Okay the problem is you take something called a ‘detail’, say an anecdote, single random event, and by emphasizing it, making you think that that detail represents the ensemble.
For instance, in saying there are Neo-Nazis in Ukraine - how relevant is it to the whole? what is the proportion? There are unfortunately Neo-Nazis in most large countries, including in Russia. This is particularly acute when you’re facing nefarious agents that are spreading disinformation (information that’s deliberately spread to deceive) or unwitting redistributors of misinformation (incorrect or misleading information presented as fact). Similar to taking an all-or-nothing view, Taleb warns us against conflating details with the ensemble. If you really did invest in stocks in 1900, you probably would’ve bought into the developed markets of Imperial Russia or Argentina rather than the emerging United States, and most of the companies you bought into would have failed. Take the view that stock markets just go up in the long run - imagine how rich you’d be today if you’d invested in the stock market in 1900?īut this view is based on the stock markets and companies that have survived to this day. If we only see the survivors of an event, our brains assume everyone survived.
This means we ignore the effect of random chance, instead preferring to rationalise why something happened. Just listen to any political pundit explain why a shock election result was obviously going to happen. When we look back at things that have happened, it seems like they were inevitable. We also ignore probability when it comes to past events. Does this mean that most risk-takers become successful? Ask those whose risks failed. Studies show that most successful business leaders are risk-takers.
Our brains slip up in trying to find patterns to explain things. But what if you have thousands of successful business executives? Probability tells us that some of them must be successful only through sheer luck. If you see a successful business executive, they’ll tell you that the reason for their success is some combination of hard work and talent. We tend to see events as all-or-nothing, rather than shades of probability. These are the factors that cause us to process information incorrectly, and distort our views of the world: All-or-nothing view This causes all kinds of problems.Īccording to Nassim Taleb, people routinely mistake luck for skill, randomness for determination, and misinformation for fact. The mind tricks us into seeing patterns when there are none.
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