On 2010-03-19 Johnny Switchblade, Chicago, IL wrote: 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).. And summed up by saying Good but flawed. Currently The Black Swan: The Impact of the Highly Improbable has an overall rating of 6 over 10.
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Random House claimed 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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