Survivorship and other biases
- Where part 1 focused on the rare event this section focuses on biases.
- The monkey that types the Iliad on a typewriter (in the infinite monkeys on infinite typewriters thought experiment) is not likely to then write the Odyssey.
- Taleb asks how much of past performance can be used to predict future performance.
- The more data we have the more likely we are to drown in it.
- Beware - A small knowledge of probability can lead to worse results than no knowledge at all.
(a) The survivorship biases (a.k.a. monkeys on a typewriter) arising from the fact that we see only winners and get a distorted view of the odds
(b) the fact that luck is most frequently the reason for extreme success
(c) the biological handicap of our inability to understand probability