Antifragile Quote 23 – Options is Good

This ability to switch from a course of action is an option to change. Options—and optionality, the character of the option—are the topic of Book IV. Optionality will take us many places, but at the core, an option is what makes you antifragile and allows you to benefit from the positive side of uncertainty, without a corresponding serious harm from the negative side.

Like Britain in the Industrial Revolution, America’s asset is, simply, risk taking and the use of optionality, this remarkable ability to engage in rational forms of trial and error, with no comparative shame in failing, starting again, and repeating failure.

Thales put himself in a position to take advantage of his lack of knowledge—and the secret property of the asymmetry.

Thales paid a small price for that privilege, with a limited loss and large possible outcome. That was the very first option on record.

The option is an agent of antifragility.

antifragility equals more to gain than to lose equals more upside than downside equals asymmetry (favorable) equals likes volatility.

And if you make more when you are right than you are hurt when you are wrong, then you will benefit, in the long run, from volatility (and the reverse). You are only harmed if you repeatedly pay too much for the option.

There are other hidden options in our story of Thales. Financial independence, when used intelligently, can make you robust; it gives you options and allows you to make the right choices. Freedom is the ultimate option.

And, it is worth repeating, options, any options, by allowing you more upside than downside, are vectors of antifragility.

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