Talib was the only one who predicted the 2008 crisis and bet on it with his own money. Categorizing always produces reduction in complexity. Metaphors and stories are far more potent than ideas; they are also easier to remember and more fun to read. Ideas come and go; stories stay. We are better at explaining than understanding. Narrativity can viciously affect the remembrance of past events as follows: we tend to more easily remember those facts from our past that fit a narrative. To avoid the ills of the narrative fallacy, favor experimentation over storytelling, experience over history, and clinical knowledge over theories. It is the asymmetry of the bonus system that got us into the 2008 crisis--no incentives without disincentives. Capitalism is about rewards and punishments, not just rewards.]

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Black Swan

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