Some people make a fortune out of extreme risks. This is how.
I’ve been reading a bit of Nassim Nicholas Taleb lately.
This is the guy who wrote ‘Black Swan’ and pretty much singlehandedly coined the phrase ‘Black Swan event’.
(Apparently Black Swans are incredibly rare… unless you live in Australia.)
Anyway, he’s probably one of the world’s leading thinkers around risk, particularly in an investment context, and this felt like an interesting area where I could sharpen my saw.
But what I’m realising is that a lot of what Taleb says isn’t just financial advice… it’s life advice.
And that’s because Taleb isn’t really a financial guy, even though that’s where he made his money.
As his bio states:
Nassim Nicholas Taleb, born in Lebanon, started his career as a derivatives trader on Wall Street. Yet he publicly disdains the models promoted by the finance industry.
He is exquisitely credentialed, with a Wharton MBA and a PhD from the University of Paris, yet believes that academia produces insights that are far removed from the realities of the world, and that credentials are largely for show.
Nice. As someone with an economics degree, and I can definitely tell you that credentials are mostly for show.
But his central thesis is that the world is full of risk. It’s how we deal with risk that defines our fates.
And the way he sees it, humans come in three different types: fragile, robust, or anti-fragile.
Those who are fragile work hard to shield themselves from life’s messiness. They actively avoid risk of any sort. They contain themselves in the safe and comfortable.
The downside to this is that they are never exposed to experiences that will lead them to grow, to learn or to taste the richest fruits life has to offer. They are the proverbial ships that never leave harbour.
Those people who are robust are firm in the face of messiness. The weird complexity of life never touches them. They keep an even keel, never deviated from their course and who they are, no matter what life throws at them.
This sounds great, but Taleb reckons the downside is that they may be too strong – too rigid. When the world asks them to surrender and to evolve into a new way of being, they are too wedded to their old forms and old ways of being.
Finally there are people who are anti-fragile. These people engage with the complex messiness of life – they actively seek it out – and use it as a motivation, as a schoolroom to grow and to become more creative and resilient. They like to challenge themselves because they know that in these challenges they will realise what they don’t know and see where they’re weakness are.
The downside? There isn’t one. Taleb reckons being anti-fragile is pretty awesome.
It’s a mission to be a master of life’s complexity and messiness.
And given how the world is going, do we really have any choice?