The Black Swan: The Impact of the Highly Improbable |  | Author: Nassim Nicholas Taleb
Publisher: Random House
Category: Book
List Price: $28.00
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Rating:  511 reviews
Sales Rank: 530
Media: Hardcover
Edition: 1
Pages: 366
Number Of Items: 1
Shipping Weight (lbs): 1.5
Dimensions (in): 9.4 x 6.5 x 1.4
ISBN: 1400063515
Dewey Decimal Number: 003.54
EAN: 9781400063512
ASIN: 1400063515
Publication Date: April 17, 2007
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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 its 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
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.
*2nd Edition, With a new essay: "On Robustness and Fragility"
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Showing reviews 1-5 of 511
 Good but flawed March 19, 2010
Johnny Switchblade (Chicago, IL)
0 out of 1 found this review helpful
Taleb has penned an interesting book that attacks parts of modern Financial and Statistical theory. Specifically- he points out that the Bell Shaped Curve of distribution that many business students learn about in school is fundamentally flawed because it fails to properly account for Black Swans- highly improbable events. The Bell Curve is not appropriate because it is not scalable. Data sets that have small variances- the average height of human beings- fit well inside a Bell Curve. But things like stock index prices and measures of individual wealth do not lend themselves to standard deviations about a mean. Taleb has some very interesting criticisms of portfolio theory and modern day measures of risk- that are widely used by most businesses. His ideas in this book force a new conversation around risk and how we should prepare for unlikely occurrences. Overall- I enjoyed the book.
However, I'd echo some of the criticisms of other reviewers. 1) The book is poorly edited. It is far longer than it needs to be. It could have been chopped down to 200 pages without losing any of the central tenets, 2) The hubris of the author is, occasionally, overwhelming. Taleb does himself and his readers a disservice by engaging in way too much self-aggrandizing sidebars, and 3) In line with criticism number 2- Taleb spends a good portion of the book (the parts that should have been edited out) trying vainly to impress? Overhwhelm? his readers with his knowledge of obscure French writers and philosophers and writing about the schadenfreude he felt after the stock market crash in October 1987. One example, among many, tangential journeys he takes the readers on. For all his braggadocio about being a pragmatical empiricist- I found his literary meandering to be the hobgoblin of an undisciplined mind (to paraphrase a famous quote).
 Gets you thinking...but a bit boring at times March 17, 2010
Randy Lahey (Hong Kong)
Amazing book that has some great views on the world. The book is kind of depressing if you have invested your life into finance or economics. But if you think about some of the ideas that he has, you will look at the business world in a much more different light.
Bad parts: LOTS of references to obscure and dead sociologists. It's OK if he tells what their idea was and explains it, but often he just says a name or a book and assumes that you have read it or heard of the person.
Overall the book is a must read for any economics, finance, psychology or business person. There are some parts that can be skipped over if boring, but at the heart of it, the book will change how you look at life.
 Applied mathematics meets philosophy March 8, 2010
V. Leonelli
1 out of 2 found this review helpful
Dusted this masterpiece off and re-read it again due to the market uncertainties. Times like this everyone has an opinion, but no one has a clue. Taleb's unique background, being a student of randomness, a Wharton MBA, and a former derivatives trader at a hedge fund provides the perfect backdrop for analytical thought in moments of fear and sheer speculation.
These current chaotic financial fears breaths truth in so many statements he makes in Black Swan. I'd highly recommend people pick up a copy for keeping themselves grounded and reducing the urge to make rash decisions. The main thesis is to persuade people to understand the past does not predict the future - aberrations occur that destroy our deeply seated logic and certainty of the ways things should react to uncertainty, but suddenly don't.
All in all, a fascinating, timeless treatise from a philosophical point of view and market based one.
A book that provoke your thought March 7, 2010
lnmlnm (Parsippany, NJ United States)
1 out of 1 found this review helpful
This book is very opinionated but it provide a lot of provocative insights, one of few book that shake your conventional belief on the subject of capital market.
A little knowledge is a dangerous thing March 7, 2010
Robert Jeges (Melbourne, Australia)
0 out of 1 found this review helpful
Only a limo driver (without belittleing the trade) would use induction outside a formal system, or apply Gauss distribution to a single observation, although to be fair the author gives warning about reading chapter 15 with its confused discussion of the normal distribution. Overall entertaining and to be recommended, but not to be taken too seriously.
Showing reviews 1-5 of 511
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