Will the hype last?
We live in the world of information gluttony. We are constantly bombarded with new information - about events, books, technology, startups, diet plans, investment tips, fashion, etc. There are experts coming with new theories everyday. But how do you know if it's just the hype or has truth to it? How long will this trend last?
There is a simpler way to address this - Lindy effect
The Lindy Effect states that the future life expectancy of a non-perishable item is proportional to its current age.
The nonperishable is anything that does not have organic or avoidable expiration dates (e.g. an idea, technology, content, book, practice etc).
Nassim Taleb has mentioned the Lindy Effect in many of his books and you can google about its origin. But in simpler words, if you want to know how long the non-perishable will endure, then the first question you should ask is how long it has already existed. The older it is, the more likely it is to go on surviving. Time is the ultimate judge of all.
Let's take cryptocurrency as an example. It has been around since 2009. It's 12 years since it existed. According to the Lindy effect, you can expect it to last another 12 years. But if it lasts another 12 years, you can expect it to last another 24 years after that. You can apply this mental model to any non perishable item - from religion, diet tips or even investment strategies.
It is important to understand the Lindy Effect because we are bad predictors of the future. We often overestimate the “new” and don’t give enough credit to the “old”. It helps us determine how to respond when presented with newer things.
Lindy effect is a probabilistic pointer to truth in a sea of falsehood - @naval
The final word of caution is the word - probabilistic. It does not tell you what to do, but it simply forecasts how long a non-perishable will last.