Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

12 Things I Learned from the Book "The Bed of Procrustes"

By Morgan Housel - Dec 26, 2014 at 8:48PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Wisdom from Taleb.

I read Nassim Taleb's book The Bed of Procrustes.

Taleb, author of The Black Swan, is one of the smartest thinkers around, and one of the best writers to boot -- a rare combination. 

The Bed of Procrustes is a list of hundreds of short quotes and aphorisms about life, money, politics, and business. Here are 12 that stood out to me as particuarly smart. 

1. "Economics cannot digest the idea that the collective (and the aggregate) are disproportionately less predictable than individuals."

This is why markets are so hard to understand. 
 
2. "To be completely cured of newspapers, spend a year reading the previous week's newspapers."

I've written a bit about this. You'll never take predictions too seriously again. 
 
3. "Fortune punishes the greedy by making him poor and the very greedy by making him rich."

This explains Wall Street before the financial crisis. 
 
4. "'Wealthy' is meaningless and has no robust absolute measure; use intead the subtractive measure 'unwealth,' that is, the difference, at any point in time, between what you have and what you would like to have."
 
5. "My only measure of success is how much time you have to kill."

People love talking about how busy they are like it's a sign of success. Maybe it is for some, but for most it's a sign of being out of control. 
 
6. "The fastest way to become rich is to socialize with the poor; the fastest way to become poor is to socialize with the rich."

This might explain why most hedge funds fail while the payday loan business thrives. 
 
7. "Over the long term, you are more likely to fool yourself than others."

But let me guess, you don't believe that's true? 
 
8. "The three most harmful addictions are heroin, carbohydrates, and a monthly salary."
 
Self-interest is a powerful force and people do what they need to do to stay employed. 
 
9. "The tragedy is that much of what you think is random is in your control and, what's worse, the opposite."

Saving is in your control. Expectations are in your control. Behavior is in your control. Market moves are not. 
 
10. "The calamity of the information age is that the toxicity of data increases much faster than its benefits."

Same for 24/7 news. 
 
11. "Knowledge is subtractive, not additive—what we subtract (reduction by what does not work, what not to do), not what we add (what to do)."
 
12. "Anyone voicing a forecast or expressing an opinion without something at risk has some element of phoniness. Unless he risks going down with the ship this would be like watching an adventure movie."

This is why punditry is so embarrassing

Go buy the book here. It's great. 

For more:

More from The Motley Fool: Warren Buffett Tells You How to Turn $40 into $10 Million

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
652%
 
S&P 500 Returns
142%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/08/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.