Instead, the computer boom of the 1970s and 1980s produced a temporary decline in economic and scientific productivity. Economists termed this the productivity paradox.

The human brain is quite remarkable; it can store perhaps three terabytes of information.41 And yet that is only about one one-millionth of the information that IBM says is now produced in the world each day. So we have to be terribly selective about the information we choose to remember.

Although the statistical methods that epidemiologists use when a flu outbreak is first detected are not quite as simple as the preceding examples, they still face the challenge of making extrapolations from a small number of potentially dubious data points.

[T]here are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—there are things we do not know we don’t know.—Donald Rumsfeld21

There is reasonably strong evidence for what Thaler calls No Free Lunch—it is difficult (although not literally impossible) for any investor to beat the market over the long-term. Theoretically appealing opportunities may be challenging to exploit in practice because of transaction costs, risks, and other constraints on trading. Statistical

“It’s critical to have a diversity of models,” I was told by Kerry Emanuel, an MIT meteorologist who is one of the world’s foremost theorists about hurricanes. “You do not want to put all your eggs in one basket.” One of the reasons this is so critical, Emanuel told me, is that in addition to the different assumptions these models employ, they also

There are also periodic fluctuations that take hold at periods of a year to a decade at a time. One is dictated by what is called the ENSO cycle (the El Niño–Southern Oscillation). This cycle, which evolves over intervals of about three years at a time,57 is instigated by temperature shifts in the waters of the tropical Pacific. El Niño years, when

In today’s stock market, most trades are made with someone else’s money (in Druckenmiller’s case, mostly George Soros’s). The 1990s and 2000s are sometimes thought of as the age of the day trader. But holdings by institutional investors like mutual funds, hedge funds, and pensions have increased at a much faster rate (figure 11-9). When Fama

In the United States, we live in a very results-oriented society. If someone is rich or famous or beautiful, we tend to think they deserve to be those things. Often, in fact, these factors are self-reinforcing: making money begets more opportunities to make money; being famous provides someone with more ways to leverage their celebrity; standards