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.

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Product Details

• Amazon Sales Rank: #170 in Books
• Published on: 2007-04-17
• Released on: 2007-04-17
• Number of items: 1
• Binding: Hardcover
• 400 pages

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.

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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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From AudioFile
Taleb is overly reliant on heavy irony, but, happily, David Chandlers narration rescues the authors repetitive discussion of his theory of randomness and the potential impact of random events. Using his own life to examine the actual impact of unexpected and unpredictable events, Taleb recounts the story of his childhood and rise as a Wall Street financer. Chandlers delivery of sardonic lines is often tongue-in-cheek, a tone that is less grating on listeners than the smug tone of the authors words. Chandler infuses Talebs theory of the Black Swan with an energy that propels listeners to learn more, rather than focusing on Talebs verbosity. Even if Talebs theory doesnt interest, Chandlers delivery manages to enhance this production. M.R. © AudioFile 2008, Portland, Maine-- Copyright © AudioFile, Portland, Maine

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, Taleb is mathematically oriented and alludes to statistical concepts that underlie models of prediction, while his expressive energy is expended on roller-coaster passages, bordering on gleeful diatribes, on why experts are wrong. They neglect Taleb's metaphor of "the black swan," whose discovery invalidated the theory that all swans are white. Taleb rides this manifestation of the unpredicted event into a range of phenomena, such as why a book becomes a best-seller or how an entrepreneur becomes a billionaire, taking pit stops with philosophers who have addressed the meaning of the unexpected and confounding. Taleb projects a strong presence here that will tempt outside-the-box thinkers into giving him a look. Gilbert Taylor
Copyright © American Library Association. All rights reserved

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Customer Reviews

What happens to the Turkey on the 1001st day?
I can't comment on the science behind this book. I will say that - at least from this layman's perspective - Taleb offers magnitudes of insight on the ideas of unpredictability and randomness, and does a bang-up job of upsetting the status quo.

The book is centered on the concept of a Black Swan - an event that lies outside the narrow periphery of our knowledge, has an extreme impact or causes a major upset (whether it be cultural, financial, political, et al.), and is characterized by a rampant slew of retrospectives - all the media, the so-called "experts", and the authorities suddenly have the details on why it happened.

For instance, we are told by historians of the outbreak of WW2: "tensions were mounting" throughout Europe, and that there were "escalating crises" abound, but according to bond prices (which offer a good understanding of history, says Taleb), there was no sign of this to speak of! "One would suppose that people living through the beginning of WW2 had an inkling that something momentous was taking place. Not at all."

The idea of retrospective distortion and over-interpretation fascinates me. How people attempt to fit messy empirical reality into neatly organized interpretations! The problem with our predictions, and our retrospectives, is that they are often framed from a naive perspective that we live in a place called Mediocristan, a place where randomness is mild, or Type 01, when we really live in a place called Extremistan - where reality is characterized by wild, unpredictable events that completely upset the averages of the bell curve.

...We come out the other side mistrusting the arrogance of almost all predictions! What does bird poop have to do with one of the most fundamental physical theories? Do we think that our wars are "under-control", or do we consider the unpredictability of conflict - that a small conflict might someday spiral unpredictably out of control and result in the decimation of the entire human race!?! How has the Nobel Prize been exploited to sell methods of market-interpretation that are completely unscientific, yet universally accepted and completely institutionalized? We are treated to an interesting investigation of this arrogance which dominates so many fields of study and indeed, we find that it is an arrogance deeply embedded in our minds!

Despite the seemingly bleak picture, The Black Swan is great fun to read and offers tips ("be as hyper-conservative and as hyper-aggressive as you can!") on how to cope and perhaps even thrive in this chaotic, simmering soup we call Civilization.

If you are like me, you will enjoy reading about things like the narrative fallacy, confirmation bias, the ludic fallacy, the problem of induction, et al. My only criticism of book is it's repetition, but honestly - I hardly noticed.

A world few people live in.
Wealth Odyssey: The Essential Road Map For Your Financial Journey Where Is It You Are Really Trying To Go With Money?

This work says more about the world of hedge funds and speculation than it does about the world most people live in. "Everything is possible, yet only one thing happens" is a quote from "Chances are ... Adventures in Probability" by Michael and Ellen Kaplan, a much easier to read work without laborious philosophy wrapped around otherwise good information. Yes, things happen. "Pop! Why Bubbles are Great for the Economy" by Daniel Gross, explains that unexpected things do indeed happen, which is often a good thing.

Nothing can be predetermined or forecast. There is more to life than worrying about black swans, which may never happen. The illusion is that even if one did know, how would knowing it make life any different after it happened? Yes, for those not living in Pompeii it mattered. Nevertheless, a super volcano for example (or any other cataclysmic event - geophysical or financial), a true black swan, would change life, as we know it, globally - unstated, but a result of his definition. To approach investing just in case a black swan comes along has more of an impact on the present results, for those holding such beliefs, since the odds of the black swan are small. Indeed, any traumatic black swan would affect everyone's results and all would be in the same boat. Otherwise, it wouldn't be a true black swan, simply a localized, unforeseen, occurrence for those holding such views.

Nebulous with the odd bright spot
Any book that attempts to explain a nebulous concept such as this is hard to write but the presentation of this book is very cumbersome.

The only parts I liked was Chapters 1-3 which has some interesting observations about rare events and how most humans are hardwired to miss the rare event and Chapters 15-17 are quite good: I think most readers will relish the discussion on bell curves and standard deviations.

Chapters 5-15 are completely unreadable in which the author "discusses" the works and hypothesis of unknown french-philosophers with weak connections to the book's subject.

This book doesn't offer a clue on predicting rare events and offers a lot of hindsight advice. Most readers will find Taleb's suggestions totally inapplicable to their work. The biggest shortcoming of this book is its treatment (lack of) conditional probability and its dismissal of intelligent action as merely "random" events.