Become Anti-Fragile

'Fragility' can be defined as an accelerating sensitivity to a harmful stressor: this response plots as a concave curve and mathematically culminates in more harm than benefit from random events. 'Antifragility' is the opposite, producing a convex response that leads to more benefit than harm.

- Nassim N. Taleb

We can measure fragility by the acceleration of harm. Things that are antifragile become stronger the more they are exposed to stress.  

If I were to drop a 1 pound bag on my foot 50 times I am harmed less than if I were to drop a 50 pound weight on my foot 1 time. If the force, or acceleration of harm, is greater than the damage is greater in things that are fragile. 

Antifragility is the opposite. 

The term anti-fragile refers to anything that improves or strengthens from disorder. 

It was popularized by Nassim Nicholas Taleb in his now-famous book Antifragile. 

An example of something that antifragile is our muscles. As we work out we are breaking down the muscles and then building them back up bigger and stronger. When we engage in our weight lifting routine our muscles thrive from this disorder. 

Antifragility is greater than resilience. If you are resilient you can withstand shocks, but the antifragile get better through the disorder.

The difference between resilience and antifragile is leveraging uncertainty. 

If you are only resilient then uncertainty is harmful. 

An example is insurance companies. They are fragile they are harmed by uncertainty - black swan events like a hurricane that will cause billions of dollars in damage leading to massive insurance payouts.  

On the other hand options traders benefit from volatility and can become antifragile by placing bets on extreme outcomes of events and capturing profit from huge uncertainty in the markets. 

The key is to look around at your life and find areas where you are fragile and become antifragile. 

The Lindy Effect

The Lindy Effect which was popularized by Nicholas Nassim Taleb in his books The Black Swan and Antifragile is a concept that refers to the Lindy deli in New York City. 

It is named for a deli where comedians would gather and do post mortems on their performances from the evening with the basic understanding that the more material they had the longer they would last in show business. 

Thus born out of this idea the longer something is around the more likely it is to stick around. 

Think of a company like Google. 

Google has been around for over 20 years. So it is safe to assume that Google will still be in business for at least another 20 years. 

Let's compare that to the new tech start-up that is only a few years old. Why would anyone think this business would have a shelf life longer than a few years. It has not proven the test of time it has not demonstrated a long enough track record. 

It is not to say that this new start-up will not be a long-time player. It might very well be the next Google. 

What the Lindy Effect tells us is to be skeptical of claims of hype and the freshness of new. 

This is why Bitcoin will outlast the new altcoins coming to the market every day. Why Apple will still be making new devices people stand in line to buy 30 years from now. 

Or why slight calorie deficits and moderate levels of exercise 5 days a week is the best, most consistent way to lose weight and new fad diets come and go through the ages. 

The Lindy Effect is a mental model we can use to evaluate ideas and concepts and see through the hype. 

There is a reason Tiffany's is a trusted brand and Ford still makes trucks. These companies have withstood the test of time through booms and busts. The likelihood of Tiffany's being in business 100 years from now is greater than a new jewelry company being in business 100 years from now with only a few years of operations under their belt. 

It is not to say any of these are certainties but with regression always going to mean we can confidently estimate with some level of certainty this is more likely an outcome. 

The Lindy Effect helps sort through the hype and shiny new objects and see the realities more clearly.