The Black Swan: The Impact of the Highly Improbable |  | Author: Nassim Nicholas Taleb
Publisher: Random House Trade Paperbacks
Category: Book
List Price: $17.00
Buy New: $11.56
You Save: $5.44 (32%)
Avg. Customer Rating:  318 reviews
Sales Rank: 88806
Media: Paperback
Number Of Items: 1
Pages: 400
ISBN: 081297381X
Dewey Decimal Number: 650
EAN: 9780812973815
ASIN: 081297381X
Publication Date: January 13, 2009 (In 146 Days)
Shipping: Eligible for Super Saver Shipping
Availability: Not yet published
|
| Also Available In:
|
| Similar Items:
|
| Editorial Reviews:
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
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.
From the Hardcover edition.
|
| Customer Reviews: Read 313 more reviews...
 Disaster Planning for Black Swans August 18, 2008
1 out of 1 found this review helpful
I have found Mr. Taleb's book to be a very interesting and thought provoking read. As an experienced emergency management professional and instructor, I find it calls into question the whole process of risk and hazard analysis. While the book is certainly intellectually stimulating and should cause one to be very careful with planning assumptions, I question its value in any direct application. While looking in the rear view mirror we don't know how many Black Swan's were prevented by well conducted risk and hazard analyses based on historical occurrences. As Mr. Taleb points out, history has overlooked the successful interventions and un-occurred disasters.
 Nothing useful that anyone in a scientific field would benefit from August 16, 2008
0 out of 1 found this review helpful
Talebs point is painfully simple. For some reason he seems to think that it is very unique and it is almost laughable that he thinks people in academia are so near sighted as to not realize much of what he presents.
He fails to provide any new model for evaluating risk... It's obvious that we can't predict the future, yes markets could collapse if a nuke hit america... or some other "Black Swan" occurrence happened. But the fact is we can't really practically use any of these events to model risk.
One example I found to be pretty stupid was when he talked about the banking crisis (where South American countries all simultaneously defaulted on their loans) ... and implied that this meant that "bankers were not conservative". His basic vice is that many strategies produce very little volatility yet still contain chaotic possibility of an extremely large loss. Unfortunately he never offered a practical alternative to what conservative should be defined as. Humans have limited tools to evaluate risk, I think everyone realizes that our models aren't perfect (yet unfortunately Taleb seems to think that he is the only one that has had this insight). This pattern occurs throughout the book -- Taleb chastising people for wrongly evaluating future occurrences without offering any practical alternative.
I didn't buy a book simply be told that ... "well...humans aren't oracles they can't predict stuff...sometimes crazy stuff goes down... here are some examples... oh yeah and some advice: Be open minded"... which in essence is what this book wastes 400 pages doing.
Shoot the editor August 12, 2008
The obvious premises of this book could have been related in 50 pages or less. I agree with those who commented that the author is self-engrossed. I've never wanted to skim-read a book more than this one.
 useless pages are more than 85% of the book August 3, 2008
3 out of 4 found this review helpful
I bought the book because it is on best selling list, 4 stars and an interesting topic. However, quite a disappoinment. The black swan idea is quite refreshing but it is revealed completed in the first 20 pages. The rest are just repeative garbage.
I guess the author needs to make a living too and he is obviously paid by the number of pages. He simply turned a good article into a over-weight book.
A good point, but Taleb overdoes it July 30, 2008
3 out of 5 found this review helpful
Nassim Taleb has written a very enthusiastic book, and provides some very tasteful food for thought. The problem is, Taleb himself is far too pleased with his own work.
Talebs confidence in his own ideas helps him write a book which is easy and fun to read. For an economist, interested in the philosophical background of the science, he offers plenty of very interesting references. I will most certainly dig more into the thoughts of Karl Popper and Benoit Mandelbrot.
But Taleb's confidence also helps him make several rather banal mistakes. His main adversary is the statistician Gauss and his normal distribution. Taleb is right that many economists and financial analysts rely far too much on normal distribution. But figure 7 on page 238 reveals that Taleb himself does not understand the concept pretty good: "..as your sample size increases, the observed average will present itself with less and less dispersion".
His confidence also makes Taleb jump to conclusions and make banal errors (the French Maginot Line, the main line of defence built in the 1930s, was not built where the Germans attacked France in World War One). Taleb even goes in his own primary trap: the confirmation bias. Every little thing happening by chance is counted as evidence of his Black Swan theory. But the story of penicillin is famous just because it was sensational, not because it is the normal way of making major medical breakthroughs.
It is probably not worthwhile to read this book, although there are grains of gold in it. The book is written in the spring of 2007, before subprime. In a footnote Taleb is writing about the risk of Fannie Mae: it "seems to be sitting on a barrel of dynamite." Touche!
|
|
|
