Tuesday, April 7, 2015

The Turkey and the Farmer -- Black Swan Divination

4/8/15 Edited to fix the embedded video.

Taleb uses the following example to describe a Black Swan's unpredictability. I understand that it originally came from Bertrand Russell’s Problems of Philosophy

So the lesson is, "Don't be a turkey"?
There's a turkey living on the farm. He's fat and happy. Life is good. Every day the farmer feeds him and he has to do nothing but grow large and fat and idle about on the farm. In his experience, this is the entirety of existence and will go on forever. But when Thanksgiving comes, the turkey will experience a Black Swan of terminal impact. The unpredictable -- the unthinkable -- will happen.

The farmer, on the other hand, has no such illusions. He knows what happens when autumn comes. It's no Black Swan for him as he feeds the bird and it's no Black Swan when he swings the ax. This is a nice overview if you want more detail.

Early 2006. A family is living in a large house in a small city. They have a young child and are considering moving. The house is too big, the town too small and too conservative. One of their jobs is about to go down the toilet. But there's something more. The family is convinced that the housing market is going to tank, big time. They put their large house on the market in May and get an offer right away. By the time they close, the market's already softened. The house may have lost value since the appraisal and the buyers are cranky, but it's too late for them to back out. The family sells for a top price and moves to a rental. Eventually they move to a new town. All the while they watch as the bottom falls out of the housing market, eventually taking a big chunk of the larger economy with it.

For this family, the housing market crash was not a Black Swan. It certainly took a bunch of other people by surprise, but not them. Why? Well, I'm not sure. Maybe it was the fact that they'd been directly hit by the dotcom bubble pop a few years prior and saw some of the same signs (anytime someone tells you it's a "whole new economy" be very afraid). Maybe it was because they'd taken out a HELOC to fix up the place and were shocked at how shoddy the application process had gotten (didn't they care whether the loan could be repaid)?

Maybe it was a video online that mapped housing prices over the decades onto a CGI rollercoaster and they got vertigo seeing how high the pinnacle was.


Maybe it was just hindsight bias... the house was too big, the town was too small so they made up the reason as rationalization for doing something crazy and are now busy justifying it to themselves (I don't think so, but, Black Swan, you know). Maybe they picked it up right out of the ether.

This is a real-life example of a situation that was a Black Swan for many people, but not for the family (my family) in this story. Getting stuck in a house underwater is bad. Getting stuck in a house underwater in a town with not many jobs is worse. Getting stuck in a house underwater in a town with no work where there's strong TABOR legislation (which ensured that as the tax base tanked, the city would be unable to provide basic public services)... that's a Black Swan.

So how do you start to see the Black Swans before they hit you? I've been working on a divination project for this purpose. But I have to caution you that this is not yet fully vetted in the sense that I've tried it, but it hasn't been really shock tested... yet. Keep this in mind if you try it yourself. Also if you try this method out, please let me know what you think and please don't republish the method (just point back here -- pimp my blog! -- it's free after all). I'm a tarot fan, so this is written for the cards. But it's also potentially adjustable to other forms of divination like runes, dice, etc. Use your own common sense here.

Note: if you have any foo, fuss, or bother you like to do along with your divination (cast a circle, pray, do an offering, hop on one foot while reciting the lyrics to The Gambler) you should do that. This is not ritual, it's tech.

  1. Make a list of the major areas of concern in your life. This might include work/career, school, family (if you have an immediate family and distant family, you might break this in two), environment, health, etc. The list is going to vary by person, but keep in mind this should include major domains only and should include only those items that are presently relevant. Maybe you have eight. If you have 20, you've probably been too detailed (or you have a much more complex life than I do). These are your known-unknowns. Also, include a category for unknown-unknowns (the "where the hell did that come from" category -- maybe the most important of all).
  2. Name the areas on your space (I find sticky notes really useful for this) so that you know which position relates to which area.
  3. Lay a card for each area.

     Reading: each card indicates at a high level what's coming in that domain. The goal here is to identify which areas you should focus on in the next phase of the divination.

So image the following results:
  • Work: 4 of pentacles (steady as she goes)
  • Family: 6 of cups (fond memories)
  • Environment: Queen of Swords (Knowledge)
  • Health: 10 of swords (uh oh)
  • Unknown-unknowns: The Tower (oh shit!)
So, it's clear from this reading that Health and the worrisome Unknown category are the places to focus on in the next part of the Divination. Please note that extremely positive cards (like The Sun or the 10 of Cups) are also worth examining in the next phase... you might have a positive Black Swan on your hands. Make a note of the results (I always document all my readings, but this is particularly relevant for the next step).

If you are looking at some really negative results here, you may want to consider having someone else do the next part of the reading for you. Wishful thinking is powerful, but in this case it's going to get in the way of finding out what you need to know.

So, phase two: put the 10 of swords and Tower aside and re-randomize the rest of the deck. These two cards are now your signifiers for the next reading. For each signifier, lay a set of cards as follows:

     Reading: So, the first card is your Black Swan "what's coming" signifier card from the previous reading. The next set of cards (and I'm still experimenting with the number here -- usually three, occasionally more) identifies the places you should be looking right now in order to get more information on What's coming. These cards are neither good nor bad in this position. They are simply pointers to where the information you need is. Read them all upright. Here's some additional guidance on these cards:
  • If any of the cards from the previous reading reappear here, look to that domain. For example, the area of concern is your health (10 of swords). Related to the previous sample reading, if the 4 of pentacles appears under [Where to Look Now], you should be looking at your current work (are there health hazards there? do you have a dangerous commute? is there an issue of Wellness magazine in the break room that caught your eye the other day?).
         On the other hand, if the 6 of cups turns up, you need to be looking at your family (is there a disease that runs in your family? was your mom just talking about something health related?).
  • If court cards come up, it may be that there's someone you should talk to or listen to on the subject. Maybe in person and maybe through media.
  • For minor arcana cards, look first to the suit. Swords point to research (catch up on your reading). Cups to emotional matters (what does your gut tell you? where is the strong emotion? are you very sad or stressed out?). Pentacles to material causes (food, sleep, environment). Wands to conflict or action (accidents or injury).
  • For major arcanum, consider the role of spirits, fate, core beliefs, magic already in play (are you crossed?), Deities, and life lessons.
For the Unknown-unknown, it's going to be a bit trickier. Based on your [Where to Look Now] cards, you may have to intuit what data is relevant. This is getting into the realm of augury, because you're looking at a big scary question mark here and you don't have as much data to go on. Follow your intuition.

The last card is your current path results. That means the results of this Black Swan based on your current trajectory. Of course it might also be possible to change your trajectory. It could even be that the knowledge you gain through the reading has already affected the outcome. It could be that even though there's a rough patch ahead, you will come through OK or even better. Or maybe the outcome is not so good.

If you know a Black Swan is coming, it's not technically a Black Swan, but it can still hurt you. If we hadn't sold our house, we would have been in big trouble. And when things got really bad in '08, we ended up in trouble anyway (even though we were still renting).

The lesson is not "sometimes you can't predict things." Though that's true of course, sometimes shit really does just happen. The lesson is "do what you can to keep from getting surprised." Don't let your hopes and emotions cloud your judgement. Keep your ear to the ground and get your data from a lot of different sources. Trust your instincts. Use your tools.

Then make your choices and hang on... because on the Extremistan roller coaster, it's a bumpy ride.

Part 2 of this post will be on what to do when the outcome doesn't currently look that good.

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