The Black Swan, Second Edition: The Impact of the Highly Improbable: With a new section: "On Robustness and Fragility": Incer

4.4 4.4 out of 5 stars | 7,379 ratings

Price: 19.69

Last update: 09-09-2024


Top reviews from the United States

Brandon
5.0 out of 5 stars A masterpiece of insightful information!
Reviewed in the United States on February 18, 2023
The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb is a thought-provoking and fascinating book that challenges readers to think differently about the role of randomness and uncertainty in our lives. The book offers a fresh perspective on the impact of rare, unpredictable events - or "black swans" - on our world, and provides readers with insights and strategies for navigating the complexities of a rapidly changing world.

The book is divided into three parts. In the first part, Taleb introduces the concept of black swans and explains why they are so important. He argues that black swans are rare, high-impact events that are impossible to predict, yet have a profound effect on our world. He uses examples from history, economics, and other fields to illustrate the impact of black swans on our lives, and explains why we tend to underestimate their importance.

In the second part of the book, Taleb explores the concept of "antifragility" - the idea that certain systems actually benefit from stress and volatility. He argues that many of our current systems, from financial markets to political systems, are too fragile and vulnerable to black swan events. He offers strategies for building antifragile systems that can better withstand the shocks and disruptions of the modern world.

In the final part of the book, Taleb provides readers with practical advice for navigating a world full of black swans. He offers tips for managing risk, making decisions in uncertain situations, and living a more fulfilling and meaningful life.

One of the strengths of the book is Taleb's engaging and accessible writing style. He has a talent for explaining complex ideas in clear and understandable language, making the book easy to follow and enjoyable to read. He also has a keen sense of humor, and his writing is often peppered with amusing anecdotes and observations.

Another strength of the book is its relevance to our current world. The COVID-19 pandemic is a perfect example of a black swan event, and Taleb's insights and strategies for managing uncertainty and risk are more relevant now than ever before.

However, the book is not without its limitations. Taleb's writing style can be overly repetitive at times, and some readers may find certain sections of the book to be overly technical or dense. Additionally, while Taleb's insights and strategies are certainly valuable, they may not be applicable or accessible to everyone.

Overall, The Black Swan is a thought-provoking and engaging book that challenges readers to think differently about the role of randomness and uncertainty in our lives. The book offers valuable insights and strategies for navigating a rapidly changing world, and is sure to be of interest to anyone looking to gain a deeper understanding of the complex systems that shape our world.
mtspace
5.0 out of 5 stars Irreverent Romp - What We Don't Know, Why We Can't Know it, and How to Get By Anyway
Reviewed in the United States on July 16, 2014
Taleb's romp through the land of what we do not know, what we cannot know, and how we deceive ourselves into thinking we know so very much more than we actually do is both fun and insightful. He takes observations that he made as a trader and uses them as a launching platform into the many pitfalls and traps we fall into in considering any problem.

I bought this book with Mandelbrot's Behavior of Markets, and for the same purpose. I wanted to get a strong intuitive understanding of the consequences of the difference between the actual behavior (power-law) and the assumed behavior (Gaussian) of markets. I wanted to know what the power-law relationships were, so that I could build my own statistical models. And I wanted an analysis of real data showing that, in fact, markets in question do follow power-law relationships. Were I to rate this book solely on its ability to deliver on these expectations, I would have to give it two stars; for this book has nothing to do with the actual empirical facts. It is, instead, a highly rhetorical appeal to us to use empirical facts in making decisions about the market while it nevertheless manages to completely dodge the task of presenting any real market data.

The inquiry here is much broader. Taleb is painstaking, almost encyclopedic, in his enumeration of ways in which our understanding of information breaks down. He draws on ideas from Greek, Roman, Arab, French, and English thinkers spanning more than two millennia. He also draws from the fine work of contemporaries Kahneman and Tversky which demonstrates how - when guessing about things - we all systematically underestimate our probability of being wrong by about a factor of twenty. He asserts that people with MBA's and those running large financial institutions do so a great deal more than, say, taxicab drivers and trash collectors.

He visits physical models which prove that we cannot know much about the physical world, such as the three-body problem. The point is that when even physical systems that can be described very exactly in mathematical equations cannot be predicted with arbitrary accuracy, what's the hope of predicting things for which we don't even know the variables or the math one might use in describing them? Here he misses some opportunities by needlessly scoffing at the uncertainty principle, and by failing to include comments by one towering physicist of the twentieth century, probably Von Karman*, about how no physical phenomenon seemed spookier - i.e. more difficult to describe accurately using mathematics - than turbulent flow in fluids. This is an unfortunate omission since Mandelbrot actually uses the term "turbulence" to describe the fluctuations in market prices of goods and securities.

One reaction to Taleb's arguments about how little we can ultimately know and on what shaky ground our beliefs lie is to stand, like a deer in the headlights, waiting for better information. Taleb argues that this is a mistake. It might be a bit better to proceed, looking for evidence that would prove one's course of action wrong, then modify one's model of reality and repeat the process. Doing this has the advantage that one can learn quite quickly about how any problem is bounded, and get some sense for the shape of the space inside. He quotes Warren Buffet: it is a great deal better to be approximately right than it is to be precisely wrong. And when choosing among things to believe, he advises us to rank beliefs not by their implausibility but by the harm they might cause. Although there are robust methods that draw on both judgments, this is generally very sound advice.

The book is highly irreverent. In financial circles it is seen as blasphemous, not just because it flies in the face of conventional wisdom, but because the author has so much fun demolishing revered ideas. Anyone who can take it seriously and follow its advice ought to be much better at evaluating information and making decisions. This quality gives you a much better chance of becoming rich and famous like Taleb - though as Taleb might explain, there is still a vanishingly small chance of this happening. The down side is that following Taleb's advice is likely to make one a great deal less promotable (especially in financial firms) because - according to Taleb - reaching high levels of a company depends almost exclusively on making others believe you know things about which you are actually completely clueless; and only sociopaths and very self-deluded people do this convincingly.

This suggests that one would read the book for the sole joy of knowing that you're the only person in the room who is sane enough to understand how little you actually know about pretty much anything.

Good Reading

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*Taleb makes great use of footnotes, and I recommend reading them all. Some of the best material in the book is in them. Van Karman is most famous, perhaps, for his role in adjudicating what to do after the collapse of the Tacoma Narrows bridge - arguably a Black Swan event. One day not long after this long suspension bridge was erected, it began twisting and oscillating in a 50 MPH wind. Some minutes later it collapsed. Von Karman was called in to evaluate what happened. He told the town council that the vortex shedding frequency of the bridge in a 50 MPH wind happened to closely match the natural vibrational frequency of the bridge. The bridge had gone into harmonic oscillation which created stresses that were much higher than those created by static loads for which it was designed, and this was why it failed. Although it is to avoid collapsing bridges via harmonic oscillation that British soldiers fell out of step when crossing bridges over several centuries prior, the town council had never heard of anything like this happening before. They declared "It was a very well-built bridge" and therefore "we shall build it exactly as it was before." To which Von Karman replied "If you build it exactly as it was before, it shall collapse exactly as it did before." To their credit, they had the bridge re-designed.

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