CRECER 2016 – Nassim Taleb On Fragility

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CRECER 2016 – Nassim Taleb On Fragility

CRECER 2016 – Nassim Taleb On Fragility

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This CTA Is The Best-Performing Hedge Fund This Year

InvestAs equity long/short hedge funds have struggled this year, managed futures funds have been able to capitalize on market volatility and generate some of the best returns in the hedge fund industry. The managed futures sector refers to funds known as commodity trading advisors, or CTAs, which generally use a proprietary trading system to trade Read More

0:15and as usual before we start out like to do a little test I was in moscow giving
0:25a workshop and the most translated as it is now and I was making cracking jokes
0:36and I noticed that people were serious child arrives at Rice leader did not
0:45translate my jokes I hope it’s not the same here as a translator
1:03we don’t have a clock so in the time so the next hour I’m gonna talk about
1:18anti-social and from there are about entrepreneurship how it connects but
1:29first let me explain how I got the idea of speciality I was an awesome trailer
1:38for a long time
1:39121 years as you can see I lost all my hair worried then after 21 years of
1:47trading I decided to have a life so I surround what do you do you know when
1:54you stop trading and unfortunately I’m not good at Tennessee chess board had
2:00bridge mad at you no stranger to you in the day so I ended up doing mathematics
2:06second career doing that trying to magnetize when I worked on before and my
2:12idea was to master thousand ocean of fragility based on an insight I had when
2:18I was an option trader which is that this is fragile
2:26why I wanted to answer that question
2:31I detected from my experience as an option cleaner that it was trying to
2:38show is because it had some kind of allergic reaction to volatility that was
2:44that was my speculation and wanted to check the southwest and once you man put
2:49his fragile than you can match the opposite of what life’s volatility while
2:55likes the Sun Cluster things and from there you can generalize the things and
2:59shine so but first let me tell you the other two people not the option traders
3:06when asked people what is the opposite of French and described fragile this
3:13breakable doesn’t want to be shaken it has a sign and you sending a package
3:20from western Mongolia to get the message that it should not be mishandled wanna
3:30ask people the opposite as they never tell me you know the right thing
3:36a specifically people give me that its robust the robustness not the opposite
3:43of fragile the robust you know doesn’t care is like people in New York
3:49Brookland they don’t care
3:51proves it on the great shots so then it hit me that we often traders had the
3:57name for things like volatility as opposite doesn’t like volatility and
4:03that back as I’m sending to Mongolia ok if it had the opposite opposite
4:10properties too fragile it would not be this it would be pleased mishandle on it
4:17you see please
4:20you know brutalized me as a package up to a point so came up with that idea now
4:26I was one or two years into my post rating life I’m slow so I started seeing
4:35hey you know perhaps I can such analyzing and it took me seven or eight
4:39years to finish the idea completely I’m slow actually I get there that there was
4:48an attribute to sayings that like disorders that like things and certain
4:53way and that one was very similar to packages we often traders had that like
5:01volatility so but when I go back to history I realize that the Greeks to
5:10effectively they may not have had the words
5:24as I said like you
5:26but it’s mostly known as represented by what means you shoot it comes back the
5:39way it was before
5:40not better not worse and of course a certain category we just discussed now
5:48when you look at financial packages they have the shape you make it make you make
5:56your make you make and then once in awhile he knows everything
6:01the picture is not your money so you just say hey you know it’s a mistake I
6:09want repeated but you keep your bonus or someone else’s money I repeated this is
6:13a fragile package sorry I’m not seeing anything here and someone who’s this I
6:18lost my sight so this is the fragile
6:25no upside or downside the second line an asshole not fragile this is in time
6:34series space and the third one is the answer is fragile as you can see small
6:42downside than upside the robust no big upside and downside of course the
6:51fragile small gains or no gain and big downside like the coffee cup not look at
7:00this you know I didn’t hear if there’s a
7:05quake doesn’t have an upside know so does like anything doesn’t like mistakes
7:11if I make a mistake handling it will break so from this we can generalize and
7:17look at a partnership thanks google translate another skilled
7:25helped a little bit but France so I call them the disorder others saw his shifty
7:32doom 3 I’d like to if you like one you like them all
7:36not widely adopted into effect in comp Plato conocimiento
7:44oportunidad house is the sort of the in like in Tokyo in camp or law this one as
7:56it does on impact or if you like one you like them all and you have to a point
8:05that you hate want to hit the mall and your fragile one
8:11incidentally is that why is it that when you don’t like this order is so then you
8:20don’t like time this time to explore this orders
8:26that’s it for example was time more things can happen so this coffee cup
8:32will not survive five thousand years from now
8:35probably will not be found but a stone outside
8:39will be there the way way is to now so now something that’s the property of
8:46everything organic the central idea in my book is that complex system and
8:56organic systems they love they love disorder why did you like the sort of
9:03remember you like stressors they communicate with their environment yes
9:08stressors so we have two paradigms the cat and washing machine and the central
9:17chapter is closed on the main difference between the cat and Washington people
9:25ask me why then I had this obscure titles to confuse journalists because
9:31you know I’m like Donald Trump you know I’d like to consider analysts so the
9:39year and also because of his to begin every the book just read the table of
9:43content and environment so I had that piece but there’s a central idea now
9:51what does that mean difference between a cat and washing machine that everything
9:55organic degrades
9:58under no flash please you see I’m fragile to flash flash flash so the
10:06concentration + attitude here you know so everything organic benefit from some
10:16kind of stressor whereas the washing machine if you go meet with a hammer on
10:23a washing machine will it improve know if you bank with your head on a washing
10:29machine will it improve know you handled improve the washing machine will not
10:35include and it’s a washing machine
10:40alone with a degraded not really ok maybe a little bit of oiling of the
10:49machinery so what happens with everything
10:52constructed top-down doesn’t like volatility everything made bottom-up
10:58loves disorder volatility stressors communications environments
11:03stressors so he saw the big mistake people make is to think of the economy
11:14as more like the washing machine then it is like a cat and the difference between
11:23the two is considering let me explain when you have if the economy constantly
11:34at the same level without any stressor without any problem with that any
11:38recession what happens haha what happens
11:45one analogy is considered a forest if you distinguish every single fire in a
11:53forest prevent the foursome having any fire zero tolerance for fires what
12:00happens in the forest flammable material will accumulate so and what will happen
12:11to the forest two-thirds of when the big one happens when it takes place same
12:17thing with the economy if you leave the economy alone it will have its own you
12:24know
12:24cleaning up if you maintain a constant temperature so to speak a lot of week
12:32friends will accumulate risks will accumulate and then of course 2008 will
12:37happen and we’ll still there
12:39change that’s the problem is taking the cat for a washing machine everything
12:45organic each variations dressers chaos chaos not too much a little bit to keep
12:52going so now the big mistake it’s the same that lowering risk and an economy
13:01is done by luring variability in fact lowering risk is done by increasing
13:08variability and increasing small wrists willing that entrepreneurial risk
13:16because they’re small risks smoked outside became a small risks but
13:23decreased the largest and that’s how we talk about it when arriving over those
13:30ratings of the Black Swan Cygnus I ask people
13:36compared to countries 140 governments some disorder other 11 government of the
13:48same period I should go to classes classes two countries one has the same
13:54family the other one had the same government and ask political scientist
14:002006 which countries more stable the one was forty government or the other one
14:04was the answer the one was one government over four years which one do
14:14you think of the country was one government area of the country the other
14:22one to saudi arabia gives you an idea the next pictures of Saudi Arabia was a
14:27country was 40 governments Italy last time I checked we still good still
14:37working much better looking than this so you realize that stressors are good for
14:43countries are good for a single life because of overcompensation like
14:49volatile so like if you wanna stay in good health
14:55this is a common structure you need bone in your bones want stress actually going
15:01to if you ever have the idea of going in space shuttle space missions spent six
15:07months
15:09your boss will come back to rate it now one problem that stock on society how
15:18our society understands risks everybody
15:24talks about post-traumatic disorder like there was war people have trauma they
15:30need treatment how frequent visits opposite posttraumatic growth 1211 1212
15:52experienced
15:54someone just proved it the oldest living person today is a harsh word survivor
16:00doesn’t mean we should check people to trauma that completely cocoon and it’s
16:10the same thing with the economy same thing was regular life because it looks
16:15like rose comes from over compensation I go to the gym I list the hundreds of
16:20pounds my money prepares to list
16:23$150 over compensation and actually I spoke quietly because you were both
16:38accomplished in increased concentration that anyone of you realize that the
16:42mccarthy attend to south side mount if you have trouble with a mathematics
16:47problem good to see you concentrate better because from over compensation so
16:54now let’s talk about the economic growth the idea is looking seriously that
17:01resources are good right
17:04have been devised something called the Dutch
17:07disease not a good idea to have resources
17:11step further by showing you that effectively if you want to have a
17:18prosperous nation countries city that’s what you need to have no resources the
17:27situations has 0 resources they went to place the head cover Cyprus mail us a
17:39cover the broadcasters to Cyprus from Cypress Hill chips to go dead copper so
17:49we have the ship’s less right to use them to sell the supreme or something
17:54and he got into commerce and effectively in no time they were in southern Spain
17:59just having trading volatile trading posts all around the western
18:05Mediterranean simply because it started off with no resources same thing with
18:11Singapore probably the most prosperous nation today is Singapore no resources
18:17there even have water for compensation
18:22Amsterdam and you can even compare the place and most pleasant place in the
18:28Persian Gulf oil to buy to compensate between the service economy and use you
18:37know the wealth of others so basically
18:41me if you deprive someone of resources like Venice they learn to turn water
18:46into gold should give someone gold that was you know what happened to Spain to
18:54give him gold in Spain right you give them water he had vanished so if you had
19:00to choose between Golden water water right so now sometimes you realize as I
19:08said
19:09benefits from the states now while the idea has to be something not
19:19particularly brilliant on my part because Netflix I don’t know if you know
19:24that’s lisa is here but Netflix has a chaos monkey which hats are all system
19:32continuously this aroma that tries to destroy their own system they said you
19:39know a lot of people who saw us the best thing is to try to destroy ourselves ok
19:45so figure out how to improve their system from continuous attacks by their
19:52own chaos monkey they understood and utility now let’s talk about technology
20:01we’re gonna get the technology option health even here is a good glimpse
20:04concerning the closing the so what we have here is before and after the
20:13dot-com crisis translated to Spanish but looks like the best thing that happened
20:19and software and hardware sectors in america was the year 2000 destroyed and
20:30rebuilt with a vengeance here now let’s talk about options
20:41little ones look at the shape of an option to buy it you pay $5 $1 whether
20:50you pay for it that’s all you can lose and how all the upside to a lot more
20:54upside than downside but the graphic showing you that lose a small and makes
20:58big consign small investment
21:03any point in time you have very little at risk and it can keep doing it the
21:08opposite of that is a fragile Anderson property of option is that you always
21:16make more when you’re right then you lose when you’re wrong now conversely
21:22the first 10 percent say you make a million the market goes your way
21:28second 20% you make twenty million see you have an accelerated profits while
21:34the fragile everything fragile has to have the opposite attributes let’s look
21:39at the stock price through the storm I’m not threatening please don’t call the
21:44police but the first released on anyone’s head there with her now if I
21:51broke up the stone has faith in pebbles are still hurt no not that much so
21:58basically you are fragile heart more than twice as much by a stone of five
22:05kilos then you are my stones to an ASCII
22:10acceleration and that’s a shame of acceleration yeah we have an
22:17acceleration
22:20anything that is fragile is disproportionately harm by large
22:25advanced more than small events and everything and the opposite properties
22:32she that acceleration exactly like an option if the if you are short
22:38volatility and the market went down 9 percent say you lost a million 20% you
22:48lose twenty million
22:49acceleration so you’ve harmed a lot more by large events than you do I love a
22:54smaller that’s that’s the property of everything fragile mystic mystery used
23:00to prove it was drinking a lot of costly colombian girl she has a right
23:05drink a lot of coffee try to prove it then end up leaving now based on that
23:11that the larger you are the more fragile you are or the Harmer the larger the
23:17harem the more you gonna be hard you can see it then objects around you seems
23:25don’t scale linearly because they get more fragile human doesn’t look like a
23:30small baby at large baby and baby does look like a small human
23:35why is it so because as you get bigger to get bigger you can become more
23:43fragile and figured out the Bible the big powers vastly more fragile than its
23:54equivalent and small houses
23:58likewise an Ellison
24:01vastly more fragile than amounts of fun elephant cells from here is gone that
24:09breaks relaying a mouse will always recover so now let me explain why
24:17because as I said 20 intensity twenties more harmful than twice the intensity of
24:241000 so fragile that run on the intrinsic properties of 25 July few
24:31minutes but this is a rule this is the last technical drafts arrests is going
24:36to be anecdotes any point in time you lose more than you gain since the
24:42market’s up 1% to make a dollar a month is down 1% you lose the less than $1 say
24:50we have a curve
24:52know it’s like an option and you are and official conversely the second 10% make
25:01you more than 10% of acceleration up to a point if on the other hand you have
25:06opposite
25:08negative sign in front of it your fragile so this is everything fragile
25:12everything and fragile so in other words I’m not going to give you a mathematical
25:17class was conduct ok for a very simple reason this number this ok accelerated
25:27benefits accelerated harm she and this explains why when an animal becomes
25:35bigger as more fragile
25:39why we have many more mice in New York City then we have had elephants in
25:43history politics and usually the memory stick and why is very large friends that
25:50do not survive but it depends what I mean large depends on a function is a
25:55large restaurant is a hundred tables
25:58large for car manufacturers as large as much larger so depends on the industry
26:06on the function banks need to be launched right restaurants cannot be
26:11large or larger than you need to be at risk because mistakes cost a lot more
26:17disproportionately fragile because of that structure cost a lot more now this
26:23comes from whatever rule these children well so now we’re getting into
26:29enterpreneurship and discovery you recognize asylum
26:37before this is commonly known as the wheel
26:45how long ago was a discovered six thousand years ago in West out turkey
26:55the loans and commercialization headed by the thousand years for this
27:04application from from this to this took six thousand years and no I was a
27:14student
27:15and therefore I don’t have a lot of money in the seventies had to carry my
27:19luggage travel like this because you don’t want to pay for what it is that
27:26ollie
27:27why did it take so long for someone to figure it out because discovery can be
27:32staring at you intellectually were not capable of imagining delete the pic you
27:37have to discovered by tinkering the optionality as let’s talk after now let
27:45me show something even more convincing this your closets not far from here this
27:55is in Mexico the premise that the mexicans built this is not have a wheel
28:02supposedly as a true that they did not have the wheel
28:11didn’t realize that you could use you can you can use this to building permits
28:20did not make the leap just like we looked at the wheel or six thousand
28:24years not realizing the luggage and attractively Steve Jobs did not advance
28:34that visual thing we just saw the application and let’s talk about the
28:39industrial revolution they said well they invented the steam engine is a true
28:43team Asian was invented hero of Alexandria had the exact there just to
28:52see the application say so let’s talk about the nation looks like we’ve had
29:03succession history come from businesses that loss mistakes benefit from their
29:13own estates you for the Pharma pharmaceutical ok it’s not going very
29:20well as an industry as well as an in the thirties will have absolutely no clue
29:26about why is it so because you look at the record bar mom and realize that they
29:35did very well because of long optionality on their mistakes
29:38someone makes a mistake it so happened that that mistake make some more money
29:44then then didn’t make a mistake
29:50example I’m sure
29:52you have heard three fatally about something called viagra viagra came from
29:59the committee said Donna said ok we have lot of middle aged a lot of older men in
30:06Florida and there’s a huge market for this know what was her side effects of
30:17hypertension medicine and the nurses on the eighth floor started calling it’s
30:25not exactly the stories actually just as funny but I don’t have time for a long
30:30story but something it now if you look at pharmaceuticals what we have
30:38thousands worldwide
30:48of these very few are you saw what they’re made for a very few and the ECG
30:58drugs even when they discover something for cancer that shrinks the blood supply
31:01to work for cancer or marginally but which perfectly for macular degeneration
31:07decidedly and of course a prime example is aspirin aspirin today is used as a
31:16blood thinner but initially it was designed as a fever reducer had malaria
31:24within a few minutes later and they noticed that as a side effect it was a
31:30pain killer Joe is used as a painkiller now it’s a blood thinner and that has
31:35forced another application I don’t know what this is
31:39businesses that love her mistakes
31:42and and and and basically our discoveries and farm all have decreased
31:50now that people stop tinkering and they started using an actual load and let me
31:56talk about the Philosopher’s Stone there’s two ways to approach a problem
32:01that’s it I want to make the perfect perfect perfect perfect I’m lebanese so
32:08let me pick homes ok perfect almost so there you go to Boston go to MIT and
32:17higher all the chemists taken on a driver and take her on her honor retreat
32:25and make him right now he questioned for the British Thomas and then some factory
32:34will implemented this one technique top down the other one is bottom-up cheap
32:42you go into your kitchen you take an existing homes recipe and you having
32:49regions and you start adding randomly and you taste if you like it
32:56it improves your home so all you need to know if you have to have the
33:02intelligence of realizing is that what you got this slightly better than what
33:06you had before and
33:10you don’t have anything to lose because if you were sent the homeless what do
33:14you do with it
33:15mother-in-law right so viciously northern side right direction upload
33:21outside so these are the two opposing matter what is top-down intellectual the
33:27others you look at the history of science and technology you take
33:34Wikipedia people define technology as an application of science to practical
33:39matters it’s the exact opposite science technology and say everything comes from
33:50tinkering actually and then distinct low backers so the Philosopher’s Stone
33:55that’s what I call the problem of lecturing birds how to fly
33:59also known as The Associated Harvard problem
34:06ok where you have a bunch of people lecturing birds how to fly and they have
34:11the illusion that burns listening to harvard professors learn how to fly
34:16under flying because they know you know they know the biology and now they say
34:21no that’s not what happens so basically that phenomenon lot of the technologies
34:26were discovered by the equivalent of today’s computer hackers bottom-up
34:31people think they can small raced down side as you saw your mother-in-law very
34:38small outside no big investment discovering something i’m looking up and
34:43seeing an application to the house so I did something here what kind of IQ
34:50because i dont have liked you but I think too much
34:55someone who’s tinkering look at this how much like optionality all you need to
35:03know is what it called ratchet up no like you to know what you discover that
35:07home which is better than the other
35:09incidentally this is how much other nations receipts other nations doesn’t
35:17have any claim
35:18making the British maybe it makes a lot of you know and the benefit from
35:23randomness of the environment so that things improve on their own one
35:27generation as time and even Mother Nature tales about 50% of the time so
35:35tinkering to approach a problem and its active sexually bias only an option to
35:42understand what you mean
35:44and all the options traders pulled me much rather be stupid and long options
35:50than smart and sort options and effectively I transformed into whether
35:57the anti-fascist then smart thinker tinker tinker tinker right so instead of
36:02on MIT just want you so you need a thousand IQ points to marcia thinker
36:09some may have now principal aprovechar la verdad como nope I hope my accent
36:19doesn’t turn you off so let’s look at history of companies in america
36:25origin they’re making rubber goods they just sort of senility someone they were
36:34not in prison isn’t going to see in a business plan to switch just what was
36:38whatever it was the math
36:40interestingly they believe their stories after after that I wasn’t feelin and
36:47everybody’s been morning what happened to Nokia was because you only had one of
36:52those ok we get them down but anyway a big success story as someone dominating
36:59cell phone markets in Europe completely murdered by Apple and and by by the
37:04koreans but time to start the records of another one reaching on their making
37:11refrigerators and they said they saw an opportunity if they’re selling books I
37:21think the shop sells more than books I know from personal use but was around
37:29department they’re making explosives but I guess that you know that
37:44you’re making explosives I don’t know if you realize that it’s not a huge market
37:47to sell two days this week and of course of chemicals to city that’s the best
37:55opportunity grabber they were making stationary as someone shows up
37:59pay you know I want legislation before the wedding engagement when they reach
38:04and from there on and wet weather boots must register with us and then he came
38:16to office now they sell the expensive stuff out the paper they saw proctor and
38:22Gamble course and boy can someone point they don’t say it you know they don’t
38:30say it they say they indirectly the family within the lumber business and
38:35one of them like airplanes and at a time ever in seattle is a capital for you
38:40know one of the family members got into airplanes for the senate ok you know
38:46what the middle left lumber and and and they started setting out plans so what’s
38:54your plan business plan not so you should not you should design your
39:02business plan for it not to be a prison
39:06those stick you can say I make hypertension drugs I’m not gonna do the
39:10viagra 2010 obscene vulgar armenians
39:17do no such onus on your family in other words an option for two years is not as
39:25valuable as two options of one year
39:30keep these options in your own business plan structure in other words make plans
39:35but have the option of exiting from and as short term as you can free up
39:45depends much more the value of an option on the structure that you have then on
39:52the business and let me give an example I’m sure by now you might have noticed
39:56you’ve heard of person double gold oil change dropped it is well know
40:02definitely well maybe not as wealthy as he thinks he is very rich how did he get
40:08rich is gonna come back to this let me ask you a question what’s the business
40:16at Los the most money for banks and United States real estate what’s a
40:23business that created the most Welsh for individuals in the United States real
40:28estate why the different financial contracts one had the upsides the other
40:34has announced I so have you heard of manufacturers hanover about chemical
40:40bank ok so manufacturers hanover went bust because they took the risk of the
40:47ultram 400 basis points
40:50donald Trump went bust they lost ever seen and one donald Trump which makes
40:57everything and minor solid basis points
41:00chemical bank bought manufacturers hanover and went down so they were
41:05astray by of course now they bartered JPMorgan Chase alright save my chase by
41:12Jim Russo chemical-chase
41:14same mistake so you realize it’s not so much the business they give you the
41:20opportunity but your contracts as well what kind of deal do you have up sidle
41:25up Chanel Dior know an option
41:28benefits from uncertainty the opposite a fragile so many interesting things about
41:37these individuals
41:39midline of money in real estate because the banks not knowing / Fannie Mae went
41:44bust they lost six hundred million much billion dollars as a lot of money even a
41:50lot of money giving homeowners fee options to be fine ass when interest
41:58rates are low they refinance when interest rates are high I’m a stuck with
42:03it so this option is OK or statements do not relate to the licentious on why like
42:15Microsoft Google Apple benefits from financing but should impose financial
42:22let’s take two steps here the first one to remember my paradigm wanna make the
42:29perfect hope that someone giving me a lot of money instead of thinking what I
42:34would’ve hired all these chemists and don’t know where but because I had no
42:39money I think learn more
42:41the slum the second lesson you learned from here is that Microsoft Google and
42:47Apple and Facebook as well as the others but what do Google Apple and Facebook
42:54haven’t commented Mike
42:58sorry Microsoft Apple and Facebook have in common is that the entrepreneurs are
43:07closed off house why
43:11well one lesson we can learn from this is that education is very good but it’s
43:18not as we said knowledge nicknamed the know how and when you increase if you
43:24force someone to finish his diploma he has more to lose and they don’t engaged
43:29into entrepreneurship so we are educated people at the high school level given
43:36technical skills even the world bank realize that think about microsoft said
43:44Bill Gates was a dropout so was varied and Apple of course tee shot drop off
43:54from school had they stayed at school together diploma maybe they would be an
44:04MBA working for morgan-stanley I’m certain he’ll gays would be a corporate
44:12attorney boring boring boring corporate attorney and we’ve had no computer
44:17revolution and St jobs because they have more to lose money have a big diploma
44:23and when you’re young
44:25the reason is to actively enterpreneurship works best when you’re
44:28young not because people are younger smaller but because they got less to
44:33lose so more option Lt because if you don’t have a degree you have less to
44:38lose money have an MBA from Harvard now you don’t go to work for McKinsey
44:43make half a million dollars $1,000,000 so what why bother was was always a risk
44:49I’m working 80 hours a week so that’s the first thing I noticed that the World
44:56Bank realized that figured out one thing and actually a guy who discovered the
45:01fifteen years ago but a dick 64 the World Bank I am slow they are very slow
45:0715 years turned to make it into the policy every country today that is rich
45:14has high degree of college education college I mean universi so people are
45:22prompted to think that university education causes when she checked
45:30opposite countries like Korea got rich first indications follows if you do the
45:39other way as they try to these chips people stop doing that two productions
45:43to stop tinkering and in fact the best investment is not in universities but an
45:49apprenticeship or people have so in the knowledge society isn’t so much the
45:54germans realize that everything is apprenticeship its nicknames and doing
45:59things not been thinking about the classroom
46:02my technique of homos rather than the technique of hiring MIT professors say
46:07so there is a balance between the two of course but typically countries that have
46:14had a lot of success and science are countries that got rich
46:20and even the size was developed outside universities tuk tuk got rich was
46:28thinkers aggressors adventurers who rediscovered scientific scenes and
46:36hobbyists the hobby scientists and then auctioning cameras start thinking
46:42credits like strangers have to fly so you have to be careful at the level of
46:48society the best investment you can make is high school and money in India so
46:53convinced of this point he said I’d rather have a thousand high schools and
46:57not one university I want to increase and he wants to teach people technical
47:02skills so they can tinker more and increase a model of apprenticeship that
47:07really killed all of Western Europe they respect knowledge because you know the
47:14light gurus but in fact that’s not really how they got there and then of
47:19course the success of Spanish but I put down don’t obscure onus
47:27obscenities right so the success option option option everything else should be
47:34there to favorites and work around it now
47:38ok I am totally confused with this technology is fragile have no idea how
47:42long he’s speaking because of not working fine but I assume from my washed
47:49out maybe five day notice ok so we can continue now with what I call the
47:54intelligence of time because I will link it to an idea of the commotion about
48:01technology and interesting properties technology you remember when I showed
48:06you the slide the puck the disorder druthers I told you what likes
48:11volatility like style what doesn’t like all tools she doesn’t like time for the
48:20fourth time is the best
48:21just have something works so let’s play the stock experiments that will help us
48:31understand how everything that is fragile
48:36ok will will will will not survive high hand and take it one step further this
48:43more interesting this your grandmother knows a lot more interesting when I see
48:47an old man with his grandson and assuming I would for insurance company
48:55had no idea is unconditional about these people whose lives the other the child
49:03or the grandfather who has a longer life expectancy to go
49:11child ok actually it’s not exactly today’s society yes and other societies
49:16not quite because I was shuttled mortality but the song now every day
49:23that the person you like to see decreases by a lesson today so if I live
49:3110 years from now because she was decreased by about nine years
49:35ok so here’s something to bring you live on less you have to live thats applies
49:44to everything that’s fragile because we humans are fragile but now let’s talk
49:50about technologies I have a young technology and an old technology which
49:56one do you think is likely to last longer
49:59the young or the old technology uses Yahoo
50:05ok I will discuss technology I’m live in these 3,200 years silent how all this
50:22technology
50:27Egypt it was so is this period is OK and then you can keep going this is a new
50:35technology without it assuming it’s the thing about technology that young
50:41technologies are very vulnerable because they get displaced by other technologies
50:48so let’s take the computer people tell me well our universe as computers
50:52computers talk to me a little bit used to have computers there are completely
51:00displaced by what Miami computers and then later on by you know and the subtle
51:05revolution California by the home computer remember the stop
51:12about 20 some years ago the desktop ran a role how many of you still use the
51:19stop the only reason to have a desktop as you want to store store employee just
51:24add the best it was replaced by a lot but the laptop and from what I can see
51:31in her room here looks like the desktop has been displaced by why you’ve been
51:36using take my picture the tablet
51:40no question how old is a tablet as a technology 5,000 years old they drive on
51:50it and then erased ok let me come back and explain my idea every year that it
51:58technology supplies provided still helping extend its life expectancy by
52:05two years this is strange that this is why because time was unable to destroy
52:13evidence that’s a speciality argument so if you gotta go into something find a
52:19variation technology you can produce a little better cheaper like the Chinese
52:24is probably what they do is pass and moved from southern lebanon to China
52:31make it cheaper and probably better technology you say is your technology so
52:38what happened this technology is that the
52:46the converging today to see we have had a will there’s a car
52:54depending how you define it calls my
52:59this is called The Linde effect from a restaurant called Lindy
53:03in the territory where people figure out the life expectancy of a theater
53:07increased every day every day that has survived
53:12show of the Broadway show as life expectancy increased so the linda’s
53:21factory calls and very high technology so if you define the car as we drive our
53:29ads with an engine so honest but some years old last month but if you find
53:35that are as a blue convertible 40 white mini convertible it’s just okay so if
53:43you define now the car as a box on wheels four thousand years old Texas so
53:52this
53:54very robust sorry this law then the effect is very robust no matter how you
53:59define technology and looks like with conversion think we’ve always had that
54:03the only when people tell me look the car is displacing the bicycles
54:07essentially the numbers the only country in which the selling more cars and
54:13bicycles China has two years ago now slowdown bicycle today is based on the
54:19car we have more bicycles in most countries than cars go to New York City
54:26how they’ve hit by something this cyclist not a car not a tax increase in
54:34taxi driver so this is how old you think a suspicion it’s not an Italian
54:44restaurant in bogota you know opened in 1964 people who came directly from
54:50Naples know this is a Roman Empire papi
54:57say we just do the same thing was probably the front material or better
55:04technology that’s it so this is the hindi aside from that notion of
55:10fragility is whatever is not fragile will be revealed by time and time only
55:17so looks like by now I can stop us summarize some rather than we stopped
55:24them we have many thanks for inviting me and I wanted to talk about optionality
55:30the ideas as an option trader you discover things started doing the world
55:38a certain way and I spent my time doing isn’t really creating ideas just putting
55:43together a coherent structure ideas that would observe a lot of people a lot of
55:49people say medicine improved by lockheed it’s not luck this convection it’s a
55:56personality because luck can be good or bad but when you hit by bad luck and
56:01have a shot now to you last left off you don’t care
56:05positive emotionality so this is not a complicated idea of some traders usually
56:11have night cubans barely room temperature they drink a lot of the rain
56:18by the time the 40 but they’re still just an option to get rich and was
56:24absent later then they start going into any business contracts longer satisfy
56:32short up now and unfortunately people who are dedicated they don’t understand
56:37shelton actual
56:40their group from MIT those wanna make the perfect almost writing the equations
56:44rather than thinkers who do things because they have low risk high reward
56:49so thank you for listening to me I’m honored to be here

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