This book and its summary are pretty long, I extracted the useful advice in a shorter article.
- Major killers in 1900’s USA were Pneumonia, TB, and Diarrhea that are pathogen based while major killers in 2000s are heart diseases, cancer, and lung diseases that are lifestyle diseases. The developing world, which has shifted to a western diet, is seeing the same fate.
- Aging is tied to Telomeres, a tiny cap at the end of chromosomes, which prevents DNA from unraveling. Some amount of it is lost on every cell division. So, shortening of Telomere indicates aging. Smoking triples that rate. Meat, soda, dairy, fish, and refined foods are associated with shorter Telomeres. Plant diets with rich antioxidants are associated with longer Telomeres. Plant-based nutrition is the only intervention which helps in growing Telomerase, an enzyme which helps in regrowing Telomere.
- Vegetarians transitioning to meat once a week experienced a 146% increase in odds of heart attack, 152% increase in odds of stroke, 166% increase of odds of Diabetes, and 231% increase of odds of weight gain. India, despite a low increase in per-capita meat consumption, is facing high lifestyle disease rate due to an increase in refined foods like white rice. So, don’t just go for a vegetarian diet. French fries + Coke is vegetarian but not healthy. Go for an evidence-based diet. The current evidence suggests a whole plant-based diet is healthy. Calories in junk food are cheaper but when you take nutrition beyond calories into account then junk food loses out to whole plant-based diets. Moreover, farms with animals are associated with a higher rate of cancer. Plant-only farms are not. Poultry farms are the worst. Pet companionship is associated with lower cancer rate though.
- A healthy lifestyle is key. Not smoking, not being obese, 30-mins daily exercise, and a plant-based diet is sufficient to wipe out 80% chance of chronic diseases. Non-genetic factors account for 80-90% of the major diseases today. For example, colon cancer rates were 1/5th in Japan compared to the USA in 1950. Now, due to increased meat consumption, they are almost the same. Diet is a gradual process and not all or nothing. If you eat Pepperoni Pizza once a week, going down to once a month is better than not giving it up at all.
- Thanks to dairy and meat lobbies, you will hear “eat more veggies” message but no “eat less meat” message. The latter message will be made more cryptic by saying “avoid saturated and trans fat”. But in reality, no amount of trans fat is safe as it always leads to a risk of Coronary Heart Disease (CHD). However, trans fat is unavoidable in a non-vegan diet. Order of nutrition quality: Unprocessed plant food > Processed plant food = Unprocessed animal food > Ultra-processed plant food = Processed animal food.
- Patients regularly overestimate the benefits of drugs. Doctors are hesitant, to tell the truth since no patient would take a drug which has only a 5% chance of success. Big pharma spends a lot on advertisements. They advertise drug, not diet changes. Drugs make money for them, diet changes do not.
- Washing vegetables remove 50% of pesticides. Washing in 5% vinegar (expensive) or 10% saltwater (cheaper) is much more effective. Rinse again after saltwater though.
- After consuming acidic food, rinse the mouth with water to avoid enamel decay. However, don’t brush since that will damage the already softened enamel.
Daily Dozen checklist of Good Health
- 3 servings of Beans
- 1 serving of Berries
- 3 servings of other fruits
- 1 serving of Cruciferous vegetables
- 2 servings of Greens
- 2 servings of Other Vegetables
- 1 serving of Flaxseed
- 1 serving of Nuts
- 1 serving of Spices
- 3 servings of Whole Grains
- 5 servings of Beverages
- 1 workout session
Why Nations Fail
The book is a good read on why some nations are rich today while others are poor. While the book Breakout Nations provides useful information on the current situation in many countries, Why Nations Fail offers valuable historical lessons on critical aspects of economy and politics that have shaped countries around the world. The theme of this book includes:
- Inclusive vs. Extractive Economic and Political Institutions
- The Myth of Geography/Culture
- Path-dependence of the Past
- Centralization of Power
- Creative Destruction
- Critical Junctures
- Defending Prosperity
- Skin in the game creates a diversity of beliefs and ideas, for example, restaurant businesses. Lack of it creates a monoculture, for example, journalism.
- Skin in the game comes with a conflict of interest. For example, a shareholder is more inclined to say positive things about the company, whose shares he holds. Even then, skin in the game is preferable over no skin in the game. A lack of skin in the game, usually, produces a monoculture of beliefs.
- Bureaucrats, with no skin the game, usually make the problems worse by deciding things from the top.
- Beware of “good” advice where you will get both the good and the adverse outcomes of that advice while the advice-giver will only get a good result.
- Metrics puts one’s skin in the wrong game. For example, a doctor who has to optimize for a five-year survival rate of a cancer patient might go for radiation therapy as opposed to laser surgery even though radiation therapy has worse 20-year survival rates.
- Pilots have more skin in the game than surgeons. If a plane has a 98% chance of surviving a flight, then all pilots would have been dead for now, while medical science can operate with a much lower survival rate since skin in the game is primarily of the patients and much lower of surgeons.
- An academic experiment where one is supposed to wager a bet and hypothetically believe in a specific scenario is devoid of real risk and hence devoid of skin in the game.
- Academia, when left unchecked, for the lack of skin in the game, evolves into a ritualistic self-referential publishing game.
The book talks about randomness, associated maths, and the psychological biases which interfere in a more stochastic approach to thinking about life.
- Probability is not about odds but a belief in the existence of an alternative outcome.
- The right way to judge the performance in any field is not by the results but by the cost of the alternatives. A million dollar earned through dentistry is more valuable than a million dollar won via playing Russian roulette. The alternative outcomes in the case of Russian roulette are far worse.
- Our habitats have evolved faster than our ability to evolve with it. Things like probability do not come naturally to us.
- When a random process scales (“repeated”), its results regress towards the mean. A 15% return with 10% volatility implies a 93% chance of a positive return in a year (=> 7% bad years) but only a 67% chance of having a positive month (=> 33% bad months) and 50.02% chance of a positive second (=> every other second will have a negative return).
- Over a short time, one sees variability in the portfolio not returns. Over a long time, one sees returns, not variability.
- The wise man listens to the meaning; the fool only gets the noise.
- Law of large numbers – A population consisting of a large number of bad managers is virtually guaranteed to produce some who will have amazing track records. Moreover, the extent of the greatness of their results depends more on the initial sample set than their ability to produce results.
- In real life, a lot of events have skewed payoffs. The likelihood of an event can be lower but the corresponding payoff (or damage) can be much higher. Maximizing the probability of such events does not translate into maximizing the payoffs.
- An option seller makes continuous “small” amounts of income while an option buyer loses money and makes money in one-shot only in case of the occurrence of a rare event. Selling options gives psychological kicks while buying is economically optimal.
- Path-dependent outcome – Computer keyboards are QWERTY because typewriters are QWERTY and that’s because that was the preferred way to slow down the typists to avoid jamming the typewriters. It is not rational to have them today but path-dependent outcomes are the cornerstone of life.
- The same effect can explain why Microsoft’s Windows was able to win by creating a networks effect around its operating system.
- The endowment effect is a manifestation of that.
- Polya process is a more accurate model of the real world than “independent events” approach. Economists fail to realize that.
- We have two systems of reasoning – one is for fast decision making, the other one is for the slow decision making (more details in Thinking Fast and Slow).
- One major implication of it is that ideas do not sink in when emotions come into play.
- Consumers consider 75% fat-free hamburger to be different from only 25% fat hamburger. Mathematically, they are the same.
- Affect heuristic – the emotions associated with an outcome determine the probability of that outcome in our mind
- Attribution bias – People ascribe skills to their success and random unfortunate events to their failure.
- Simulation heuristic – playing alternative scenarios in the head. “I was about to exit the market right before the 2008 crash, I just missed it”
- Hindsight bias – We an incident happens, we believe that we knew that it was going to happen all along. Even though, if earlier, we were asked about our belief in the occurrence of the incident we would not have been that certain. The worst aspect is that it fools us into believing that we can predict the future.
- History appears deterministic even though it is just a manifestation of the potential random paths that were realized.
- Unlike hard sciences, one cannot experiment in history.
- Survivorship bias implies that the highest performing realization is most visible since the loser never speaks up (or survives).
- Availability heuristic – We assign probabilities based on how easily can instance of that incident be recalled.
- People don’t like to buy insurance against something abstract, only the vivid risks merit their attention, therefore, it is easy to sell travel insurance against terrorist act vs travel insurance against loss of life.
- Representativeness heuristic/Conjunction fallacy – We assign the probability of a person belonging to a particular group based on how similar the person looks to that group.
- A feminist student is deemed more likely to be a feminist bank teller than to be a bank teller. Even though the latter is a superset of the former
- Wittgenstein’s ruler – If you have a scale, whose accuracy you aren’t confident of, and you use that to measure the table then you are measuring the scale as much as you are measuring the table. Or more formally, unless the source of the statement is a qualified author the statement is more revealing of the author than the information intended by him.
- Sandpile effect – “The last straw on the camel’s back” are examples of how a linear change can have a non-linear impact on the complex systems (causing a collapse).
- Firehouse effect – A group of people with a similar mindset, after spending too much time can come to the conclusions which are ludicrous to an outsider.
- Psychologically, the frequency of positive events matters more than magnitude. A negative event of the same magnitude is more devastating than the positive event of the same magnitude.
- The inverse skills problem – The higher up the person is in a corporate ladder, the lower is the repeatability of their work, and hence, lower is the actual evidence of a contribution. A person engaged in repeatable work is easy to judge. One engaged in non-repeatable work cannot be easily judged since their results might be a pure manifestation of randomness.
- Humans and even non-humans start seeing patterns in randomness and develop superstitions around how those patterns can benefit or harm them.
- Rational thinking has little to do with risk avoidance, most of it is about rationalizing one’s actions by fitting some logic to them.
- Some details of our daily life like career decisions and investments can harm us or even threaten our survival, it is good to be rational and scientific about them. Other mundane details like the choice of religion can be a very irrational one.
- It does not matter how frequently something succeeds if the failure is too costly to bear.
- Common sense is nothing but a collection of misconceptions acquired by the age of 18.
- Depending on the use-case, extreme values are noise or devastating signals. Average temperature (excluding extremes) is great to decide next vacation destination but for climate scientists, it’s the extremes that matter. Similarly, extremely rare events can bankrupt a company.
- As per Karl Popper, there are two types of theories, falsified and yet to be falsified. Something which can not be falsified is not a theory.
- More knowledge does not always lead to more information, sometimes, it just leads to a stronger belief in meaningless noise.
- Markets always go up in 20 years more or less holds but only a few markets have really survived over time and it was not obvious with hindsight that which ones will survive. For example, Germany, Imperial Russia, Argentina blew up completely.
- Most humans stop when they are satisfied (satisfied + suffice) with a result than working towards the most optimal outcome. Satisficers are happier; optimizers end up being more successful on any traditional metrics of success. The causality is not clear though.
- At a given point in the market, the most successful traders are likely to be those that are the best fit for the latest cycle. This does not apply to dentists since that profession is more immune to randomness.
- People become leaders not because of the skills they possess but the superficial expressions they make on others (“charisma”).
- When people merely work hard, they lose focus and intellectual energy. Work ethics, however, draw people towards signal than the noise.
- Extreme empiricism, an absence of a logical structure, and competitiveness can be quite an explosive combination.
- Someone’s raw performance and personal wealth can sometimes (but not always) be an indicator of their success.
- We learn from mistakes by doing them not by reading/listening to them. Learnings from history cannot be acquired via pure reading either.
- Listening/reading current news neither provides one with any predictive ability nor improves one’s knowledge of the current world.
- Spontaneous remissions of cancer can suddenly cure the disease and the patient might think that whatever pill they have consumed in the meanwhile has the cancer-killing property.
- The unpredictability of the behavior is a deterrent. Sometimes, the government has to overreact on small things, so that, others cannot figure out the precise limits of tolerance.