inspirational speaker.”

Incentives for notoriety are whacky. Fame often comes from saying something incorrect with passion and confidence. Pop wisdom ≠ wisdom.
“One lauds merrily the merchandise to get rid of it.”

Those who sell hard are often those with the least desirable things to sell. "Once in a lifetime" opportunities come frequently.
“Counterintuitively, the more regulations, the easier it was to make money.”

Despite loud and persistent rhetoric, regulation usually helps incumbents and harms consumers by removing competition. Big hearts and small minds often harm the very people they're trying to help.
Ideologies are scale-dependent.
“It is much easier to do business with the owner of the business than some employee who is likely to lose his job next year.”

Predictability lowers transaction costs. Especially important in complicated, long-dated situations. Tenure becomes a currency.
“Scars signal skin in the game.”

Walking scars are beautiful and evidence of hard-fought wisdom and perseverance. Only voyeurs are scar-free.
“Envy does not travel long distance or cross many social classes. Envy does not originate with the impoverished, concerned with the betterment of their condition, but with the clerical class.”

Most dangerous envy is peer envy. Intense envy is a luxury.
“Traders, when they make profits, have short communications; when they lose they drown you in details, theories, and charts.”

Win = Me; Lose = Luck. The greater the justification, the higher the likelihood of culpability.
“Science is fundamentally disconfirmatory, not confirmatory.”

Science doesn’t prove. It disproves. Science is a tool of reduction, not addition.
“The one who doesn’t look the part, conditional on having made a successful career in his profession, had to have much to overcome in terms of perception.”

The “odd” one is usually far more skilled. Pay attention to outliers of appearance, manner, and style.
“A business plan is a useful narrative for those who want to convince a sucker.”

And usually the sucker is the person who has been told to put together the business plan.

Beware of those bearing business plans, or more generally useful narratives.
“The minute one is judged by others rather than by reality, things become warped.”

Because incentives, biases, and politics obscure reality’s feedback loops.

Gatekeepers keep gates far worse than a crowd of buyers.
“Poison is drunk in golden cups.”

Nothing, and I mean nothing, comes without opportunity costs, including what the world tells you are the goals.

Opportunity cost of success is invisible until it's deadly.
“If your private life conflicts with your intellectual opinion, it cancels your intellectual ideas, not your private life.”

Amen. See chapter on Karl Marx in “Intellectuals” by Paul Johnson.

But, we're all partially closeted hypocrites trying to bear good fruit.
“If you want peace, make people trade.”

Capitalism humanizes. Wonder how the ease and anonymous nature of the on-demand economy interferes with this?

Farmer’s market transmits empathy far better than AmazonFresh.
“Journalism is about 'events,' not absence of events.”

Silent majority of progress is rarely reported.
“Not everything that happens happens for a reason, but everything that survives survives for a reason.”

Yes, but heavily time weighted. Easy to confuse short-lived survivals for success, new business models as revolutionary, and outliers as trends.
“In a strategy that entails ruin, benefits never offset risks of ruin.”

The short stack must play suboptimally. Play at the highest stakes table where your ruin is likely to be exceedingly rare.

/fin
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