The Black Swan: The Impact of the Highly Improbable | Nassim Nicholas Taleb

The Black Swan: The Impact of the Highly Improbable | Nassim Nicholas Taleb | Good read

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The Black Swan: Th...

	The Black Swan: The Impact of the Highly Improbable Nassim Nicholas Taleb Random House, 2007 - 400 pages average customer review:based on 307 reviews view larger image
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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.

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A great book long over due

The author, I think, is one of the great thinkers of our time. I enjoyed his work. On YouTube, there is a long interview of Mr. Taleb by an old guy. It was a disaster in that the interviewer has almost no knowledge about what what Taleb was talking about (including chaos, ...) and consistently interrupts and makes annoying noises. Therefore, I could only partially tell what Taleb was trying to say and I knew it was something important. Being unable to completely hear and see what Taleb attempted to say, I bought his book. Anyhow, it is not a technical book, it's fun with lots of history knowledge and intriging to read. I recommended it to many friends already.

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Good read

Nutshell review - Although written in a slightly arrogant style the concepts, insights, and ideas expressed clearly show a highly intelligent and very well read author. Thoroughly interesting, thought provoking and well written book. Very worth reading.

Don't let Taleb's annoying asides stop you from reading The Black Swan

Taleb could use a good editor, no doubt about it. Taleb's writing can be very entertaining and informative when he does not distract and annoy the reader with childish throwaway asides. On the other hand, these asides act as road-signs: When you find one aside too many, just skip the rest of the chapter because it is of no major consequence. When Taleb takes to his subject, he writes like an adult. :)

The subject matter, which could have been covered in fewer pages, is about the fact that the normal or bell curve does not represent reality in many cases and in these instances predictions based on a normal distribution will be wildly wrong. I found particularly helpful some pointers about our understanding of issues like "evidence" which may or may not prove your assumptions and "randomness" (not what you learn in a casino) which may be Gaussian or not.

The rest of the book is dedicated to various subjects such as the history of the Levant, not to be confused with the Middle East; a diatribe against the Nobel prize for economics; the academic pecking order; Taleb's travelogue including Rome, Paris, Sidney, Boston; and praises for philosophers and mathematicians Taleb happens to like including Mandelbrot and Poincare.

The reason for reading this book, if you are an investor, is to make sure you adapt your portfolio to the reality of Black Swans and avoid wrong assumptions and bad theories such as MPT, Black-Scholes, and Efficient Markets. If you are not highly leveraged then Black Swans will be less traumatic for your portfolio. Maybe Taleb should have railed against excessive leverage.

While Taleb does mention his dumbbell style of investing, don't expect to find an investing tutorial. He provides some clues but you will have to create your own unique style of harnessing good Black Swans and avoiding the bad ones.

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First 2 chapters are worth the price

The research based information on the psychology of marketing, buying and selling that are described in the first two chapters are little known, facinating and extremely useful for those at many levels. Detailed discussions of "decoys" in marketing products, the relative comparisons involved in almost all buying decisions and the incredible effects of "free" merchandise such as Amazon's free shipping are given in an interesting and engaging way. After that the impact and interest of the information declines with each chapter and by chapter 7 it is hard to tell what the focus of the book (audio) is. A guess would be that after chapter three it just goes on to whatever the author found interesting and researched.

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