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The Black Swan: The Impact of the Highly Improbable (edition 2008)

by Nassim Nicholas Taleb

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5,740137739 (3.72)1 / 88
Member:apostlion
Title:The Black Swan: The Impact of the Highly Improbable
Authors:Nassim Nicholas Taleb
Info:Penguin (2008), Paperback, 480 pages
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The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb

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English (123)  Spanish (3)  Italian (3)  Dutch (3)  French (1)  German (1)  Czech (1)  Swedish (1)  All (136)
Showing 1-5 of 123 (next | show all)
Taleb's book pursues several central ideas that seem fairly commonsensical. The major theme is about the titular Black Swans - events that are ignored by forecasters (be they financial, social, or whatever) because they are either considered too unlikely to be worth taking into account or are not even noticed due to the narrow focus or inadequate models being used. Taleb points out that, rather than being the effect of gradual change, many of the most important changes to our world, for better or worse, are massive upheavals caused by unpredicted events. Financial crises, inventions, wars; so often these things are unpredicted and seem unpredictable, and cause fundamental transformation.

Taleb doesn't advance a model for predicting these things - indeed, part of his thesis is that the fervour for prediction tends to lead to a narrowing of foresight and the expression of false certainty, making the effect of the subsequent (and inevitable) unforeseen events all the more cataclysmic. Instead, he argues for a mindset that is open to seeing the possibilities rather than focusing on certain expectations.

Some of the blame for this outlook he places on the ubiquity of the Gaussian bell curve, or normal distribution, which is excellent for ranking the spread of certain characteristics (height and weight across a population, for example, where the vast majority will fall within a narrow band of the mean and outliers becoming increasingly rare - you probably know lots of people who are six feet tall, a few who are 6'4", and would be dumbstruck on meeting someone 8'), inadequate in areas with a massive disparity (income, book or record sales) and disastrous when used as a predictor - something unlikely can have a far larger effect than all the many median-scale common occurrences, such as a tsunami or a financial meltdown.

The author uses the terms Mediocristan (the place in which events follow the normal distribution) and Extremistan (the place where a significant number of events fall outside of it) and argues that we live with the dual problem that, while many of the vital mechanisms of our world are extreme we tend toward a certain blindness that leads us to think they are mediocre, that we like to form patterns and narratives that seem to make sense of the world and are then unable to respond when the world refuses to fit into these patterns.

While I find this difficult to dispute - especially within the utterly pretend-scientific world of economics which is the target of much of Taleb's vitriol - he tends to argue in terms so broad that this does somewhat dilute the strength of his points. For instance, he rails against the bell curve as a blemish on cognition, eventually conceding that it is just not the tool for the job to which it is being put, and this is emblematic of his approach.

Another example is his preference for the company of people with a broad intellectual scope rather than narrow expertise, and his extension to arguing that the former are generally preferable in all fields. Again, this is difficult to argue with on the face of things - many intellectuals whom I admire greatly have argued against the tendency of our educational system to train students in a limited fashion rather than educate them thoroughly - but the fact is that many of the most brilliant people who have provided the greatest boon to society are narrowly focused experts - not through training, perhaps, but because of targeted obsession in a particular field. If Taleb is arguing for a greater scope of education and interdisciplinary appreciation, I don’t think the point can be denied but, again, his argument is scattershot and it is not entirely clear what he is arguing for.

A final problem is that, early on, Taleb betrays our trust. He tells the story of a Russian author who, unable to get publishers interested in her experimental novel, published privately and became a huge success. Some time later he admits that she is a complete fabrication - and then returns to her in other examples throughout the book. I assume that he is drawing attention to the fallacy of narrative, about which he complains that we place too much trust. We are, as others have said, animals that tell stories to make sense of the world. This meta-textual trick of course makes us take what he writes with a pinch of salt, as we should, but as he uses personal anecdotes frequently throughout to support his points, the thought that he may well be making them all up further weaken his case.

All this said, The Black Swan is an interesting read from a man who obviously has some good ideas and relishes intellect and discussion. I imagine that he is a voluble and entertaining speaker - and probably an excellent conversationalist and dinner guest.
( )
  Pezski | Jun 8, 2017 |
Second edition: contains Postscript essay.

This deserves a fuller review, but I'll keep it brief because it's taken me a long time to actually reach the end of the book and some of the detail is lost. And there lies part of the problem, because this book started out as a five-star work because of the quality of the writing and the impact of the message but drifted down in my estimation the further I progressed. I think it was just the repetition of the message that wore me down, because at the end of each of the four parts I was considering knocking half-a-star off my final evaluation. In the end, the Postscript essay NNT (yep, that's how he refers to himself) added in the revised edition pulls it back to make a solid four-star evaluation.

So, here's a self-confident and erudite chap pulling down the walls of the economic establishment. Or at least trying to, because the overly self-confident and nowhere near as erudite members of that establishment just carry on blithely ignorant of the message about the Black Swan event ('all swans are white' until you actually travel to the southern hemisphere and expose that fallacy) that lurks around the corner if you put your trust in economic models. And the message is that stark - all economic models, not just some. I recently saw NNT on television (Newsnight, BBC2) where he moderated that somewhat by saying models can be effective at the micro level, but break down at the macro level.

He convinced me; but that was pushing at an open door. I've designed a computer system to support money market traders, and the rules I was given convinced me it's just the same as a casino. Except the '0' (and '00' for those in some locations) mean that you don't just lose your stake but your whole wad.

Read it, then, but I'll quite understand if you abandon the attempt part way through because of the arrogance on display. The second edition with the additional essay saved it for me, so please use that by preference. Note that it will be your loss if you don't stay the course. ( )
1 vote Noisy | Mar 10, 2017 |
An enormously huge book to make a point that should not have taken this many pages to make. Over and over again. It was a good book but man, oh, man... did this guy get paid by the page? ( )
  marshapetry | Oct 14, 2016 |
At times an arduous read, not made any easier by the author's arrogant mannerism, but he does get us to question our desire to find top-down patterns, to make predictions, to force things into Gaussian Bell curves. While I still believe some form of framework is necessary to help in the decision-making process, my personal takeaway comes in his call for us to embrace randomness, and a return to common sense, simplicity and real-world pragmatism. In the end, it's really just all about balancing between empiricism and (learned) intuition. ( )
  perhapstoopink | Sep 25, 2016 |
At times an arduous read, not made any easier by the author's arrogant mannerism, but he does get us to question our desire to find top-down patterns, to make predictions, to force things into Gaussian Bell curves. While I still believe some form of framework is necessary to help in the decision-making process, my personal takeaway comes in his call for us to embrace randomness, and a return to common sense, simplicity and real-world pragmatism. In the end, it's really just all about balancing between empiricism and (learned) intuition. ( )
  perhapstoopink | Sep 25, 2016 |
Showing 1-5 of 123 (next | show all)
Since the book was written prior to the current situation, many of the insights will seem prophetic. For instance, “regulators in the banking business are prone to a severe expert problem and they tend to condone reckless but (hidden) risk taking.” Some might think that the book specifically predicted the current market and economic crisis—wrong. The book is about the expectation that it could occur.
added by dtw42 | editBusiness Economics, Gerald L Musgrave (pay site) (Aug 11, 2011)
 

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Pietiläinen, KimmoTranslatorsecondary authorsome editionsconfirmed
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To Benoît Mandelbrot, a Greek among Romans
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Before the discovery of Australia, people in the Old World were convinced that all swans were white, an unassailable belief as it seemed completely confirmed by empirical evidence.
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Die beste Strategie besteht also darin, möglichst viel auszuprobieren und möglichst viele Chancen, aus den sich Schwarze Schwäne ergeben könnten, zu ergreifen.
Die narrative Verzerrung ist Ausdruck unserer eingeschränkten Fähigkeit, Reihen von Fakten zu betrachten, ohne eine Erklärung in sie hineinzuweben oder, was dasselbe bedeutet, gewaltsam eine logische Verknüpfung, einen Beziehungspfeil zwischen ihnen herzustellen. Erklärungen binden Fakten zusammen. Sie sorgen dafür, dass wir uns viel leichter an sie erinnern können, dass sie mehr Sinn ergeben. Diese Neigung kann uns aber in die Irre führen, wenn sie unseren Eindruck, dass wir verstehen, verstärkt.
Wir sind soziale Tiere; die Hölle sind andere Menschen.
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Table of Contents from Worldcat:

Umberto Eco's antilibrary, or how we seek validation. The apprenticeship of an empirical skeptic ; Yevgenia's black swan ; The speculator and the prostitute ; One thousand and one days, or how not to be a sucker ; Confirmation shmonfirmation! ; The narrative fallacy ; Living in the antechamber of hope ; Giacomo Casanova's unfailing luck : the problem of silent evidence ; The Ludic fallacy, or the uncertainty of the nerd -- We just can't predict. The scandal of prediction ; How to look for bird poop ; Epistemocracy, a dream ; Appelles the Painter, or what do you do if you cannot predict? -- Those gray swans of Extremistan. From Mediocristan to Extremistan and back ; The bell curve, that great intellectual fraud ; The aesthetics of randomness ; Locke's madmen, or bell curves in the wrong places ; The uncertainty of the phony -- The end. Half and half, or how to get even with the black swan -- Epilogue : Yevgenia's white swans.
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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."--BOOK JACKET.… (more)

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