No Work Ethics
Taleb’s trader Nero values time to think and sees excessive activity as a way to become absorbed in market noise. He believes discipline can help secure a comfortable life, while extraordinary success also depends heavily on luck and risk.
THE IDEA
No Work Ethics
Nero, Taleb’s trader, is thirty-nine and, after fourteen years in the business, can consider himself comfortably settled. His personal portfolio contains several million dollars in medium-maturity Treasury bonds, enough to eliminate any worry about the future. What he likes most about proprietary trading is that it requires considerably less time than other high-paying professions; in other words it is perfectly compatible with his non-middle-class work ethic. Trading forces someone to think hard; those who merely work hard generally lose their focus and intellectual energy. In addition, they end up drowning in randomness; work ethics, Nero believes, draw people to focus on noise rather than the signal (the difference we established in Table P.1).
This free time has allowed him to carry on a variety of personal interests. As Nero reads voraciously and spends considerable time in the gym and museums, he cannot have a lawyer’s or a doctor’s schedule. Nero found the time to go back to the statistics department where he started his doctoral studies and finished the “harder science” doctorate in statistics, by rewriting his thesis in more concise terms. Nero now teaches, once a year, a half-semester seminar called History of Probabilistic Thinking in the mathematics department of New York University, a class of great originality that draws excellent graduate students. He has saved enough to be able to maintain his lifestyle in the future and has contingency plans perhaps to retire into writing popular essays of the scientific-literary variety, with themes revolving around probability and indeterminism— but only if some event in the future causes the markets to shut down. Nero believes that risk-conscious hard work and discipline can lead someone to achieve a comfortable life with a very high probability. Beyond that, it is all randomness: either by taking enormous (and unconscious) risks, or by being extraordinarily lucky. Mild success can be explainable by skills and labor. Wild success is attributable to variance.
When to use it
A trader evaluating their work habits to improve decision-making by reducing noise.
A manager allocating team time between deep analysis and routine tasks to increase signal-to-noise ratio.
An entrepreneur deciding whether to double down on efforts or step back to reassess strategy.
A student reviewing which study activities improve understanding and recall, rather than judging preparation only by hours spent.
FROM THEORY TO EVERYDAY LIFE
In practice
Nero's Approach to Trading
Nero, a proprietary trader, deliberately works less than other professionals to preserve intellectual energy. He believes that working hard often leads to focusing on noise rather than signal, and that beyond achieving a comfortable life through disciplined effort, further success is mostly random.
Hours and Useful Work
Someone works 80 hours a week checking prices and reacting to every fluctuation. Nero’s perspective would ask how much of that activity improves decisions and how much merely consumes the attention needed to think.
A MOMENT TO REFLECT
Put it to work.
In your daily work, are you primarily thinking hard or working hard? How might shifting your focus affect your outcomes?
Think of a recent success you attributed to hard work. Could it have been influenced more by randomness or luck?
What activities in your routine are actually noise that distract from the signal? How can you eliminate or reduce them?
Often confused with
CONTINUE THE CONVERSATION
Source texts
- Fooled by Randomness The Hidden Role of Chance in the Markets and in Life (Nassim Nicholas Taleb)