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The Black Swan: The Impact of the Highly Improbable | 
 enlarge | Author: Nassim Nicholas Taleb
Creator: David Chandler
Publisher: Recorded Books
Category: Book
List Price: $39.99
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Avg. Customer Rating:  328 reviews
Sales Rank: 20862
Media: Audio CD
Number Of Items: 12
Shipping Weight (lbs): 0.7
Dimensions (in): 5.8 x 5.3 x 1.5
ISBN: 1428166556
EAN: 9781428166554
ASIN: 1428166556
Publication Date: August 2007
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Amazon.com
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
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| Customer Reviews: Read 323 more reviews...
 Fantastic perspectives that increase your own horizons September 5, 2008
1 out of 2 found this review helpful
Loved it. Great thinking, fantastic perspectives..like this gem referring to Umberto Eco's library "He is the owner of a large personal library (containing thirty thousand books), and separates visitors into two categories: those who react with "Wow! Signore professore dottore Eco, what a library you have! How many of these books have you read?" and the others -- a very small minority -- who get the point that a private library is not an ego-boosting appendage but a research tool. Read books are far less valuable than unread ones. The library should contain as much of what you do not know as your financial means, mortgage rates, and the currently tight real-estate market will allow you to put there. You will accumulate more knowledge and more books as you grow older, and the growing number of unread books on the shelves will look at you menacingly. Indeed, the more you know, the larger the rows of unread books."..
And that is just one example. See the wealth of other reviews here for more. If you even think you might be interested, don't hesitate!
 The author seems to fall into ludic fallacy(page 182) which he wants to dispel September 1, 2008
1 out of 3 found this review helpful
page 14: I still do not understand why the author thinks that an educated person is supposed to guess better than a layman about the outcome of a war. In fact any person is as much expert in that endeavor as any other.
page 21: I still can not see the relationship between war and finance in the context.
for a philosopher examining problems in induction the boundary between true/false is not well drawn.
page 44: I wonder if he is naive. What does he expect in finance business, all reasonable people?. It is finances, it is almost expected that some people take unreasonable risks(with diabolical intentions sometimes) out of greed or out of wishful thinking. These factors are often excluded from his analysis.
I guess he also confuses the word "actuarial science" with "science". He frequently uses the word "science" for "finance" that has no roots in any of pure sciences, nor there are any independent mechanisms connecting the past and present.
From a person guarding against certainty it is ironical to see evolutionary psychology in use on page 53.
page 56: While talking about negative empiricism Taleb says "If I see someone kill I can be practically certain that he is a criminal". No, by no definition of "criminal/crime", killing necessarily implies crime (e.g. self-defense), all the while ignoring the gender bias. I do not want to be a killjoy here, but when accusing people of faulty logic in one paragraph, one can not afford to make an incorrect implication right in the next paragraph.
It is weird for a self-declared skeptical empiricist to resort to psychology while attacking mathematicians.
The references are not cited in the text, though listed in bibliography, which means its not clarified which piece is taken from which reference.
When the author generally ridiculed "fitting equations to something happened in the past" he swept all of cosmology into irrelevance with one stroke of pen.
page 87: We are social animals; hell is other people. // Nice quote
page 97: Got it wrong about hippo campus. This is where short term memory is translated into long term one.
He wants to attack actuarial mathematicians most of the time but ends up generalizing to all mathematicians. As a self-declared skeptical empiricist he is skeptical about truth in mathematics, what he does not understand is that even pure mathematics has engineering applications (e.g. control of hard drive motor). Nature does, to some extent, follow mathematics. This shows lack of depth in analysis.
page 107: Taleb criticizes "hardened by the gulag": The report is probably talking about psychological hardening which is supported by a neurobiological process described in "In search of Memory" by Eric Kandel. The author assumes it to be physiological hardening and refutes it with the rat example. In the next paragraph he calls himself philosopher.
page 129: In what Taleb describes "scientific mentality that is arrogantly called Enlightenment" agrees with Samuel Huntington's claims in The Clash of Civilizations that "the orthodox people do not share with the West the principles of Enlightenment".
page 129: He shouts "Life stands outside Platonic fold". No. pretty much all of engineering and many of pure sciences lie within and are verifiable and/or testable at the same time. These fields pretty much changed the society/culture for almost a century now.
page 154: Towards the end of the page - the author's question has geography in it and it is not surprising that the answers had that too, yet he complains about it.
page 182: He wanted to dispel Ludic fallacy and here is one instance he falls right into it. Talking about left and right handedness of people he brings Plato into picture, ridicules him and then says that the left and right handedness of molecules (stereo isomerism) matters considerably in this. There is no known evidence that stereo isomerism plays a role in this and he does not present any.
What he fails to realize is that for people money is not the most important aspect of life. It is important but only after family and relationships, so even if his analysis is right(I think it is) his calls may go unheeded.
He also does not realize that people, whatever profession they are in are partly there due to financial security and not always to do their jobs perfectly. If the system is staying afloat with Guassian approach they would not need to change it. If they are shown tangible benefits with some results of the fractal analysis they may listen to the author. After all, at least some are after money.
chapter 18: He complains why philosophers are not questioning financial experts when they invest their money. A philosopher's job is not about figuring out details of finance, it is about figuring out details in philosophy which may or may not interfere with finance. A philosopher need not necessarily act upon his/her own arguments.
page 296: If what the author says about uncertainty is assumed to be truth about uncertainty(I do), even then in the authors own words towards the end of book, people may not necessarily heed his advice, especially as author says he put lots of things like culture, before truth, let alone acting on the truth.
As the author puts earlier, the Black Swan helps in getting rid of a big player and benefiting masses; so why fight (even negative) Black Swan in the first place, (for nationalists) as long the money stays within the country.
The author really does not make it clear early in the book the boundary between what he is attacking and what he is defending. Since the author mentions Richard Dawkins' book The Blind Watchmaker, he can take a cue from Dawkins' books about defining the boundary strictly and at the beginning so that the reader stays focused during the reading. Only after reading half the book was the boundary clear to me.
He claims himself to be humble at times but there are times where he delivers unreasonable and unfair criticism, sometimes just jumping to conclusions, like the on page 107.
By generalizing his attacks on Platonic ideas including mathematics, Taleb ignores much of physics. Mathematics still is useful in physics, the most rigorous science.
 Black Swan August 31, 2008
1 out of 3 found this review helpful
Whether you risk manage for a living or just want to open your mind to all possibility this is a great read.
fun and interesting yet uneven August 30, 2008
0 out of 1 found this review helpful
Let me put it this way: I enjoyed some chapters more than others. The first two thirds of the book is an excellent introduction into epistemology and the problem of induction. To the lay reader without experience in such matters, epistemological issues will be brought forward in a highly entertaining and relevant manner. Many questions and ideas that I (and I assume most readers) have sometimes pondered (though not as eloquently) are articulated by Taleb here. For instance, our modern day categories appear to be arbitrary: for instance, why is that most pro-choice people are also anti-strong military? These ideas seem to have nothing to do with one another yest there is a strong tendency for these and other beliefs to be held together. What this illustrates is our innate desire to reduce complexity - and that is our problem; that is why we persistently ignore, forget, or underestimate about Black Swan events.
Taleb frequently speaks in parables. The most prominent being his differentiation between Mediocristan (governed by Gaussian probability) and Extremistan (where Black Swans flourish).
Since I know nothing about business and economics, I was surprised to learn that much of the economic modeling and predicting is based on Gaussian probability which of course is ridiculous. Taleb chooses to constantly mock the financial 'experts' for this reason. The author comes down so hard on Gaussian statistics that the casual reader may think such methods are fundamentally flawed (or an 'intellectual fraud' to use the heavy handed languae of Taleb). However the domain in which Gaussian statistics is OK is still large and important to learn. Possibly this is not the case for finance though.
The weak part of the book I found to be at the end where Gray Swans are discussed - these are events that are near to Black Swans but we have some mathematics to get some understanding of them. I found the transition from talking about White and Blacks Swans to Gray Swans to be poor. He should have spent more time on Gray Swans.
I expected some discussion of Pascal wagering but was disappointed to see only a small paragraph or two on it in which Taleb appears to misunderstand Pascal's point.
Overall, a good book to read. This has sparked my interest in the subject.
Food for your brains August 28, 2008
1 out of 2 found this review helpful
This book is good. Maybe I don't even understand how good it is. The way Taleb is writing gets to your ego; he feels so cocky. But, yes, man has a point. I started to laugh to myself and to my capabilities of "estimating" and even "thinking" while reading this book. Taleb has interesting view point to life; don't try to predict it, or forecast it, life will fool you anyway, sucker! Don't believe in your most valued economic forecasters, they don't know much, unfortunate... for them. Expose your self to "black swans", positive ones hopefully, try to make negative black swans to be gray swans for you, if it is grey one you have prepared yourself well for future. These swans are rare events in life, which take place even we would not like them to happen. Even one event can make a difference, and most likely a shocking difference.
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