Judge a decision by the distribution of outcomes it could have produced, not the one that happened to occur.
A strategy that made money in the world we got can still have been terrible across the ninety-nine we did not. The whole book is this sentence applied repeatedly.
Links
Typed edges. Anything below the line was authored on the other note and derived here.
prerequisite-of →Given enough participants, spectacular track records appear by chance alone — success is evidence of skill only after you count the entrants.The general principle from which the track-record argument follows. If outcome is a corrupted signal of decision quality, then a record of outcomes is a corrupted signal of skill.
contradicts →Pain + Reflection = Progress: pain is information about the gap between reality and your model.The sharpest methodological fight in the library. Dalio treats pain as information about a gap in your model. Taleb says the pain is often just variance, and reflecting on it teaches you superstition with the confidence of experience. Both cannot be the right default.
← supported byWe compress the past into stories that feel explanatory and predict nothing — coherence is not evidence.
The story is what hides the other branches. Once a coherent account of what happened exists, the ninety-nine worlds that did not happen become very hard to hold in mind.