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.


*2nd Edition, With a new essay: "On Robustness and Fragility"

Product Details

• Amazon Sales Rank: #219 in Books
• Published on: 2007-04-17
• Released on: 2007-04-17
• Original language: English
• Binding: Hardcover
• 366 pages

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

Review
“The Black Swan changed my view of how the world works.”—Daniel Kahneman, Nobel laureate
 
“Hugely enjoyable—compelling . . . easy to dip into.”—Financial Times
 
“A masterpiece.”—Chris Anderson, author of The Long Tail 
 
“Idiosyncratically brilliant.”—Niall Ferguson, Los Angeles Times



From the Trade Paperback edition.

Customer Reviews

Exposes the Flawed Assumptions of the Bell Curve Nudists, Those Who Always Decide by Using Normal Distribution Models
Do you agree that being hit with a tsunami has a totally different effect from a normal high tide? If so, you'll be glad that Professor Taleb has decided to point out that all tsunamis (low probability, high impact events) need special attention, even if they occur infrequently. His advice: Minimize exposure to large potentially harmful events while taking maximum exposure to large potentially helpful events.

I was particularly thrilled to see that Professor Taleb points out the foolishness of economists in preparing theories without checking the data to see if the theories work in practice . . . the greater foolishness of the Nobel committee granting prizes for such work . . . and the greatest foolishness of relying on the advice of such economists.

Why all the fuss? Many phenomena display high predictability and the differences from the average usually don't make all that much difference to you and me (that quality is captured by a statistical display called a bell curve where most cases cluster near the average and vary symmetrically from the average). But in some cases, there are rare events that change the reality so strongly (like a tsunami can do on the negative side or a selection as an Oprah book of the month can do on the positive side) that it would be the height of foolishness to ignore the possibilities.

When it comes to assets, wealth, book sales, athlete pay, and lots of other places where there is lots of competition, there are geometric rewards for a few while the mass do poorly. These are long-tail events (the way statisticians talk about lots of variation from the norm). But almost all human decision making assumes that there is little variation from the norm.

The book concentrates on helping you understand why such a potentially harmful bias exists (brain structure plays a large role). We also assume a continuance of what's in front of us, even when there's obvious evidence to the contrary.

I was pleased to see these descriptions. I constantly run into the same problem with executives who are subject to stalled thinking and don't see opportunities right under their noses to accomplish 20 times as much. I liked Professor Taleb's points about overcoming our ignorance of antiknowledge . . . our tendency to discount what we haven't experienced or measured. I frequently see executives estimate that the best anyone will ever do at a level that someone already exceeded in 1880. In fact, in many important areas such as herbal health remedies, our actual knowledge is receding very rapidly, turning into antiknowledge.

To help break you free of how you think now, he uses a metaphor (a black swan -- is that really a swan?) and new terms (Mediocristan -- where the bell curve is the right way to think about things and Extremistan -- where powerful in effect black swans lurk). I found this tendency to be both helpful and not. It made it clearer to me what he was talking about the first time, and then made things seem muddier after that.

I suspect that for most people, the metaphor itself will be the biggest problem. Do you really care about black swans, per se? I don't. I think Professor Taleb would have done better to use two metaphors (one positive -- perhaps like formation and attraction of wealth to the Bill and Melinda Gates foundation and the foundation's effects on world health, and the other negative -- perhaps like a tsunami) than to focus on one that is mostly about definitions (black swan).

If you agree with Professor Taleb's main points, you will probably want to get lots of advice about how to do so. He's specific only in regard to two areas (wealth management and book publishing opportunities). That's a shame. Perhaps he will write a future book that will go more into solutions.

I was surprised to see that the book pretty much ignores the scenario work that many organizations use to identify the large impact, unlikely occurrence events and to devise strategies that work better under all possibilities. If that subject interests you, I suggest that you read books like The Art of the Long View and Inevitable Surprises by Peter Schwartz, Scenarios by Kees van der Heijdan, and The Irresistible Growth Enterprise by Carol Coles and me.

I was pleased to see that Professor Taleb also feels that many black swans can become "grey swans" by employing new prediction methods (although we cannot predict specifics, we can often predict up or down reasonably well in some situations). That has been my experience is seeing that Modern Portfolio Theory makes no sense in unsettled market conditions while more refined methods built stock-by-stock can be quite predictive over the short run in identifying over and under performers, even during unsettled market periods.

Check your models before you use them each day. Otherwise, you've just checked into work without your brains intact.

Keep your eyes and ears open whenever you are away from bell curves!

Compelling and radical thinker
This is one of the titles that you shakes you by the limbs with intelligence and radical thought processes. Taleb has serious disagreements with MBA's and PH'Ds in psychology, business, finance, and socialogy, in that one cannot assume the data they study in the past can be projected forward and analyzed with the same tools.

In finance, the market is not static, and the business cycle and stock market cannot use normal distributions and curves based on time, because innovations, be them technical, financial, technological have no standard dynamics or predictable market reactions. By its very nature, the flow of dollars is unpredictable by the market participants, and the news is more propaganda than crystal ball accurate.

On the very inside of Wall Street, there are many super wealthy who will wait with infinite patience, and react with swift big bucks to take advantage of the uncertainties before John Q. Public has the slightest hint of what is really going on, and before he has the chance to adjust his portfolio. Taleb feels this is where the real players of the world navigate with tremendous results.

On a side note, if you happen to be rich and single, also pick up the best seller in the asset protection category, which doubles as a very funny dating guide, called The Professional Bachelor Dating Guide - How to Exploit Her Inner Psycho.

The Black Swan has very brilliant theories and thought packed on every page. Get it and rattle your brain some.

The most important events in life cannot be predicted.
Taleb's primary thesis is that our lives are governed by black swans, the highly improbable, the circumstances that cannot be foreseen. A turkey will live its life in eager anticipation of the farmer who feeds it. In no way can it anticipate the day the farmer will decide to serve it for Thanksgiving dinner. Most of the world did not expect 9/11 or the impact it would have on their lives. J.R. Rowling could not have predicted the phenomenal success of her Harry Potter series. Mr. Taleb differentiates between those parts of our lives that are governed by mediocristan and those by extremistan. Mediocristan are those parts of our existence that fit a bell curve like who well we do on a test or our size relative to others or the time it takes to run a quarter mile compared to others. Variations from one person to another are limited by intelligence and physicality. Our income relative to others is governed by the laws of extremistan. It is not limited by any practical element. Knowing the income of one person gives no clue as the relative income of another if we take the example of me and Bill Gates or the average income of any 10,000 people if Bill Gates is included in that number. Mr. Taleb definitely provides another perspective on the world. One that's definitely worth reading.