The trouble with nerds

by Tom Welsh, Senior Consultant

Have you read Nassim Nicholas Taleb’s best-selling book “The Black Swan” yet? Like his first, “Fooled by Randomness”, it’s a terrific read - although lots of critics are hammering him for arrogance and self-indulgence, both in the media and on Amazon. Taleb is smart, self-made, opinionated, and a maverick. His main thesis is that human beings are fatally over-inclined to see patterns and “stories” where there are none. One of these patterns is the bell curve, to which he says statisticians, economists, and all sorts of clever people are unduly attached. Most often, when something important happens, nobody predicted it. Like the crash of 2000, or the sudden rise of Java. Or the Web. The world is full of extreme events like rogue waves and market crashes, which should not happen if normal distributions were as normal as we believe.

That’s good stuff, and well worth reading, but what really got my attention was Taleb’s definition of a nerd. (If you have the book, it’s on pp 122-5). A nerd is someone who, when told that a fair coin has come up heads 99 times in a row, believes that the chances of it coming up heads on the 100th toss is exactly 0.50. A non-nerd (the kind of person who tends to succeed in life), on the other hand, immediately assumes the coin is loaded - despite having been told IN THE RUBRIC that it is fair. And there you have it: a nerd is someone who wants to know the rules, and then sticks within them. Ring a bell? Could that be you? I know it could be me.