The Fallacy of Over Analysis and Speculation

Will the price go up? Will the price go down? Are we in a bubble? All are common questions that arise in the crypto community. People spend countless hours trying to forecast the future by taking into account news sources and background information to predict the value of a currency, stock, company etc. only to find that their efforts are in vain in the volatility of reality. Take for example the Cleveland Cavaliers winners of the 2016 NBA Championship, when the team was down 3-1 in the finals, a rare few would have bet on them knowing that no team had ever come back from such a deficit in the finals. The majority was proven wrong by reality.

Nassim Taleb describes the concept of the black swan in his book title The Black Swan: The Impact of the Highly Improbable. A black swan event is simply one that comes as a surprise. Taleb argues that often efforts to make systems less chaotic often result in fragility. Therefore trying to predict whether a system will succeed into the future based on past and background information is most likely not the best strategy. Embracing the volatility of the system from an analytical standpoint perhaps will have the greatest impact on your success and lead to an antifragilie system.

#nassimtaleb #antifragility