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ashrafulla 's review for:
The Black Swan: The Impact of the Highly Improbable
by Nassim Nicholas Taleb
The author does a good job of explaining the main issues regarding prediction in today's financial markets, with an extension really to most human matters. Taleb is the philosopher in this book; the finance part is just his background and what the news could immediately latch on to. His essential claim (I hope I got this right) is that many real-life things have a scalable distribution which exposes them to very extreme events in linear scale: something twice as strong is half as likely to happen. This is in direct contract to basic Central Limit Theorem approximations, which say something twice as strong is usually much much less likely to happen (it has exponential scale).
The four stars is for the readability as well as the theory. It is a very accessible book for non-mathematicians yet it wasn't too frustrating for me. That's because a) he has chapters that have some math terms to satiate me like sugar crystals, and b) the philosophy is still very interesting and scientific. His style is preachy and in spite of that you are not put off by his words. Part of the reason is that he is playing the negation: he is not claiming to predict an event's time, just its future existence. By laying off, he invites you to admit the possibility first and the eventuality later.
I docked him a star because when he started applying it to other events (eating schedules, etc.) it seemed more like him defining a philosophy by its ubiquity. That's not the case; a philosophy does not need to universally fit to teach a lesson and set a path that is better than the past. In this case, it is clear that for many real-life and asymmetric instances, using basic statistics is not going to cut it. We don't need to preach it onto other things like eating.
The book is still a fun read and in my opinion far better than Fooled by Randomness, which is just different. This is the book from Taleb that you want to read; it's the one that speaks to what you've inherently considered in the contradiction between models & performance.
The four stars is for the readability as well as the theory. It is a very accessible book for non-mathematicians yet it wasn't too frustrating for me. That's because a) he has chapters that have some math terms to satiate me like sugar crystals, and b) the philosophy is still very interesting and scientific. His style is preachy and in spite of that you are not put off by his words. Part of the reason is that he is playing the negation: he is not claiming to predict an event's time, just its future existence. By laying off, he invites you to admit the possibility first and the eventuality later.
I docked him a star because when he started applying it to other events (eating schedules, etc.) it seemed more like him defining a philosophy by its ubiquity. That's not the case; a philosophy does not need to universally fit to teach a lesson and set a path that is better than the past. In this case, it is clear that for many real-life and asymmetric instances, using basic statistics is not going to cut it. We don't need to preach it onto other things like eating.
The book is still a fun read and in my opinion far better than Fooled by Randomness, which is just different. This is the book from Taleb that you want to read; it's the one that speaks to what you've inherently considered in the contradiction between models & performance.