Nassim Taleb’s Incerto

The Incerto is a set of books written by Nassim Taleb, an ex-derivatives trader turned philosopher (slash) scholar of probability theory. The books comprise a latticework of concepts into one overarching idea or a philosophy on how to view the world.

The Incerto

  • Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (2001). In this book, you could say that Taleb is venting, still full of frustration after his days as a trader. He gives numerous accounts of how people misinterpret or are ignorant of the role of randomness in our lives.
  • The Black Swan: The Impact of the Highly Improbable (2007). In this book, Taleb focuses on our disability to forecast and how we miscalculate the impact of unpredictable events in certain domains.
  • Antifragile: Things That Gain From Disorder (2012). In this book, Taleb is more practical and offers his thoughts on how one can cope and deal with uncertainty.
  • Skin in the Game: Hidden Asymmetries in Daily Life (2018): Here, Taleb builds further on the concepts from Antifragile, but from a slightly more philosophical standpoint, covering topics such as honour, valour and the purpose of religion.

Other Books and writings

  • Dynamic Hedging: Managing Vanilla and Exotic Options (1997)

How to Cope with Uncertainty

The central theme of the books is how to cope with uncertainty and Taleb puts forth and discusses specific concepts that are threaded through the books and are combined into an overarching framework.

The main mental models that are discussed in the Incerto are (in a fittingly random order):

  • Randomness
  • Black Swan Events
  • Lindy Effect
  • Ludic Fallacy
  • Skin in the Game
  • Antifragility
  • Barbell Strategy
  • Fractals
  • Via Negativa
  • Green Lumber Fallacy
  • Moral Hazard
  • Bed of Procrustes
  • Teaching Birds How to Fly
  • Hammurabi’s Law

 

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