The Butterfly In The Chip Shortage
The global chip shortage can be attributed to Covid disrupting global supply chains. But there’s more to it. Covid is merely the butterfly flapping its wings.
The global chip shortage can be attributed to Covid disrupting global supply chains. But there’s more to it. Covid is merely the butterfly flapping its wings.
Paradigm is the most important part of the Iceberg model. It exists on an ideological level but manifests itself physically through all the layers above it.
The Iceberg model is a great tool to help you think in terms of systems. It has 4 layers, events, patterns of behavior, systems structure, and paradigm.
Reductive thinking is also widely used in financial forecasting, using the same seductive “because of A , B will happen” formula.
Reductive statements do more harm than good because they cause traders to confuse correlation with causation, and believe that markets are easy to understand.
Nassim Taleb summed up reductive thinking very well: “As much as you believe in the ‘keep-it-simple-stupid’ it is the simplification that is dangerous.”