Books : The Black Swan: The Impact of the Highly Improbable

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by: Nassim Nicholas Taleb

: The Black Swan: The Impact of the Highly Improbable

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Binding: Hardcover
Dewey Decimal Number: 003.54
EAN: 9781400063512
ISBN: 1400063515
Label: Random House
Manufacturer: Random House
Number Of Items: 1
Number Of Pages: 400
Publication Date: April 17, 2007
Publisher: Random House
Release Date: April 17, 2007
Sales Rank: 132
Studio: Random House



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Editorial Review:

Product Description:
A black swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. The astonishing success of Google was a black swan; so was 9/11. For Nassim Nicholas Taleb, black swans underlie almost everything about our world, from the rise of religions to events in our own personal lives.

Why do we not acknowledge the phenomenon of black swans until after they occur? Part of the answer, according to Taleb, is that humans are hardwired to learn specifics when they should be focused on generalities. We concentrate on things we already know and time and time again fail to take into consideration what we don’t know. We are, therefore, unable to truly estimate opportunities, too vulnerable to the impulse to simplify, narrate, and categorize, and not open enough to rewarding those who can imagine the “impossible.”

For years, Taleb has studied how we fool ourselves into thinking we know more than we actually do. We restrict our thinking to the irrelevant and inconsequential, while large events continue to surprise us and shape our world. Now, in this revelatory book, Taleb explains everything we know about what we don’t know. He offers surprisingly simple tricks for dealing with black swans and benefiting from them.

Elegant, startling, and universal in its applications The Black Swan will change the way you look at the world. Taleb is a vastly entertaining writer, with wit, irreverence, and unusual stories to tell. He has a polymathic command of subjects ranging from cognitive science to business to probability theory. The Black Swan is a landmark book–itself a black swan.

Amazon.com Review:
Bestselling author Nassim Nicholas Taleb continues his exploration of randomness in his fascinating new book, The Black Swan, in which he examines the influence of highly improbable and unpredictable events that have massive impact. Engaging and enlightening, The Black Swan is a book that may change the way you think about the world, a book that Chris Anderson calls, "a delightful romp through history, economics, and the frailties of human nature." See Anderson's entire guest review below.


Guest Reviewer: Chris Anderson

Chris Anderson is editor-in-chief of Wired magazine and the author of The Long Tail: Why the Future of Business Is Selling Less of More.

Four hundred years ago, Francis Bacon warned that our minds are wired to deceive us. "Beware the fallacies into which undisciplined thinkers most easily fall--they are the real distorting prisms of human nature." Chief among them: "Assuming more order than exists in chaotic nature." Now consider the typical stock market report: "Today investors bid shares down out of concern over Iranian oil production." Sigh. We're still doing it.

Our brains are wired for narrative, not statistical uncertainty. And so we tell ourselves simple stories to explain complex thing we don't--and, most importantly, can't--know. The truth is that we have no idea why stock markets go up or down on any given day, and whatever reason we give is sure to be grossly simplified, if not flat out wrong.

Nassim Nicholas Taleb first made this argument in Fooled by Randomness, an engaging look at the history and reasons for our predilection for self-deception when it comes to statistics. Now, in The Black Swan: the Impact of the Highly Improbable, he focuses on that most dismal of sciences, predicting the future. Forecasting is not just at the heart of Wall Street, but it’s something each of us does every time we make an insurance payment or strap on a seat belt.

The problem, Nassim explains, is that we place too much weight on the odds that past events will repeat (diligently trying to follow the path of the "millionaire next door," when unrepeatable chance is a better explanation). Instead, the really important events are rare and unpredictable. He calls them Black Swans, which is a reference to a 17th century philosophical thought experiment. In Europe all anyone had ever seen were white swans; indeed, "all swans are white" had long been used as the standard example of a scientific truth. So what was the chance of seeing a black one? Impossible to calculate, or at least they were until 1697, when explorers found Cygnus atratus in Australia.

Nassim argues that most of the really big events in our world are rare and unpredictable, and thus trying to extract generalizable stories to explain them may be emotionally satisfying, but it's practically useless. September 11th is one such example, and stock market crashes are another. Or, as he puts it, "History does not crawl, it jumps." Our assumptions grow out of the bell-curve predictability of what he calls "Mediocristan," while our world is really shaped by the wild powerlaw swings of "Extremistan."

In full disclosure, I'm a long admirer of Taleb's work and a few of my comments on drafts found their way into the book. I, too, look at the world through the powerlaw lens, and I too find that it reveals how many of our assumptions are wrong. But Taleb takes this to a new level with a delightful romp through history, economics, and the frailties of human nature. --Chris Anderson






Customer Reviews
Average Rating: out of 5 stars

Rating: 1 out of 5 stars - Black Swan (Daffy Duck)
I'll save you the trouble and the money. Here's the message (if that's what you'd call it): Crazy things happen...be prepared...if you can. There, aren't you happy you didn't waste any piece of your life reading this book, like I did?


Rating: 5 out of 5 stars - How Lucky Do You Feel?
Taleb's explanation/rationalization of risk and how it has failed to be fully accounted for in the financial markets is startling. Going forward, as the current financial markets meltdown is (hopefully) resolved, all investors will want to consider Taleb's thoughts in developing strategies that will account for the the inevitable and unforeseeable outliers, Taleb's Black Swans, that are few but impossible to avoid. Failure to plan for the outliers reduces investment and money management to high stakes roulette.

There are certainly many fine points in the book to argue and Taleb lacks neither ego, humor or irony in his writing. This is not a technical manual for economists, but a narrative intended for the layman to illustrate the effects of risk, seen and unforeseen.

The importance of the book is the big picture concepts that are developed and their impact, which are conveyed meaningfully and often colorfully. Nit picking the finer points is rearranging the deck chairs on the Titanic.

This is a great volume to help understand where all our money went and how to minimize the possibility of a replay.


Rating: 5 out of 5 stars - Don't start here... but don't finish till you're done.
Start with Fooled by Randomness (Taleb's first book), The Logic of Life - similar idea (less business oriented not as technical) and Against the The Gods. Then take on The Black Swan. An amazing book (Thank you Taleb for allowing us to leverage for $25 all the hours and brain energy you put into making these concepts cohesive - high ROI). This publication offers facinating insight into how much of what we don't know about what we don't know can/may/will affect us and helps hedge against the unknown - all the while respecting that there will always be an element of the unknown that simply can not be predicted. And the impact of the highly improbable lurks. Irreverant and written with humor it's surprisingly readable for its heady content. You will be changed.

The only thing I didn't care for was the title of the book. I get its application, but I think there could have been a more applicable name - but who the hell am I to say?

After you're done with The Black Swan, if you're musically inclined, go grab This is Your Brain on Music - these authors must meet. Different industries - interesting applications to ideas from both.

Just keep reading! Literacy = Knowledge = Empowerment = Peace


Rating: 3 out of 5 stars - There were some problems with this book
1. The prose was EXTREMELY BLOATED. He took 5 sentences where two would have done just fine. One gets a sense of deja vu here. Ayn Rand is also someone who took at least 3x as much space as she needed to say anything. It is amazing that after all that space, she still didn't have that much to say. Even after all this, it appears that Taleb didn't have that much to say. I guess that you can't use book sales to predict how good/ useful a book will be. (But I guess we already knew that. Look at Danielle Steele.)

2. In continuing with the point about how long winded this book is: Was it really necessary to go on for *34* (!) pages before introducing the thesis of the book?

3. He could have taken some lessons from Malcolm Gladwell in how to pull the book together. (As in, how to take some observations that may not have been too interesting by themselves and connect them in some interesting way that makes a good book.)

4. The book, by rights, was about a 175-200 page book. (Did I mention how annoying it is to have to search through a book for the point?)

Good points:

1. The author really does have some interesting material. The only problem is that the reader has to search through SO MUCH rubbish to be able to find it.

2. There are a few witty quips here. Not many, but a few that had me laughing out loud.

Overall, this is definitely not worth more than a secondhand purchase. And if you are someone that is very judicious in using your time (=not searching through a book for the point), then this is not the book for you.


Rating: 5 out of 5 stars - Connecting esoteric dudes to your life ....
Nassim Taleb has connected mathematics and real life. Imagine an aspiring politician who predicts that her policies will create one million jobs, or the incumbent politician who reads his tea leaves and announces that his policies have created two million new jobs. You, like me, have probably wondered: "In such a big and complicated world, how do they know the impact of their actions with such singular clarity and certainty, and how also do they know the future so precisely and with such certainty?" Well, it turns out that they don't know. Or worse, they actually think they know - but they really don't know. Taleb tells you specifically how to discern when (and why) experts (and our own thinking) goes wrong. He explores how we think, learn, and reason. In doing so he fills a hug gap in today's public consciousness.

You could easily rename this book "how not to be taken for an intellectual chump by society's big thinkers". While avoiding that chump-fate you come to appreciate Benoit Mandelbrot, Karl Raimond Popper, and Fredrieck Hayak' and you are provided reasons to be skeptical of Carl Freidrick Guass (and the bell curve). Taleb connects these esoteric dudes to your life and to the "opportunities" presented to you in living it. This book is ultimately an essay about mathematical empiricism, philosophy, reason, risk, uncertainty, and real life. But what makes it a great read is that Taleb's writing makes you smile. He actually takes the time to "dis" entire professions (if not individual professionals and intellectuals) on the grounds of intellectual merit. His attitude makes it more fun.

Read this book (twice) if you want to more deeply consider the big challenges of the world (and if you actually want a modest shot at doing the right thing in response to them).

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