Essayists From The United States

"Many scientists... are... subject to such foolishness... One flagrant example is... global warming... These scientists initially ignored the fact that these [high temperature] spikes, although rare, had the effect of adding disproportionately to the cumulative melting of the ice caps. ...[A]n event, although rare, that brings large consequences cannot be ignored."

"In most disciplines... asymmetry does not matter. ...People in most fields ...do not have problems eliminating extreme values from their sample, when the difference in payoff between different outcomes is not significant ...A professor ...removes the ...s, and takes the average of the remaining ones, without ...being ...unsound. A casual weather forecaster does the same ...So people in finance borrow the technique and ignore infrequent events, not knowing that the effect ...can bankrupt a company."

"I have organized my career and business in such a way as to... benefit... I am profiting from the rare event, with asymmetric bets."

"Why do [people] confuse probability and expectation, that is, probability [vs.] probability times payoff? Mainly because much... schooling comes from examples in symmetric environments... the... bell curve... is entirely symmetric."

"Just as an animal could have survived because its sample path was lucky... free of the evolutionary rare event, the "best" operators in a given business can... One vicious attribute is that the longer these... can go without encountering the rare event, the more vulnerable they will be to it. ...[S]hould one extend time to infinity, then by , that event will happen with certainty—the species will be wiped out! For evolution means fitness to... only one time series, not the average of all possible environments."

"There is a saying that bad traders divorce their spouse sooner than abandon their positions. Loyalty to ideas is not a good thing for traders, scientists - or anyone."

"[T]hey share the traits of the acute successful randomness fool who, in addition, operates in the most random of environments. ...[T]heir bosses and employers shared the same trait. They, too, are permanently out of the market."

"[A]t any point in time, the richest traders are often the worst traders. This I will call the cross-sectional problem: At a given time... the most successful traders are likely to be those fit for the latest cycle."

"Veteran trader Marty O'Connell calls this the firehouse effect. ...[F]iremen ...who talk to each other for too long come to agree on many things that an outside, impartial observer would find ludicrous..."

"A trader's mental construction should direct him to do precisely what other people do not do."

"[N]ews... is full of noise and... history is largely stripped of it."

"Over a short time increment, one observes the variability of the portfolio, not the returns. ...[O]ne sees the variance, little else. ...Our emotions are not designed to understand the point. ...I deal with it by having no access to information. ...I prefer to read poetry."

"I... found a significant advantage in selecting aged traders, using as a selection criterion their cumulative years of experience rather than their absolute success... [O]lder people have been exposed longer to the rare event and can be, convincingly, more resistant to it."

"There are hordes of thoughtful journalists... [I]t is just that prominent media journalism is a thoughtless process of providing the noise that captures people's attention and there exists no mechanism for separating the two."

"[A]ge is beauty. ...[M]y instinct is to value distilled thought over newer thinking, regardless of its apparent sophistication—another reason to accumulate the hoary volumes by my bedside... For an idea to have survived so many cycles is indicative of its relative fitness. Noise, at least some noise, was filtered out. ...[P]rogress means that some new information is better than past information, not that the average of new information will supplant past information..."

"[H]istory cannot lend itself to experimentation. But... is potent enough... to eventually bury the bad guy. Bad trades catch up with you... Mathematicians of probability give that a... name: '. [R]oughly... properties of a very... long sample path would be similar to the Monte Carlo properties of an average of shorter ones. ...Those unlucky... in spite of their skills would eventually rise. The lucky fool... would slowly converge to the state of a less-lucky idiot. Each ...would revert to his long-term properties."

"A... vicious effect of... is that those that are good at predicting the past... think of themselves as good at predicting the future... [W]e live in a world where important events are not predictable..."

"I have two ways of learning from history: from the past, by reading the elders; and from the future, thanks to my Monte Carlo toy."

"My models showed that ultimately almost nobody really survived; bears dropped like flies in the rally and bulls ended up being slaughtered... But there was one exception... option buyers... could buy the insurance against blowup..."

"In the early 1990s... I became addicted to the various Monte Carlo engines, which I taught myself to build... The dividend of the computer revolution... did not come in... e-mail messages and... chat rooms; it was in the sudden availability of fast processors capable of generating a million sample paths per minute."

"From the standpoint of an institution, the existence of a risk manager has less to do with actual risk reduction than it has to do with the impression of risk reduction."

"[T]he mental probabilistic map in one's mind is so geared toward the sensational that one would realize informational gains by dispensing with the news."

"I do not dispute that arguments should be simplified to their maximum... but people often confuse complex ideas that cannot be simplified into a media-friendly statement as symptomatic of a confused mind. ...MBAs tend to blow up in financial markets, as they are trained to simplify... beyond... requirement. (...I am myself the unhappy holder of the degree.)"

"Mixing forecast and prophecy is symptomatic of randomness-foolishness..."

"[T]he epic poet did not judge heroes by the result... their fate depended on totally external forces... Heroes are heroes because they are heroic in behavior, not because they won or lost."

"Unlike a well-defined, precise game like Russian roulette, where the risks are visible to anyone capable of multiplying and dividing by six, one does not observe the barrel of reality."

"Lucky fools do not bear the slightest suspicion that they may be lucky fools - by definition, they do not know that they belong to such a category."

"Mild success can be explainable by skills and labor. Wild success is attributable to variance."

"Trading forces someone to think hard; those who merely work hard generally lose their focus and intellectual energy. In addition, they end up drowning in randomness; work ethics draw people to focus on noise rather than the signal."

"It does not matter how frequently something succeeds if failure is too costly to bear."

"Delivering advice assumes that our cognitive apparatus rather than our emotional machinery exerts some meaningful control over our actions."

"We should reward people, not ridicule them, for thinking the impossible."

"Much of the research into humans' risk-avoidance machinery shows that it is antiquated and unfit for the modern world; it is made to counter repeatable attacks and learn from specifics. If someone narrowly escapes being eaten by a tiger in a certain cave, then he learns to avoid that cave."

"It is now the scientific consensus that our risk-avoidance mechanism is not mediated by the cognitive modules of our brain, but rather by the emotional ones. This may have made us fit for the Pleistocene era. Our risk machinery is designed to run away from tigers; it is not designed for the information-laden modern world."

"You may not be able to change the world but can at least get some entertainment and make a living out of the epistemic arrogance of the human race."

"My major hobby is teasing people who take themselves and the quality of their knowledge too seriously and those who don’t have the guts to sometimes say: I don’t know...."

"Among the forces which sweep and play throughout the universe, untutored man is but a wisp in the wind. Our civilization is still in a middle stage, scarcely beast, in that it is no longer wholly guided by instinct; scarcely human, in that it is not yet wholly guided by reason. On the tiger no responsibility rests. We see him aligned by nature with the forces of life — he is born into their keeping and without thought he is protected. We see man far removed from the lairs of the jungles, his innate instincts dulled by too near an approach to free-will, his free-will not sufficiently developed to replace his instincts and afford him perfect guidance. He is becoming too wise to hearken always to instincts and desires; he is still too weak to always prevail against them. As a beast, the forces of life aligned him with them; as a man, he has not yet wholly learned to align himself with the forces. In this intermediate stage he wavers — neither drawn in harmony with nature by his instincts nor yet wisely putting himself into harmony by his own free-will. He is even as a wisp in the wind, moved by every breath of passion, acting now by his will and now by his instincts, erring with one, only to retrieve by the other, falling by one, only to rise by the other — a creature of incalculable variability. We have the consolation of knowing that evolution is ever in action, that the ideal is a light that cannot fail. He will not forever balance thus between good and evil. When this jangle of free-will and instinct shall have been adjusted, when perfect understanding has given the former the power to replace the latter entirely, man will no longer vary. The needle of understanding will yet point steadfast and unwavering to the distant pole of truth."

"Shakespeare, I come!"

"Liberalism, in the case of the Jew, means internationalism. If you listen to Jews discuss Jews, you will find they are money-minded, very sharp in practice. The Jews lack the fine integrity which at last is endorsed, and to a certain degree followed, by lawyers of other nationalities. The Jew has been in Germany for a thousand years, and he is still a Jew. He has been in America for all of 200 years, and he has not faded into a pure American by any means — and he will not."

"Art is the stored honey of the human soul, gathered on wings of misery and travail."

"If I were personally to define religion, I would say that it is a bandage that man has invented to protect a soul made bloody by circumstance."

"I acknowledge the Furies. I believe in them. I have heard the disastrous beating of their wings."

"Oh, the moon is fair tonight along the Wabash, From the fields there comes the breath of new-mown hay; Through the sycamores the candle lights are gleaming On the banks of the Wabash, far away."

"The happiest heart that ever beat Was in some quiet breast That found the common daylight sweet, And left to Heaven the rest."

"The rust will find the sword of fame, The dust will hide the crown; Ay, none shall nail so high his name Time will not tear it down."

"Who drives the horses of the sun Shall lord it but a day; Better the lowly deed were done, And kept the humble way."

"Not in the time of pleasure Hope doth set her bow; But in the sky of sorrow, Over the vale of woe. Through gloom and shadow look we On beyond the years! The soul would have no rainbow Had the eyes no tears."

"Dreiser wanted to write the next great American novel, and his desperation pervades https://en.wikipedia.org/wiki/Sister_Carrie Sister Carrie like an unsavory pit stain."

"Theodore Dreiser Should ought to write nicer."

"H. L. Mencken, A Book of Prefaces (1917), 2nd edition, pp. 86–87. (1st edition, 1916)"