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The Black Swan: The Impact of the Highly Improbable | 
| Author: Nassim Nicholas Taleb
Publisher: Random House
Category: Book
List Price: $27.00
Buy New: $16.20
You Save: $10.80 (40%)
Rating:  353 reviews
Sales Rank: 98
Media: Hardcover
Edition: 1
Pages: 400
Number Of Items: 1
Shipping Weight (lbs): 1.5
Dimensions (in): 9.4 x 6.5 x 1.4
ISBN: 1400063515
Dewey Decimal Number: 003.54
EAN: 9781400063512
ASIN: 1400063515
Publication Date: April 17, 2007
Availability: Usually ships in 24 hours
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Amazon.com Review
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.
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| Customer Reviews: Read 348 more reviews...
 Little white lies November 17, 2008
Craig Wood (Menlo Park, CA)
1 out of 2 found this review helpful
"Lies, damned lies, and statistics." Nassim Taleb exudes a healthy disdain for traditional "Gaussian" statistics in his popular manifesto, The Black Swan. Jaded and toughened by several years as a derivatives trader on Wall Street, Taleb emerged from the profession with unique insights on how the world is missing the boat on analyzing risk. The book is certainly eye-opening, endeavoring to make its point in so many eclectic fashions that it's best consumed in small doses. It's a bit like reading Soros. The author doesn't pretend to toe the line on traditional perspective. In fact, he embraces such a healthy admiration for himself and his contrarian idea that it pays to step back every few pages and contemplate his assertions rather than taking too much of it at face value.
To his credit, Taleb makes some prescient comments in the book, originally published in 2007. Undoubtedly it's become a more popular read today than it was back then, with the global financial crisis now dominating the headlines. That footnote on p. 225 is a perfect example, in one fell swoop correctly asserting that Fanny [sic] Mae was "sitting on a barrel of dynamite", yet mis-spelling the company's name. A bit of editorial sloppiness notwithstanding, the book also suffers from being too wordy, with the same point being drilled home in chapter after erudite chapter, as if the reader were being forced to write "I UNDERSTAND THAT KURTOTIC RISKS ARE REALLY HARD TO PREDICT" 100 times on the blackboard.
I originally cracked open The Black Swan thinking that its lessons would be predominantly applicable to the world of investing. That's not the case. Although the author certainly made a killing as a professional trader, harvesting especially big gains during the crash of 1987 (see pp. 18-19 et al), he doesn't confine the black swan to the world of finance. Far from it. Sociology, economics, publishing, medicine, national security, and even the lowly turkey (see p. 41) - we all have plenty to gain by not losing sight of highly improbable risks.
 Beautiful! November 10, 2008
LiveTruly (CA USA)
1 out of 2 found this review helpful
One of those books that can change the way you see the world and (as usual for such books) it does so with humor, clear unpretentious language and examples. As another reviewer already said, the point of the book could have been stated in a couple of lines, but then we'd miss the great writing and more importantly, the internalization of what Taleb is talking about.
Some of my favorite parts:
* Turkey Problem (Induction): For 999 days, the turkey is loved and cared for by human beings. Why should it worry or have any doubts. But then on the 1000th day there's a surprise awaiting it. The title illustrates this point too. It only takes one contradiction, one knife, one black swan to prove wrong an infinity of verifications.
* Extremistan vs. Mundanistan: In a stadium full of people, one person, even the tallest in the world, won't offset the average height by very much. Same with age, or with weight, or caloric intake. These qualities are of Mundanistan. However, with things like money (ie. Bill Gates enters the stadium) one person can outweigh the entire group. Things like net worth are from Extremistan. Our prediction models are based on Mundanistan, however many of the things that can impact us most are from Extremistan (ie. impact of disease, medicine, wars, weather) and hence our prediction models don't work.
* Ludic Fallacy (seeing the map as the terrain) via Brooklyn Tony and the actuary. This is my favorite part of the book!
Thought experiment at a bar (this isn't an exact quote, sounded much better in the book):
Taleb: I tossed a fair coin 99 times and got heads each time. What are my odds of heads on the next toss?
Dr. John (the actuary): 50/50.
Tony: At least 99 to 1.
John: But why? The previous tosses have nothing to do with the next one.
Tony: You're either full of crap or a pure sucker to buy that fifty percent business. The coin's gotta be loaded.
I love it!
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