Anti-Fragility

DEFINITION of 'Anti-Fragility'

A postulated antithesis to fragility where high-impact events or shocks can be beneficial. Anti-fragility is a concept developed by professor, former trader and former hedge fund manager Nassim Nicholas Taleb. Taleb coined the term "anti-fragility" because he thought the existing words used to describe the opposite of "fragility," such as "robustness," were inaccurate. Anti-fragility goes beyond robustness; it means that something does not merely withstand a shock but actually improves because of it.

BREAKING DOWN 'Anti-Fragility'

For example, he describes an anti-fragile trading strategy as one that does not merely withstand a turbulent market but becomes more appealing under such conditions. Another example he gives is weight lifting, which trains muscles not just to withstand heavy lifting but to develop increased strength as the body repairs the muscle fiber tears. Taleb discusses anti-fragility in his books, "The Black Swan," "Fooled By Randomness" and his 2012 book "Antifragility."

RELATED TERMS
  1. Black Swan

    An event or occurrence that deviates beyond what is normally ...
  2. Statement Shock

    The shock associated with opening an investment statement and ...
  3. Trillion Dollar Coin

    A trillion dollar coin is a theoretical coin that could be legally ...
  4. Blow Up

    A slang term used to describe the complete and abject failure ...
  5. Gambler's Fallacy

    When an individual erroneously believes that the onset of a certain ...
  6. Hedge Fund Manager

    The individual who oversees and makes decisions about the investments ...
Related Articles
  1. Investing

    Black Swans, Explained

    There exists a certain type of trader who invests in low-probability events that generate enormous pay-offs if they occur. These are the Black Swans.
  2. Investing Basics

    Black Swan Events And Investment

    These world-changing events are rare and difficult to predict, but they have serious implications for your investments.
  3. Investing

    Don't Freak Out Over Black Swans; Be Prepared

    Could 2016 be a big year for black swans? Who knows? Here's what black swans are, how they can devastate the unprepared, and how the prepared can emerge unscathed.
  4. Investing Basics

    10 Books Worth Investing In

    Here are 10 financial services books that are informative and useful.
  5. Fundamental Analysis

    Financial Markets: Random, Cyclical Or Both?

    Are the markets random or cyclical? It depends on who you ask. Here, we go over both sides of the argument.
  6. Active Trading

    Random Reinforcement: Why Most Traders Fail

    This phenomenon can cause a trader to abandon a proven strategy or risk everything on chance. Find out how to avoid it.
  7. Forex Education

    Are $1 Coins A Better Option Than $1 Bills?

    We look at how much the government could save if it took $1 bills out of circulation.
  8. Investing

    Bold Prediction: Your Retirement Is In Jeopardy From Decades Of Low Interest Rates

    My parents are aging rapidly. Whenever I would bring up the topic of long-term care insurance with my dad, he would laugh. I was his long-term care policy, he'd say. He might be on to something. ...
  9. Mutual Funds & ETFs

    How To Invest Like A Hedge Fund

    Hedge funds earn big returns for investors. Find out how they do it and whether you can too.
  10. Financial Advisors

    Why Hedge Funds Are Not Living Up to Return Hype

    Hedge funds are supposed to produce better returns while protecting your investments from the downside. Here's why they are not living up to their purpose.
RELATED FAQS
  1. How long does the average demand shock affect pricing?

    Read about the nature of demand shocks in an economy, how they correlate with prices, and what determines the length and ... Read Answer >>
  2. What are common examples of aggregate demand shocks?

    Learn about some common examples of demand shocks in the economy, how they occur and function, and what it means to aggregate ... Read Answer >>
  3. What are some common examples of demand shock?

    Discover some common examples of demand shock. Demand shocks lead to rapid increases or decreases in demand that catch everyone ... Read Answer >>
  4. Why do supply shocks occur and who do they negatively affect the most?

    Take a deeper look at the nature of supply shocks, an economic phenomenon that dramatically changes the equilibrium level ... Read Answer >>
  5. How do traders use out-of-the-money options to hedge?

    Learn a couple of simple option trading strategies that traders can use to hedge an existing market position and protect ... Read Answer >>
  6. What trading strategies help investors withstand a drawdown?

    Understand the concept of drawdown and the importance for traders of having a trading strategy that takes temporary drawdown ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center