THE BED OF PROCRUSTES (BY NASSIM TALEB)

Philosophical and Practical Aphorisms

Greek mythology contains many fascinating stories, one of which involves a man named Damastes, better known as Procrustes. He lived along a road that connected Athens and Eleusis. Procrustes had a peculiar way of treating his guests. Instead of being hospitable, he offered a night’s stay in a bed designed to perfectly fit them. However, if a traveler was too tall, Procrustes would chop off their legs, and if they were too short, he would stretch them.

This tale highlights a broader problem: the danger of forcing complex realities into simplistic categories. In his book, Nassim Taleb shares insights through aphorisms that challenge conventional thinking in areas like economics, investing, and career choices. By exploring these aphorisms, you can gain valuable perspectives that encourage deeper understanding and personal growth.

Procrustean Bed in Greek Myths

In Greek myths, there was a place between Athens and Eleusis where a man named Damastes lived. He offered travelers a strange form of hospitality. Instead of kindness, his estate was known for capturing unsuspecting visitors.

Damastes had a unique bed designed to fit each person perfectly. If someone was too tall, he would cut off their legs. If they were too short, he would stretch them. This brutal method earned him the nickname “Procrustes,” which means “the stretcher.” This tale serves as a warning about the dangers of forcing things to fit into narrow standards.

Many people try to simplify complex ideas into neat categories, similar to Procrustes’ method. While it may seem easier, it’s often misleading. Using rigid models can give a false sense of security instead of true understanding.

Summary of The Bed of Procrustes

In Greek mythology, there was a man named Damastes living on a road between Athens and Eleusis. He was known for his cruel hospitality toward travelers. Instead of adjusting the bed to fit individuals, he would modify them to fit his bed. Tall travelers would have their legs chopped off, while short ones were stretched. He earned the nickname Procrustes, meaning “the stretcher.”

Nassim Taleb wrote a book called The Bed of Procrustes. It shares ideas on how people often try to simplify complex reality into easy categories, which can lead to misunderstandings. The argument that these models are “better than nothing” is misleading. It is often safer to avoid using flawed models altogether.

The book is different because it uses aphorisms. Each saying addresses or counters this simple way of thinking. Here are five important takeaways from Taleb’s work:

1. Thoughts on Economics and Economists
   • Both the left and right have flawed views on economics. Markets and models both lack understanding. Economists may not fully grasp how unpredictable groups can be compared to individuals.
2. Successful Investing
   • Focusing only on what you know can lead to mistakes. If something seems off, it usually is. Viewing risks as opportunities is important, but what others label as low-risk might be a trap.
3. Choosing Your Career Path
   • The most harmful addictions include a steady paycheck. Karl Marx understood that controlling an individual through employment was more effective than outright slavery. Many lose their sense of freedom when entering the workforce.
4. When Trading
   • Being good at making money without managing risk is like being a surgeon who fails in crucial moments. A common mistake is to complain about flaws in humanity instead of using them to gain advantages.
5. How to Achieve Success
   • To predict your success compared to others, count the number of enemies you and your peers have. It’s more beneficial to find people you don’t want to be like than to look up to role models.

Taleb’s direct style can be provocative. If you feel offended by some ideas, it’s likely he meant to challenge your thinking.

Sayings About Economics and Economists

• The left thinks markets are foolish, so models should be smart. The right believes models are foolish, so markets should be smart. Both sides fail to see that both markets and models are quite foolish.
• Economics struggles to accept that the collective and the aggregate are much harder to predict than individuals.
• An economist can be described as:
  1. A businessman who lacks common sense
  2. A physicist who lacks intelligence
  3. A speculator who lacks courage
• The idea of focusing on what you know, rather than what you don’t, is known as the sucker’s trap in investing. If a stock price seems a little off, it is. If it seems very off, your evaluation method is likely wrong.
• What is often called risk can be seen as opportunity. The term “low-risk opportunity” might just be a sucker problem.
• The three most damaging addictions are heroin, carbohydrates, and a monthly salary. Karl Marx understood that a person can be controlled better by convincing them that they are an employee.
• Many people start to feel trapped when they leave the freedom of college for the isolation of jobs and families.
• Saying someone is skilled at making profits but not good at managing risk is like saying a surgeon is great except when patients die.
• Many people complain about mankind’s flaws and biases without using them to their advantage.
• When someone claims, “I invest for the long-term,” it often means they’re losing money.
• To predict your success relative to someone else in ten years, count your enemies and their enemies, then square the ratio.
• Instead of focusing on role models, look for anti-models—those you do not want to become.
• There are two groups of people: those who aim to win and those who aim to win arguments. They are never the same.

Insights for Successful Investing

1. Economic Perspectives
   Both sides of the political spectrum often ignore a crucial truth: markets and models can be equally flawed. The left believes smart models can fix market stupidity, while the right thinks smart markets can make up for model failures. Remember, the unpredictability of groups is often greater than that of individuals.
2. Understanding Investment Risks
   Don’t fall into the sucker’s trap by focusing only on what you know. When assessing stocks or opportunities, if something appears even slightly off, trust your instincts—it likely is. What is often called risk by others can actually be seen as opportunity. Just avoid the so-called “low-risk opportunities,” which might lead to significant problems.
3. Career Choices
   Be cautious of the three major addictions: heroin, carbs, and a steady paycheck. A wise observation reveals that people can be controlled better when they believe they are employed rather than enslaved. Life tends to change dramatically once you transition from a free college environment to the confines of work and family obligations.
4. Risk Management in Trading
   Being good at making a profit doesn’t mean much if you can’t manage risk. It’s essential to understand that merely complaining about the flaws of mankind won’t help you succeed. If you declare you’re investing for the long term, consider this: it might mean you’re actually losing money in the process.
5. Path to Success
   Assess your future success by counting your enemies and the enemies of those you’re compared to, then square that ratio. Instead of looking too close at role models, look for anti-models—people you want to avoid becoming. Understand that there are winners and there are those who only seek to win arguments. These groups are rarely the same.

Suggestions for Selecting a Career Path

Choosing a career path can be challenging. Here are some important points to consider:

• Addictions to Avoid: Be wary of falling into habits that can limit your freedom. The three harmful addictions to recognize are:
  • Heroin
  • Carbohydrates
  • A monthly salary
• Perspective on Employment: Think critically about the nature of employment. Karl Marx noted that people are often controlled better when they believe they are just employees. Understand that this belief can restrict your personal growth.
• Transitioning from College: After college, many face a significant change. The freedom and social life can shift into a more isolated professional life, which can impact your motivation and happiness.
• Choosing Influences: Instead of focusing solely on role models, consider identifying anti-models. Look for individuals you do not want to emulate in your career. This approach can guide you in making better choices.

Stay aware of these factors as you decide on your career path.

Guidelines for Trading

• Market Perception: Understand that both models and markets can be flawed. Don’t assume one is smarter than the other. Keep this in mind when forming your trading strategies.
• Evaluate Risks: When looking at stock prices, if something seems slightly off, it’s usually a sign. If it looks extremely off, reconsider your method. What others label as risk can often be a real opportunity.
• Career Choices: Be cautious of routine jobs. They may provide stability but can also lead to complacency. Seek paths that promote growth and creativity instead.
• Risk Management: Profits without effective risk management are not true successes. It’s easy to point out flaws in trading, but use them to your advantage.
• Anti-Models: Instead of just looking for role models, identify those you don’t want to emulate. This will help refine your approach and mindset for success in your journey.

Keep these guidelines in mind as you navigate your trading activities. They can help you find clarity and make better decisions.

Ways to Achieve Success

1. Economists and Their Views
   • Markets and models both have significant flaws.
   • Understand that individuals are less predictable than large groups.
2. Investing Smartly
   • Focus on identifying true opportunities rather than what you believe is safe.
   • Be cautious when something appears mispriced, as it may indicate a flawed evaluation.
3. Career Choices
   • Recognize that normal jobs can lead to a loss of freedom.
   • Aim to maintain the creativity and social interactions typically found in college life.
4. Trading Wisdom
   • Managing risk is as critical as making profits in trading.
   • Long-term investing often leads to losses; stay aware of market realities.
5. Path to Success
   • Evaluate your potential success by counting your challenges and comparing them to others.
   • Learn from those you do not want to emulate rather than only from role models.

Thoughts on Nassim Taleb’s Writing Style

Nassim Taleb’s writing is impactful and often challenges conventional thinking. He uses aphorisms that strike at common beliefs, making you reconsider your views on various topics.

Here are some key points from his writing:

1. Economics Insights:
   • Both sides of the political spectrum fail to grasp that markets and models can both be flawed.
   • An economist often lacks practical wisdom and insight.
2. Investing Wisdom:
   • Focus on what you don’t know rather than what you do.
   • Misjudging a stock’s price can reveal a flaw in your evaluation methods.
3. Career Choices:
   • Several dependencies in life, like a salary, can be as harmful as severe addictions.
   • Many slip into complacency after leaving a vibrant college life.
4. Trading Principles:
   • It’s crucial to manage risk effectively; profits mean little without proper risk management.
   • Long-term investment often leads to losses rather than gains.
5. Paths to Success:
   • Assess your future success by understanding your competitors.
   • Recognizing who you don’t want to emulate can be more beneficial than idolizing role models.

Taleb writes with a bold and often provocative style, aiming to make you think twice about easy assumptions. His approach may challenge some, but it encourages a deeper understanding of complex issues.

Final Thoughts and Recommended Reading

Nassim Taleb’s work, especially in The Bed of Procrustes, presents insightful aphorisms that challenge how we perceive reality. Here are some key takeaways:

1. Economics Critique: Both sides of the economic debate miss a crucial point. Models can be as flawed as markets. Economists often lack practical knowledge and may not grasp the unpredictability of collective behavior.
2. Investment Insight: The risk perceived in investments can often be an opportunity. If something seems mispriced, trust your evaluation technique. Low-risk perceptions can lead to poor decisions.
3. Career Considerations: Some types of dependence, like a steady paycheck, can limit personal growth and freedom. It’s important to recognize the trap that comes with salaried positions compared to the freedom of other paths.
4. Trading Mindset: Being good at making money without understanding risk is shortsighted. True success includes managing risk effectively, as poor management can lead to losses over time.
5. Path to Success: To gauge your future success, consider your competition. Identifying those you don’t want to emulate can be as important as finding role models.

These ideas encourage a fresh perspective on economics and personal growth. You may also explore other books in Taleb’s Incerto series: Fooled by Randomness, The Black Swan, Antifragile, and Skin in the Game for deeper insights.

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