The Book in One Paragraph
Asymmetries exist all over the place in society. In most transactions, one party typically has more information than the other. In many professions, there is no penalty for giving bad advice. In many industries, one group is able to take risk without incurring potential losses. Skin in the game – having exposure to both upside and downside – is the solution to most problems involving asymmetry.
Skin in the Game Summary
This is my book summary of Skin in the Game by Nassim Nicholas Taleb. My notes include quotes, big ideas, and important lessons from the book.
- “What matters isn’t what a person has or doesn’t have; it is what he or she is afraid of losing.”
- You can never convince someone that he is wrong. Only their own reality and experience can do that.
- “Scars signal skin in the game.”
- If you want to know what someone really thinks, observe their actions, not their words.
- Unless someone has lived through a specific scenario, their opinion about it is meaningless. “If you do not take risks for your opinion, you are nothing.”
- “Don’t tell me what you think, tell me what you have in your portfolio.”
- “When young people who “want to help mankind” come to me asking, “What should I do? I want to reduce poverty, save the world,” and similar noble aspirations at the macro-level, my suggestion is: 1) Never engage in virtue signaling; 2) Never engage in rent-seeking; 3) You must start a business. Put yourself on the line, start a business.”
- Having exposure to both the upside and downside in a situation is the only way to truly learn.
- Don’t take advice from people who receive no penalty for giving bad advice.
- “Those who talk should do and only those who do should talk.”
- “It is no secret that large corporations prefer people with families; those with downside risk are easier to own, particularly when they are choking under a large mortgage.”
- The doer wins by doing, not by convincing. Anyone who has to convince you that they are living a good life is unlikely doing so.
- “How much you truly ‘believe’ in something can be manifested only through what you are willing to risk for it.”
- “What you learn from the intensity and the focus you had when under the influence of risk stays with you. You may lose the sharpness, but nobody can take away what you’ve learned. This is the principal reason I am now fighting the conventional educational system, made by dweebs for dweebs. Many kids would learn to love mathematics if they had some investment in it, and, more crucially, they would build an instinct to spot its misapplications.”
- In professions where skin in the game is necessary to succeed, those who dress sloppy are typically the ones who have experienced the most success. They are sought after based on their past success, not based off their appearance.
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