rational vc #050 - Fooled by Randomness: Nassim Taleb (Incerto Series)
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Jan 8, 2024 
Nassim Taleb discusses randomness, luck, and decision-making. Topics include Monte Carlo simulation, survivorship bias, skewness, System-1 vs System-2 thinking, signal vs noise, heuristics, and the importance of the book 'Fooled by Randomness'.
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Hindsight Bias
- Hindsight bias makes us attribute past events to specific reasons when it was randomness.
- Be aware of hindsight bias and don't overanalyze past events.
Survivorship Bias
- Survivorship bias focuses on successes, ignoring those who failed due to random factors.
- Acknowledge luck's role to avoid survivorship bias and giving flawed prescriptions.
Nero's Trading Strategy
- Taleb's trading strategy, like Nero, involved small daily losses and big wins on volatile days.
- This mirrors VC investing where most investments fail, but few succeed massively.