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I have thoroughly enjoyed almost all of Nassim Taleb's books. This one (Skin in the Game) is one of my top 2 favorites due to how well it translates to real life practice.
For Taleb's books, I find his words to be one of the best ways to phrase his thoughts and ideas. Here are what stood out to me:
Those who don't take risks should never be involved in making decisions.
Tail: an extreme event of low frequency.
The best place to hide risks is "in the corners," in burying vulnerabilities to rare events that only the architect can detect...being far away in time and place when blowups happen.
Golden Rule: Treat others the way you would like them to treat you
Silver Rule: Do not treat others the way you would not like them to treat you.
What works cannot be irrational; ...if something stupid works, it cannot be stupid.
What matters isn't what a person has or doesn't have; it is what he or she is afraid of losing.
If you can't effectively sue, regulate.
Those who talk should do and only those who do should talk. .... Action without talk supersedes talk without action. - [Do more than you talk].
Things designed by people without skin in the game tend to grow in complication (before their final collapse).
Avoid taking advice from someone who gives advice for a living, unless there is a penalty for their advice.
Beware of the person who gives advice, telling you that a certain action on your part is "good for you" while it is also good for him, while the harm to you doesn't directly affect him. (This is asymmetry)
Skin in the game means: Do not pay attention to what people say, but what they do and how much risk they assume.
We may be better off in a narrowly defined accounting sense (aggregate) by exporting jobs. But that's not what people may really want. ... people might want to do things. Just to do things, because they feel it is part of their identity. ... It may be cruel to cheat people of their profession.
Yaneer Bar-yam showed quite convincingly that "better fences make better neighbors." ... Blaming people for being "sectarian" - instead of making the best of such a natural tendency - is one of the stupidities of the interventionistas.
The ethical is always more robust than the legal. Over time, it is the legal that should converge to the ethical, never the reverse - Laws come and go; ethics stay.
We have removed the skin in the game of journalists to prevent market manipulation, and in its absence, we find they imitate, to be safe, the opinion of other journalists, creating monoculture and collective mirages.
It is much more immoral to claim virtue without fully living with its direct consequences.
If your private life conflicts with your intellectual opinion, it cancels your intellectual ideas, not your private life.
If your private actions do not generalize, then you cannot have general ideas.
Suggestions for those who "want to help mankind" or "save the world":
Courage (risk taking) is the highest virtue. We need entrepreneurs.
Courage is when you sacrifice your own well-being for the sake of the survival of a layer higher than yours. Selfish courage is not courage.
The legal system and regulatory measures are likely to put the skin of the doctor in the wrong game.
A doctor is pushed by the system to transfer risk from himself to you, and from the present into the future, or from the immediate future into a more distant future.
Administrators everywhere on the planet, in all businesses and pursuits, and at all times in history, have been the plague.
I am, at the Federal level, Libertarian;
at the State level, Republican;
at the Local level, Democrat;
and at the Family and Friends level, a Socialist. -- Geoff and Vince Graham
Minority rule: the intolerant will run over the tolerant.
An intolerant minority can control and destroy democracy. Actually, it will eventually destroy our world.
Revolutions are unarguably driven by an obsessive minority. And the entire growth of society, whether economic or moral, comes from a small number of people. ... All that is needed is an asymmetric rule and someone with soul in the game.
Freedom entails risks - Freedom is never free.
Real people are interested in [commonalities and peace], not [conflicts and wars].
Historians and policy scholaristas are selected from a cohort of people who derive their knowledge from books, not real life and business.
Contractors are exceedingly free; as risk takers, they fear mostly the law.
Employees have a reputation to protect. And they can be fired.
The employee has a very simple objective function: fulfill the tasks that his or her supervisor deems necessary, or satisfy some gameable metric.
Someone who has been employed for a while is giving you strong evidence of submission.
A trader's expression: Never buy when you can rent the 3 F's: what you Float, what you Fly, and what you F...
Small is preferable, owing to what we would call in today's terms, scale properties.
People despise others who make a lot of money on a salary, or rather, salarymen who make a lot of money.
What [people resent (or should) is the person at the top who has no skin in the game] - by not bearing his allotted risk, he is immune to the possibility of falling from his pedestal and exiting his income or wealth bracket.
True equality is equality in probability. Skin in the game prevents systems from rotting.
[The way to make society more equal is by forcing (through skin in the game) the rich to be subjected to the risk of exiting from the 1 percent.]
It is downright unethical to use public office for enrichment.
Taleb predicted he would win - because Trump had visible deficiencies. Because he was real, and the public - composed of people who usually take risks, not the lifeless non-reisktaking analysts - would vote anytime for someone who actually bled after putting an icepick in his hand rather than someone who did not.
Fragility: Sensitivity to disorder
The only effective judge of things is Time.
Intelligence of Time:
Two ways to handle time:
Lindy: life expectancy lengthens with time, conditional on survival.
Fragility is the expert, hence time and survival.
Scars signal skin in the game.
Fragility is in the dosage: falling from the 20th floor is not the same risk category as falling from your chair.
Just as the slick fellow in a Ferrari looks richer than the rumpled centimillionaire, [scientism looks more scientific than real science].
True intellect should not appear to be intellectual.
Principle of simplicity - called antiscience.
It's easy to scam people by getting them into complications - the poor are spared that type of scamming.
We have evidence that collectively society doesn't advance with organized education, rather the reverse: the level of (formal) education in a country is the result of wealth.
All you need are shoes to run outside when you can and a barbell with weights.
Most gains in physical strength come from working the tails of the distributions, close to your limit.
People can only be social friends if they don't try to upstage or outsmart one another.
[People need to be equal, at least for the purpose of the conversation, otherwise it fails] - hierarchy-free and equal in contribution.
[Verbal threats] reveal nothing beyond [weakness and unreliability].
Change behavior of unethical and abusive persons: Take their pictures. Just the act of this is similar to holding their lives in your hands and controlling their future behavior thanks to your silence. They don't know what you can do with it, and will live in a state of uncertainty.
Survival comes first; truth, understanding, and science later.
Taleb's opinion is that religion exists to enforce tail risk management across generations, as its binary and unconditional rules are easy to teach and enforce.
How much you truly "believe" in something can be manifested only through what you are willing to risk for it.
What is rational is that which allows for survival.
When you consider beliefs in evolutionary terms, do not look at how they compete with each other, but consider the survival of the populations that have them.
...kashrut laws survived several millennia not because of their "rationality" but because the populations that followed them survived.
Not everything that happens happens for a reason, but everything that survives survives for a reason.
[Learn the effect of the difference between ensemble and time].
Recognize the probability of ruin approaches 1 as the number of exposures to individually small risks, say one in 10,000, increases.
Small injuries will be beneficial, never large ones - those with irreversible effects.