Black swan - thoughts

Book " black swan"

Even though we're constantly making predictions about the future, we're actually terrible at it. We put far too much confidence in our knowledge and underestimate our ignorance. Our over-reliance on methods that seem to make sense, our basic inability to understand and define randomness, and even our biology, all contribute to poor decision making, and sometimes to "Black Swans" –  events we believe to be impossible but which end up redefining our understanding of the world.

Perhaps the best defense against falling into the cognitive traps we've seen is a good understanding of the tools that we use to make predictions, and their limitations.

While knowing our own limitations certainly won't save us from every blunder we'll ever make, it can at least help us to reduce our bad decision-making.

For instance, if you're aware that you are subject to cognitive bias, like everyone else, then it's much easier to recognize when you're only looking for information that confirms what you already believe to be true.

Likewise, if you know that we humans like to organize everything into neat, causal narratives, and that this kind of approach simplifies the complexity of the world, then you'll be more likely to search for further information to gain a better view of the "whole picture."

Just this small amount of critical self-analysis can help you gain a competitive advantage over others in your field.

It's certainly preferable to be aware of your shortcomings. For example, if you know that there will always be unforeseeable risks in pursuing any opportunity, despite how promising that opportunity seems, you'll probably be less inclined to invest heavily in it.

While we cannot triumph over randomness or our limited capacity for understanding the vast complexity of our world, we can at least mitigate the damage inflicted by our ignorance.