SamuelBRoberts said:
Meh. Taleb's advantage over other people is that he's really fucking smart and his ideas are really good.
Lots of people made serious money in crypto using Taleb-style strategies.
Lots of us also made serious money in crypto not using Taleb-style strategies.
The green lumber fallacy is the idea that knowing ABOUT a thing is the same as knowing HOW TO MAKE MONEY off of a thing.
I had a similar joke I told back in the bullrun. "How do you tell if a trader loses money?" "Ask him if he's read the Bitcoin whitepaper."
This was a trap that a lot of traders fell into. They thought that knowing about a coin was the same as knowing whether its value would go up or down. So you had people who could quote the bitcoin whitepaper (The technical document that described how bitcoin worked) chapter and verse. They knew how fees were calculated. They knew the history of Bitcoin, and had all kinds of ideas about who Satoshi might be. They knew what hashing algorithm BTC used for its private/public key pairings. Etc. etc. And they spent ENORMOUS effort learning all this.
None of that shit makes you any money.
When I started, I was one of these people. I would spend hours reading altcoin whitepapers. I watched hours of indepth interviews with shitcoin developers, trying to get a good sense of the company's internal workings, whether their partnerships they claimed were legitimate, what the eventual demand would be for the product and what competitors they might face, etc.
I lost a ton of money. During the period from like June to August of 2017, I followed that strategy and did embarrassingly poorly.
You're partly right and partly wrong.
I also followed the same strategy you did, reading white papers etc. Only difference is I did it way before the entire bull market exploded. I got into crypto in late 2016, banked hard on Ethereum based on the whitepaper and made helluva lot more money than traders who came in mid-2017. Even today, in this crypto bear market, I'm making a boatload of money from solid projects that are offering staking rewards. Staking rewards is something that I imagine will catch people by surprise next bull-run (assuming another bull-run happens of course)
The green lumber fallacy is mostly applicable to day traders, not value investors. The book Taleb got the idea from ("What I learned losing a million dollars") is written by a commodity trader, not a long-term investor. It's actually a fantastic book and one I recommend over Taleb's books. The author, Jim Paul, talks in detail about the psychology of making money - which I found infinitely more useful than the "green lumber fallacy", which was merely a paragraph in Paul's book.
If you play a game similar to value investors like Warren Buffet, the green lumber fallacy is not a fallacy at all but an absolute necessity to know what the thing is to make money off it. You weren't wrong about IOTA - it's a joke project and doomed to fail in the long-term. But you tried making money being reasonable in the most unreasonable era, namely during the crypto bubble.
My guess is that had you come in 6 months earlier in the crypto world, you would've had a different story to tell. And it really depends on what game you want to play. If you're a trader who wants to quickly come and get out, by all means green lumber fallacy is what you need. If on the other hand, you're like me and you already made 50x on ETH by June 2017 and you're currently banking on other projects which have a very good shot of 20-50x before the next bullrun, focusing on fundamentals is key.
And more broadly speaking, I do like Taleb's ideas, but like the green lumber fallacy, they often seem to be very limited in practical scope and derived heavily from his experience as a trader.
In regards to limitations:
There's a ton of amazing ideas in his books. Honestly, I feel that antifragility is overrated, in that many people give it more importance than it deserves. Very, very few systems are antifragile, and it's hard to actually apply the concept in every day life.
Taleb's real key insight was distinguishing "fragility" and "resilience" and realizing that these things aren't what they appear.
A wealthy banker making 150k a year might seem to be better off than a poor taxi driver making 30k, but all it takes is one layoff and that banker is FUCKED, whereas nobody can take the taxi driver's living away from him. The driver is resiliant and the banker is fragile.
This isn't a super new insight, but the way he presents it really makes you analyze whether your own situation is fragile or resiliant.
I know you got that banker/cabbie idea directly from his books, but I think you can agree it's not a good example in light of Uber and self-driving cars. Taxi drivers seem extremely fragile to me in 2019.
https://www.wired.com/story/why-are-new-york-taxi-drivers-committing-suicide/
On March 16, Nicanor Ochisor, a 65-year-old yellow cab driver, took his own life in his Queens home. According to his family and friends, he had been drowning financially as his prized taxi medallion, on which he had hoped to retire, plummeted in value.
If that's supposed to be resilience, sign me up for the fragile wealthy banker job. At least if I'm a banker, there's a chance the government will bail my ass out. Or shit, I might even be able to pivot and join a startup or some other high status job.
And not like Uber drivers themselves are resilient seeing how Uber is hell-bent on self-driving cars.
And here's the thing. It's fine that his ideas are actually limited in scope. There are very, very few ideas that are so great, they apply in a majority of cases.
The problem is that Taleb doesn't see the limits of his own ideas, as partly evidenced by blocking/calling an idiot everyone who disagrees with him.
I would recommend everyone to read his books, just to get a different way of thinking about stuff. But as I've gotten older...for every idea Taleb has, I can think of a pretty important situation where his idea would fail catastrophically.
He comes in with the life experience of a trader and a real hard-on for Mediterrean culture. It's a bit amusing to see someone who is so deeply influenced by his background espouse his ideas as almost universal generalities.
I remember he wrote in his book how the difference between stoicism and buddhism is that stoicism has attitude. Lol, no. The real difference is that stoicism comes from the same part of the world he does and that's really why he likes it more.
Beirut said:
Anyone refuted Taleb's article about IQ and the statistics he presented?
If in fact its true that low IQ is a reliable indicator of failure but high IQ not a reliable indicator of success then thats a pretty important distinction to make.
My own personal experience agrees more with Taleb's view so interested to see if facts back it up.
As for his abrasive style, he's Lebanese. Thats how we argue.
We need to take a step back and think about why Taleb went about attacking IQ.
He's very sensitive about IQ, or more specifically, national IQ since it's a common argument used by people on the right against third world immigration. Taleb - being an immigrant himself from Lebanon, which apparently has an average IQ of 82 - would understandably not like this point.
Taleb really dislikes race realism and discussions about race vs. IQ.
So keep that in mind. He makes some valid arguments, i.e. IQ isn't the end all be all. But he throws the baby out with the bathwater.
The most epic argument I've ever seen in favor of IQ is by Lagriffe du Lion:
http://www.lagriffedulion.f2s.com/
Read it from bottom to top.
Even if you only read the bottom 5-6 articles, you'll quickly grasp where IQ's actual strength lies - i.e. in predicting differences between large groups (this is where bell curves work wonderfully).
The real crux of IQ isn't in the Taleb gotchas by showing minimal income differences between an IQ of 110 and 140. It's in the differences in IQ between racial groups and how that percolates through in the statistical distribution of groups in categories such as violent crime statistics (lower end of IQ) and percentage of Nobel prizes won (higher end of IQ).
Taleb is pulling a real slick one by focusing on individual differences at the upper end of the IQ spectrum. By doing so, he's challenging the entire science of intelligence testing and thereby trying to negate how racial differences actually play out.
So you can bet your ass now that if someone now tries to bring up racial IQ differences, they'll point to Taleb's criticisms of IQ. In that sense, he's accomplished his mission.
But that said, I have yet to see a convincing argument refuting what Lagriffe has written. I've seen some prominent people like Steve Sailer tweet about Lagriffe. I do find it interesting that I haven't seen Taleb address Lagriffe directly. I doubt he ever will.
I agree with Taleb about IQ tests. I think they are way to simplistic
Sherman, I highly recommend the 30+ articles Lagriffe has written if you think they're way too simplistic.