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The Black Swan

The Impact of the Highly Improbable

By Nassim Nicholas Taleb

(186)

| Hardcover | 9781400063512

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Book Description

From Booklist
In business and government, major money is spent on prediction. Uselessly, according to Taleb, who administers a severe thrashing to MBA- and Nobel Prize-credentialed experts who make their living from economic forecasting. A financial trader and current rebel with a cause, TContinue

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

Home Contact us Posts Comments One of the most enjoyable publishing phenomena of the last fifteen years has been the rise of the popular science book. From maths to evolutionary biology, from economics to quantum physics, publisher’s catalogues are a ... (read full critics)

bookgeeks published on Fri, 24 Sep 2010

Possibly Maybe

On the eve of the 2006 hurricane season, the National Hurricane Center forecast a “hyperactive” summer and fall, with eight to 10 Atlantic cyclones; instead there were five, smack on the 20th-century average. At the beginning of 2006, The Wall Street ... (read full critics)

nytimes published on Sat, 18 Sep 2010

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27 Reviews

4 people find this helpful

Expected more from Taleb due to the experience with Fooled by Randomness. Readers of the last book may expect another mind blowing journey, but Black Swan seems to me only a continuation of what Taleb has started, an elaboration of the same thing. Anyway, if you haven't read the original (Fooled by ... (continue)

Expected more from Taleb due to the experience with Fooled by Randomness. Readers of the last book may expect another mind blowing journey, but Black Swan seems to me only a continuation of what Taleb has started, an elaboration of the same thing. Anyway, if you haven't read the original (Fooled by Randomness), you should definitely check that out.

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Prof Nemo said on Jun 13, 2007 | Add your feedback

3 people find this helpful

Make Sudden Sense

Changing is the nature of Nature. It not only happens all the time but also always in a sudden. So 'surprise' should be the ways things are.Are you always shocked by things that turned out unexpectedly? Get used to it.But re ... (continue)

Changing is the nature of Nature. It not only happens all the time but also always in a sudden. So 'surprise' should be the ways things are.Are you always shocked by things that turned out unexpectedly? Get used to it.But remember, you can't predict what will be happening.And yet we should bear in mind that there are many things we do not know rather than we think we know. No, you won't face the reality more easily after read this book. But I still think we should read it to keep ourselves wise and humble.

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Jet2 said on Apr 9, 2008 about the Paperback edition | Add your feedback

1 person find this helpful

Really enjoyed the book and the thinking embedded in the Black Swann. I first came accross Talebâs ideas at the Long Now Society (I think). When I had the book in my hands at the local bookstore, I decided to finish a few other books first. That afternoon, a co-presentor at a conference showed me ... (continue)

Really enjoyed the book and the thinking embedded in the Black Swann. I first came accross Talebâs ideas at the Long Now Society (I think). When I had the book in my hands at the local bookstore, I decided to finish a few other books first. That afternoon, a co-presentor at a conference showed me the book and I asked to borrow it â succesfully. Serendipity is everywhere.
My next steps: bring the book back, ask for a renewal and read it again. Apperently a great compliment to any author, and this one as well. I took only four pages of notes, there is much more hidden in this book (with a thorough literature list and notes at the end). Not just a great read, a great book to learn from (for me). Thought provoking.

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Jw van Eck said on Aug 21, 2011 | Add your feedback

Extremely useful book (particularly if you're planning to re-use the black swan metaphor in learning contexts). It is also an enjoyable read, even if sometimes there are repetitions and the book (especially with the new part "on robustness and fragility") feels quite long.

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dario villa said on Jan 14, 2012 about the eBook edition | Add your feedback

Trying to connect the "dots" in this Taleb's work

Here are some of the inconsistencies inside the book (the Penguin revised edition):-
1. Taleb put up a quiz to the graduate students about the odds of exceeding one standard deviation under the fat tail compared to the Gaussian (p. 357). His ‘right’ answer is lower. In this sense, the odds of crash ... (continue)

Here are some of the inconsistencies inside the book (the Penguin revised edition):-
1. Taleb put up a quiz to the graduate students about the odds of exceeding one standard deviation under the fat tail compared to the Gaussian (p. 357). His ‘right’ answer is lower. In this sense, the odds of crash in the world of finance under any fat tail distribution should be even rarer than Gaussian; while the Gaussian already predicted that the occurrence of crash should have taken place every several billion lifetimes of the universe (p. 276). It does not make sense since the crisis happened almost every 10 years, from 1987 crash to 1997-8 Russian debt crisis and Asian financial turmoil, as well as 2008-9 Global financial crisis. Taleb seems to confuse the vanishingly small ‘contributions’ of outliers to the overall Gaussian distribution (which should be interpreted as ‘probability’ or ‘odds’), with the ‘impact’ of the rare event to the ‘total’ (which should be the expectation value.) (p. 357) Taleb explanation of the lower odds under fat tail because of its greater impact seems to be a bit tricky, as we should compare both distributions with the same amount of losses. To me, it is rather counter-intuitive as under any chosen tail the area under Gaussian should be lower than the fat-tail, not the reverse.
2. Taleb tried hard to snub Messrs of Blacks, Scholes and Merton about their Nobel-crowned formula by saying they merely made it “more acceptable” rather than they “invented” it, as Ed Thorp was an earlier person to mention it (p. 279). But it is also the author himself to say “it is those who derive consequences and seize the importance of the ideas, seeing their real value, who win the day.” His “godfather” B. Mandelbrot was not the first person to invent the pieces but to “connect the dots”. Charles Darwin was also not the first person to “invent” the survival of the fittest. (p. 256) Therefore, it is not a valid denigration of BSM since it goes against his own words that there is nothing wrong to “dig out predecessors’ work to back up their own claims”. Also, when we “connect the dots”, how do we avoid the narrative fallacy as the historians?
3. How do Taleb know he survives because “school of empirical medicine” wins over scholastics school? This statement also suffers from reverse engineering. (Water puddle problem)
4. One of the main themes of the book is “We just can’t predict”, while it is the human nature to plan or predict to satisfy one’s own psychological needs. Thus Taleb suggested us “Just be a fool in the right places” (p. 203), instead of total avoidance of planning/forecasting.
a. But what do we do with Mandelbrotian modeling? We can’t rely on them for any precision when it comes to forecasting, as long as their function is merely to show us the locations of Black Swan, or to make Black Swan grey. Taleb owed us a little more light on what to do with a right map if Mandelbrotian happens to be one, so long as we are pretty sure the Gaussian is wrong in Extremistan finance world.
b. When it comes to “small” things, we are better to “be human”. When it comes to our possessions, career or train schedule, all of which should be no “bigger” things in Taleb’s mind, we are better off to practice stoicism as “missing a train is painless”, which itself is rather inhumane in my opinion as it takes extra energy not to care. Paradox arises here.
5. Taleb proposed the respect for Mother Nature and “things that have worked for a long time are preferable” since “they are more likely to have reached their ergodic states” (p. 371). But it is also the same Taleb who developed the main theme of the book – the Black Swan with the “problem of induction” that “No amount of observations of white swans can allow the inference that all swans are white” (From Taleb’s first book “Fooled by Randomness”). Our mere thousand years civilization with records of observations of Mother Nature may mislead us to see “White Swans” as “ergodic states”. Our blind belief of representation of Mother Nature may also lead us to “problem of induction”.

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Martingale Hill said on Sep 13, 2011 about the Paperback edition | Add your feedback

I was expecting an introduction to the issues and challenges in understanding big crashes in financial markets. Unfortunately, the author's tone is very sensational and the book does not seem very informative. I got bored in reading this book and I started reading the scientific literature instead.

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Davide said on Aug 15, 2011 about the Paperback edition | Add your feedback