Sucker

Don't be one

One of my favorite characters from Nassim Taleb’s work is Fat Tony. For those of you who are unfamiliar, Fat Tony is the archetype of someone who has street smarts. He isn’t an intellectual, but Taleb uses the character of Fat Tony to demonstrate how purely academic-style thinking is worse than useless when applied to the real world.

I am always on the lookout for Fat Tonies in real life so I can take advantage of their street smarts and avoid the mistakes that they can smell coming around the corner. They are hard to find, especially if you are usually surrounded by people who are overpaid and overeducated, but if you keep your eyes open, you can find one every now and then. If you think you have found one, there is a straightforward test that you give them that comes straight out of Taleb’s The Black Swan.

When I was a student at the Command and General Staff Officer Course, I administered this test to my friend Mo, not so much to test whether or not he was a Fat Tony (I already knew that he was), but to demonstrate to others Mo’s street smart brilliance. To test your subject, give them the following scenario:

1. A coin has an equal probability of being either heads or tails when flipped: 50% chance of heads and 50% chance of tails.

2. The last 99 flips of the have come up heads.

3. What is the probability that the coin will come up tails on the next flip?

What do you think? You’re probably not a Fat Tony because Fat Tonies doesn’t read email newsletters, so don’t be upset if you get it wrong. I am not a Fat Tony, that’s why I am always trying to find one to stay close to.

The answer is that the probability that the coin is going to turn up tails on the next flip is, essentially, 0%.

As Fat Tony says in The Black Swan, “You are either full of crap or a pure sucker to buy that ‘50 percent’ business. The coin gotta be loaded. It can’t be a fair game.” Taleb goes on to write, “Translation: it is far more likely that your assumptions about the fairness are wrong than the coin delivering ninety-nine heads in ninety-nine throws.”

Of course, when I presented this scenario to Mo he immediately said, “no way is that coin going to come up tails.” I had found a Fat Tony.

The reason that I love this test is because of who it filters out. It filters out people like me who would robotically say, “the past results are irrelevant to the current probability because these events (the coin flips) are independent. The previous throws have no bearing on the probability of the next throw. This is counter-intuitive, but it is rational. If you cannot accept it, it is because you are ignorant about your own predisposition towards irrationality.”

Oftentimes it is not the answer itself, but the way the answer is given, that tells you about the tested subject. Someone who answers that there is not a f*cking chance that the coin will land tails is a Fat Tony. Someone who just stumbles into answering that it won’t be tails probably isn't. Conversely, someone who confidently explains the basics of probability is the opposite of a Fat Tony; likely to be overly-academic and to have read a lot of books written in the last 2-3 years. Most people fall somewhere in the middle.

But why are Fat Tonies good to have around? You always want a Fat Tony because Fat Tonies are really good at dealing with uncertainty. They can see danger coming around the corner. They know when to play it safe, and they know when to push their advantage. They can smell people’s motives and feel which way the wind is blowing. They are focused not on maximization, but on survival. If you find one, stay close to them and you’ll be alright.

The difficulty is that Fat Tonies can be very hard to spot. To people like me, they can often look unrefined, unsophisticated, unintelligent, and uninteresting. They look this way because they are usually not conversant in the things that I find intellectually stimulating. They aren’t interested in Tolstoy, they don’t listen to Mahler, they don’t give a flying flip about Napoleon, and they didn’t grow up in a home where the family sat around and read Carry On, Mr. Bowditch aloud. They’re often from low-income backgrounds where they had to grow up fast and didn’t have time to think abstractly. Because of this, they tend to be very good at not tricking themselves. They created brilliant heuristics that enabled them to act quickly and focus on surviving the situation that was right in front of them. And this set of skills can be invaluable inside an organization.

But Fat Tonies are probably either in your organization or somewhere in your organization’s orbit. They aren’t brown-nosing trying to get promoted, they’re just trying to get through to the next day, the next week, and they are experts at flying under the radar. Keep your eyes open and try to find one. Everyone needs a Fat Tony.