The paradox of (un)predictability and risk taking

People say life is unpredictable.  That's both true and it also isn't. Life can be quite predictable a lot of times too. There's a lot of non linearity in life but interspersed,  there's a lot of linearity too, especially on shorter time scales. Its easy to predict what you will do tomorrow based on what you are doing today, most of the times. The predictable parts of life,  are usually,  under your locus of control

There's another aspect to it though.  The unpredictability and non linearity can be either positive or negative-- but the two are not quite symmetric.  How often are you positively really really surprised, in ways totally not predictable (in ways big and small ) ?  The happy things in life  I suspect, are usually predictable or atleast plannnable though vice versa is not true. 

Ofcourse you can get lucky.  But you need to actively put yourself in a position where you can get lucky.  You cannot win a lottery without buying a lottery ticket! So yes, there are many ways to attempt to get non linearly positive risk reward payoffs.  But each of them typically involve some amount of active decision making on your behalf,  a little bit of active risk taking - you can always look at capping the downside while attempting a non linear upside-- but the bottom line-- you cannot benefit from positive non linearity without actively taking atleast a little bit of risk. 

Whereas the ( not so positive) black swans that occur do not require you to actively be a risk taker.  By nature and definition, black swan risks are hidden,  so you are likely to be blindsided when they hit.  There in lies the asymmetry.  To benefit from positive non linearity involves planning and atleast some amount of risk taking - while negative non linearity can hit you without you actively assuming any risks. 

Ofcourse you can be risk averse and try to reduce the volatility.  Make life more predictable.  Which ensures outcomes are in a somewhat narrow linear range  either positive
or negative  atleast most of the times ( barring when black swans occur). 

Being passive and risk averse is no guarantee to avoiding negative black swans but being atleast slightly risk seeking and making active decisions is a necessity for benefiting from positive non linearity! Not rocking the boat is good for predictably ( but not guaranteed) mediocre outcomes but its not going to get you exciting positive non linear outcomes!



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