You are much less in control than you think

We love to think we’re in control, actually, up to a certain extent we must to think that way, in order to live our life reasonably adjusted and with some ability to plan into the future.

What if we were not that much in control? What if all the news we read, and the reasons we come to believe are causes to events that occur, are really just an illusion that we create to make sense of things in a world that is simply randomness unfolding?

This is the interesting and controversial interpretation of my reading into Nassim Taleb’s work in Fooled by randomness, a book targeted to investors and coming from a Wall Street professional, that to me, has interesting implications regardless of the field in which you operate.

Fooled by randomness is Taleb’s first literary work, and it evidently set the foundation to his second and world renowned book The Black Swan.

I must admit I went in with a different expectation, I’m quite interested in the stock market, and I found his book as a recommendation for investors, however the insights I got from it are much more widely relevant.

Hindsight is 20/20

We have a natural bias to dig for reasonable causes after we’ve experienced some effect. Our human build up makes us great at this too, we can identify patterns everywhere, regardless of whether it makes true rational sense or not, from faces on the surface of Mars to Jesus in crackers, we are built to construct known and understood views our of the unknown, and that is not different when it’s about looking into the past.

There’s a usual saying: hindsight is 20/20 - what it means is, everything is perfectly clear once we look back, it all makes sense and we just couldn’t see it clearly as it was happening. The interesting proposition is, if one looks hard enough, wouldn’t there always be some reasonably way to align any set of events towards building that justification?

The more complex and intriguing alternative to this is, once we’ve built our own story as to why something occurred, will that drive our own behavior to repeat those patterns in the future, further reinforcing the illusion?

Casinos, probabilities and life

As I mentioned Taleb’s life outside his authoring persona involves the stock market, however he follows an interesting approach that also exposed me to new information: Monte Carlo simulations.

The thing about events in our real world is that everything is uncertain, and anything that you do will define a new probable path for your future reality to look like.

Now, don’t get me wrong in thinking I now really understand how Monte Carlo Simulations work, I don’t, but I do find fascinating the better outcome in predicting possible results when using a method that works with uncertainty and randomness, as opposed to deterministic mechanisms such as our own judgement and intuition.

However, life is not one in which we can be putting every decision we make through computationally expensive processes that may result in a better chance of us getting our way - and this is why we leverage heuristics in our day to day, to ease the burden our organic CPU has to endure to function.

And now we have to consider our emotions. There is a big emotional component to how we make decisions and how we interpret the past looking for find meaning into the future. Emotions, desires and non-rational pathways are strong drivers of our interpretation of the world, and they skew our thoughts and decisions.

So, what is one to do with these insights?

You’ve come this far into reading my interpretations from Fooled by randomness, so let me send you away with three takeaways that I hope are valuable and actionable moving forward.

First: be aware of these patterns, and if you have a few spare cycles in your day, learn how these heuristics work. I think realizing when one is following an irrational line of thinking just because our mind is programmed to take a path of lesser resistance is very important in making solid judgement and decisions.

Second: Don’t always believe the news, particularly those pertaining to the stock market. Do your own due diligence and take the opportunity to constantly reinterpret.

Third: Keep a flexible mind, give yourself the opportunity to think and rethink, even within contexts you currently find “impossible”, because you might just be looking outside your conditioning and might see things from a different light, allow yourself to think beyond what you currently consider reasonable.

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