Posts Tagged ‘Nicholas Taleb’

The Black Swan – Nassim Nicholas Taleb

Monday, December 3rd, 2007

Amazon Listing: The Black Swan

Overview
For hundreds of years, the commonly held truth in Europe was that all swans are white. All the evidence “proved” this. Then one day a European explorer in Australia discovered a black swan. The theory of white swan exclusivity died suddenly. The black swan metaphor serves as the label for a series of examples in which absence of evidence is confused with evidence of absence in this intriguing book. A Black Swan is defined as an unlikely event with three parts: it is unpredictable, it has significant impact, and when we look back at the event, we perceive an obvious explanation that makes it appear predictable when in fact it wasn’t. The author asserts that Google’s sudden economic prowess was a Black Swan and that 9/11 was a Black Swan. He makes a compelling argument in this book that Black Swans underlie almost everything about our world, from the rise of religions to events in our own personal lives.

According to Taleb, we not only miss the forest for the trees, we tend to see the grass and miss the trees as well. We concentrate on variations of things we already know and fail to consider what we don’t know. As a result, we are unable to estimate very well. Fortunately, the author doesn’t just pose the challenge. He does offer some simple techniques for turning black swans into grey swans and then benefiting from them.

The Author
Nassim Nicholas Taleb was a successful quant-trader working on Wall Street. He is a highly educated man and was until recently Professor at the University of Massachusetts at Amherst. He is a polymath with a strong grasp of history and mathematics, and most importantly in a book like this, a sense of humor.