The Black Swan: The Impact of the Highly Improbable | 
 enlarge | Manufacturer: Random House
Category: EBooks
List Price: $17.95
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Avg. Customer Rating:  307 reviews
Sales Rank: 83
Format: Kindle Book
Media: Kindle Edition
Edition: 1
Number Of Items: 1
Pages: 400
Dewey Decimal Number: 003.54
ASIN: B000PDZFCK
Publication Date: April 17, 2007
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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.
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| Customer Reviews: Read 302 more reviews...
 First 2 chapters are worth the price June 26, 2008
The research based information on the psychology of marketing, buying and selling that are described in the first two chapters are little known, facinating and extremely useful for those at many levels. Detailed discussions of "decoys" in marketing products, the relative comparisons involved in almost all buying decisions and the incredible effects of "free" merchandise such as Amazon's free shipping are given in an interesting and engaging way. After that the impact and interest of the information declines with each chapter and by chapter 7 it is hard to tell what the focus of the book (audio) is. A guess would be that after chapter three it just goes on to whatever the author found interesting and researched.
 A great book long over due June 19, 2008
1 out of 2 found this review helpful
The author, I think, is one of the great thinkers of our time. I enjoyed his work. On YouTube, there is a long interview of Mr. Taleb by an old guy. It was a disaster in that the interviewer has almost no knowledge about what what Taleb was talking about (including chaos, ...) and consistently interrupts and makes annoying noises. Therefore, I could only partially tell what Taleb was trying to say and I knew it was something important. Being unable to completely hear and see what Taleb attempted to say, I bought his book. Anyhow, it is not a technical book, it's fun with lots of history knowledge and intriging to read. I recommended it to many friends already.
Don't let Taleb's annoying asides stop you from reading The Black Swan June 16, 2008
1 out of 1 found this review helpful
Taleb could use a good editor, no doubt about it. Taleb's writing can be very entertaining and informative when he does not distract and annoy the reader with childish throwaway asides. On the other hand, these asides act as road-signs: When you find one aside too many, just skip the rest of the chapter because it is of no major consequence. When Taleb takes to his subject, he writes like an adult. :)
The subject matter, which could have been covered in fewer pages, is about the fact that the normal or bell curve does not represent reality in many cases and in these instances predictions based on a normal distribution will be wildly wrong. I found particularly helpful some pointers about our understanding of issues like "evidence" which may or may not prove your assumptions and "randomness" (not what you learn in a casino) which may be Gaussian or not.
The rest of the book is dedicated to various subjects such as the history of the Levant, not to be confused with the Middle East; a diatribe against the Nobel prize for economics; the academic pecking order; Taleb's travelogue including Rome, Paris, Sidney, Boston; and praises for philosophers and mathematicians Taleb happens to like including Mandelbrot and Poincare.
The reason for reading this book, if you are an investor, is to make sure you adapt your portfolio to the reality of Black Swans and avoid wrong assumptions and bad theories such as MPT, Black-Scholes, and Efficient Markets. If you are not highly leveraged then Black Swans will be less traumatic for your portfolio. Maybe Taleb should have railed against excessive leverage.
While Taleb does mention his dumbbell style of investing, don't expect to find an investing tutorial. He provides some clues but you will have to create your own unique style of harnessing good Black Swans and avoiding the bad ones.
Good read June 13, 2008
1 out of 2 found this review helpful
Nutshell review - Although written in a slightly arrogant style the concepts, insights, and ideas expressed clearly show a highly intelligent and very well read author. Thoroughly interesting, thought provoking and well written book. Very worth reading.
 The Paper It's Printed On June 7, 2008
0 out of 8 found this review helpful
Actually I love this book and can't get enough Taleb, mostly additionally, in the form of podcasts. I just couldn't help but posting a comment on the quality of the paper and the binding. Especially a book like this which is full of fascinating facts and figures you're going to want to put your finger on later, you might be inclined to highlight, right? The ink bleeds right through the paper to the other side. How frustrating. I buy hardbacks knowing that the paperback paper is too thin to highlight. Is this how it's going to be now? There are other indications of cost cutting. The binding ripping after one reading. Inside cover full of bubbles where the glue didn't quite catch. Especially with a Black Swan of a blockbuster hit, couldn't you spend the extra couple of cents to make a quality product?
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