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 enlarge | Manufacturer: Random House
Category: EBooks
List Price: $17.95
Buy New: $9.99
You Save: $7.96 (44%)
Avg. Customer Rating:  352 reviews
Sales Rank: 71
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
Availability: Usually ships in 24 hours
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| Customer Reviews:
 A fine antidote to gullibility -- A Must Read! May 1, 2007
17 out of 24 found this review helpful
A fine antidote to gullibility - A Must Read!
According to critic Harold Bloom, Hamlet's predicament is not "that he thinks too much" but rather that "he thinks too well," being ultimately "unable to rest in illusions of any kind." The same could be said for philosopher, essayist and trader Nassim Nicholas Taleb, who finds something rotten in misguided yet supremely confident investment gurus, traders, hedge fund managers, Wall Street bankers, M.B.A.s, CEOs, Nobel-winning economists and others who claim that they can predict the future and explain the past. Like everyone else, says Taleb, these so-called "experts" fail to appreciate "black swans": highly consequential but unlikely events that render predictions and standard explanations worse than worthless.
Talebst book starts with this: Before 1697, teachers confidently taught European schoolchildren that all swans were white. They had little reason to think otherwise, since every swan ever examined had the same snowy plumage. But then Dutch explorer Willem de Vlamingh landed in Australia. Among the many unlikely creatures down under - odd, hopping marsupials called kangaroos, furry duck-billed platypuses, teddy bear-like koalas - Vlamingh found dark feathered birds that looked remarkably like swans. Black swans? Indeed. Once observed, they were as unmistakable as they had been unimaginable, and they forced Europeans to revise forever their concept of "swan." In time, black swans came to seem ordinary.
This pattern is common. Just because you haven't seen a black swan, doesn't mean that there are no black swans. Unlikely events seem impossible when they lie in the unknown or in the future. But after they happen, people assimilate them into their conception of the world. The extraordinary becomes ordinary, and "experts" such as policy pundits and market prognosticators kick themselves because they didn't predict the (now seemingly obvious) occurrence of the (then) unlikely event. Think of the advent of World Wars I and II, the terrorist attacks of 9/11, the popping of the 1990s Internet stock bubble, or world-changing inventions like the internal combustion engine, the personal computer and the Internet. Cultural fads like the Harry Potter books are the same. These events and inventions came out of nowhere, yet in hindsight they seem almost inevitable. Why?
The human mind is wonderful at simplifying the onslaught of today's "booming, buzzing confusion" of data. This makes perfect sense: After all, the brain is the product of evolution, which works with what it has, and so it has not crafted some new, ideal cognitive mechanism. The human brain is a marvel, but it is built for living in hunter-gatherer groups on the African savannah 200,000 years ago. Then, it just needed to be good enough to allow humans to survive until they reached reproductive age. Simplifications, mental schemas, heuristics, biases, self-deception - these are not "bugs" in the cognitive system, but useful features that allow the human mind to concentrate on the task at hand and not get overwhelmed by a literally infinite amount of data. But human simplifying mechanisms are not without their costs. Take stories, for example.
Stories help people remember and make sense of the past. Think of a typical business magazine profile of a successful businessman. The story begins in the present, after he has become rich beyond his wildest dreams. The story then cuts back to his humble beginnings. He started with nothing and wanted to get rich (in terms of story structure, his "dramatic need"). He faced obstacle after obstacle (perhaps he had a rival - the "antagonist"). But he made shrewd decisions and flouted the wisdom of the Cassandras who counseled caution ("Idiots!"). As success built on success, he amassed a fortune. He retired early, married a model and now has brilliant children who play Chopin blindfolded and will all attend Ivy League colleges. His virtues will be extolled in a B-School case study. Wide-eyed M.B.A. students will sit rapt at his feet when he visits their schools on a lecture tour promoting his latest book. He is a superman, an inspiration.
Now consider an alternative hypothesis: He got lucky. His putative "virtues" had nothing to do with his success. He is, essentially, a lottery winner. The public looks at his life and concocts a story about how brilliant he was, when, in fact, he was merely at the right place at the right time. This is the "ludic fallacy" (ludus means game in Latin): People underestimate luck in life - though they ironically overestimate it in certain games of "chance." Even the businessman himself falls victim to flawed thinking through the self-sampling bias. He looks at himself, a sample of one, and draws a sweeping conclusion, such as, "If I can do it, anyone can!" Notice that the same reasoning would apply had he merely bought a winning lottery ticket. "I'm a genius for picking 3293927! Those long odds didn't mean a darn thing. I mean, after all, I won didn't I!"
Not all success is luck. In some professions, skill matters (for example, if you are a dentist), but luck dominates in others. In the case of the inspiring businessman, consider his population cohort. Where are all the similarly situated people who started out like him and have the same attributes? Are they also rich? Or homeless? Usually you can't find this sort of "silent" disconfirming evidence. Artistic success provides a perfect illustration. While Balzac is famous now, perhaps countless other equally talented writers were producing comparable work at the same time. Yet their writings are lost to posterity because they did not succeed. Their "failure" hides the evidence that would undercut Balzac's "success" as a uniquely great writer. The evidence is silent, lost in the graveyard of history.
The mind uses many more simplifying schemas that can lead to error. Once people have theories, they seek confirming evidence; this is called "confirmation bias." They fall victim to "epistemic arrogance," becoming overconfident about their ideas and failing to account for randomness. To make their theories work, people "smooth out" the "jumps" in a time series or historical sequence, looking for and finding patterns that are not there. Their conceptual categories will limit what they see; this is called "tunneling." They turn to "experts" for help, but often these expert opinions are no better - and often they are worse - than the "insights" gained from flipping a coin or hiring a trained chimp to throw darts at the stock listings. Worst of all, people steadily fail to consider "black swans," the highly consequential rare events that drive history.
Taleb's style is personal and literary, his heterodox insights are rigorous. This combination makes for a thrilling, disturbing, contentious and unforgettable book on chance and randomness. While Taleb offers strong medicine some readers may find too bitter at times, we prescribe it to anyone who wants a powerful inoculation against gullibility. One of the best non-fiction books of this decade.
Better Than Fooled By Randomness. A Must Read. April 29, 2007
29 out of 48 found this review helpful
Added on 11 August 2007:
The book is still pretty and interesting at second read. I reread the book for doing a local review (for SWA - Famous Indonesian Business Magazine), and feel elevated again. I think i even grasp something more and enjoy it very much.
I come to think that most of things really do happen with some high portion of randomness. And the Black Swan is something that always happen even at the very small probablility.
Books often available a bit late at this part of the earth, except Harry Potter 7, haha so, I always review books that are somewhat a bit old ( give a couple of months before good selling books are imported).
This book is not easy to read, and does need some concentration. It has one big concept, the Black Swan, but has plenty of small anecdotal stories that wrap well around the whole narative.
If this kind of book makes the New York Time Bestseller list for quiet a while, it is definitely worth reading. Yah, BTW Nassim's success in wrinting is a Black Swan by itself.
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Original review:
The long awaited book after the Fooled by Randomness finally arrived at my lap (this is Surabaya, Indonesia) brought by DHL, such a happy moment. I have been afraid that the second book will not be as attractive as the former, but I m wrong! This one has a better NARRATIVE ;-), and still contain so much information and thoughts that often force you to put the book doen and think.
Fooled by Randomness is a Black Swan, so does The Black Swan, things Highly Improbable, a rare event, highly sellable book that is highly intelectual as well. The book contains Hume, Popper, Plato, Kahneman and Tversky, combined with Nassim own story and life. All deliciously weaved into a readable fabric that will glue you to your seat (or bed! In mycase) for days.
There are three type of books: The How To book, the book that will show you how to do something, The Motivational book aka Self Help, and books that "Change The Way You See Things", a perspective change book, such as this one. Books that make you rethink your own perspective and change the way you see life.
With strange chapter title like "Umberto Eco's Antilibrary" (How to seek validation) to "Living in the Antechamber of Hope", you got a chockfull of delicious stuffs, in a sense like "Bitter Sweet Chocolate" ( and NOT Milk Chocolate), which for certain type of people will be the ultimate delicious read.
A warning: this is not an easy read in the usual term, although that this is an easier read compare to Fooled By Randomness and I predict that this book will go to the "best selling" fame and glory. You have to digest and think to get the full impact. For easier read, you can read "The Halo Effect" (finished in a day) which is also a great book with similar line of thought.
I thank Nassim for such an enjoyable reading week ( I read fast, yet it took a week, to finish this) which has sharpen my mind and see life in a more "correct" way. My wife keep complaining that I mention too much of "Randomness" and "Black Swans" lately during our life's activities. Gosh! The Effect of a great book.
Can the Sequel be Better? Yes !! April 28, 2007
19 out of 25 found this review helpful
As most movie goers have from experience, most sequels are o.k., but rarely better. In the case of "The Black Swan", I can clearly state, as others have, that Mr. Taleb pulled the rabbit and bettered his earlier "Fooled by Randomness" which was already a great book on uncertainty and failures of Gaussian (i.e. Bell Curve) probabilities as an application.
Though the Bell Curve can explain many activities that are in relative equilibrium, it does not fit well with real day-to-day observations like the weather, markets, wealth distribution, bacteria growth, and etceteras. That is because we live in a world that is getting more complex and more "recursive" (i.e. contains feedback loops) every day. As the recursiveness gets more intertwined in society, the power laws tend to place us in the critical state which is a prime and fruitful place for Mr. Teleb's Black Swans. The fruitful place discussed is in Extremistan and far away from the Gaussian place that many (if not all) of us have been taught much of our lives. Within Extremistan, thought models of 4,5, or 6 sigma events are not applicable and lead one into a false sense of security.
As our world in which our evolutionary machinery has made us gullible to many topics as examples of, anchoring, narrative fallacy, confirmation errors, envy, and combinational probabilities (as well as many others), knowing that we don't know what we don't know is a start in the search (and protection) from Black Swans. If you liked the 1st book, you should love the sequel as a more critical narrative will keep you entertained for hours and hopefully better prepare you for a more recursive society to come.
The Future is Now April 26, 2007
11 out of 29 found this review helpful
...unless you can't predict it.
This book is the antithesis of the market predicting books that make everything seem so predictable. It is a refreshing change for those of us who don't think everything is as simple as we wish it were.
Frank Scoblete: author of Golden Touch Dice Control Revolution! and Golden Touch Blackjack Revolution!
Many important ideas, many flaws that detract from the message April 26, 2007
656 out of 733 found this review helpful
This is an entertaining and enlightening book, and fairly easy to read. It has an important message regarding how the world works; that the world is governed not by the predictable and the average, but by the random, the unknownable, the unpredictable -- big events or discoveries or unusual people that have big consequences. Change comes not uniformly but in unpredictable spurts. These are the Black Swans of the title: completedly unexpected and rare events or novel ideas or technologies that have a huge impact on the world. Indeed, Taleb argues that history itself is primarly driven by these Black Swans.
It is convincing argument, entertainingly presented with plenty of sarcasm, and indeed, anger, by Taleb. For example he rails against the academic community, economists (including specific names), and Nobel Prize committee. Considerable numbers of his arguments "ring true" to me, that is my experience in life confirms that they are more accurate than the traditional approach. Like any important work, 90% of what is in the book is not original; that does not make it less important. Taleb's contribution is in integrating the material together, and showing how these different ideas are tied to the Black Swan.
The themes include: winner-take-all phenonomen, numerous effects of randomness on the world, the invalidity of the Gaussian Bell Curve to most things in world, concepts of scalablity, numerous instabilities in the world, especially the modern world where information travels so quickly, the fallacies about people's inability to predict the future. The importance of these ideas, Taleb's ability to weave them together into a single theory, and the ability of this theory to change the way you look at the world, means the book easily deserves my highest recommendation.
However, the book does have many flaws, unfortunately -- unfortunate because I believe they will take away from the credibility of the message, which is in important one. The are numerous minor flaws such as, for example, the inexplicable invention of a fictional author (disclosed a few pages later), when certainly there must have been some real example that would have worked better. Another example is repeated jabs about the French; these may be amusing but I just don't think they have a place in work like this. There are also diatribes against specific people, including famous economists, which, though amusing, and possibly justified, demonstrate a high level of anger by author and take away from his credibility. Often he also overreaches, for example in saying the usual combination of anti-abortion and pro-death penalty or the opposite combined views of pro-abortion and anti-death penatly cannot be explained logically, when in fact widely known theories such as George Lakoff's (in Moral Politics) have explained hows these groups of views are entirely consistent.
Another flaw is that Taleb seems to go a little toward the extreme of saying that we can predict almost nothing about the future, and though he does not say so explicitly, this seems to imply we have no moral responsibility to the future. This, combined with Taleb's advice to the reader about their behavior based on the "Black Swan" view of world just rubbed me the wrong way, for several reasons. One is that Taleb personally has very little in common with most people; never having as far as I know had a regular career (essentially what he calls non-scalable, e.g. dentist, engineer, baker) he nevertheless recommends that people choose these kinds of careers rather than a scalable career (e.g. financial trader, author, actor which are subject to a few lucky successful people and a lot of failures). This advise is odd first because Taleb is in a non-scalable profession (derivatives trader, then hedge fund manager) -- indeed it appears he is quite wealthy. Even more odd because he says all these types of non-scalable types of work are boring and evens makes sarcastic comments (the book is extremely sarcasm heavy) for example about dentists being able to do well by diligently drilling teeth for 30 years. The second things that bothered me is that Taleb seems be somewhat amoral to me; in this type of book where plenty of his own emotions come through, plenty of his personality, he has plenty of criticism of others for their wrong models and wrong view of the world, and how this has hurt the world, but there remains a lack of moral responsibility to his advice.
Perhaps the best comparison I could make are to other important works that do not suffer from these flaws, for example the Age of Fallibility by George Soros and Irrational Exuberance by Robert Shiller (1st and 2nd editions). But probably Black Swan will sell better than either of these because of it's "edginess," i.e. aggresiveness; I personally have a distaste for this approach.
Despite my criticisms, the main ideas of the book as so important as to merit reading and indeed great consideration.
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