hanienoor 's review for:

The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb

5.0

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Challenged my thoughts with a pinch of humour + realism.

Black Swan event;
• an outlier/rarity
• extreme impact
• retrospective

Black Swan logic: what you do not know is far more relevant than what you do know.

Key points from Black Swan:
• The normal bell-curve distribution predict approximation of results that does not necesserily accounts for Black Swan outliers —shift the distribution significantly. Contributed by pure chance and the tendency for obvious outliers which leads to significant impact due to specific circumstances.
* Gaussian bell curve —few data sets can be effectively analysed using the normal bell distribution in reality.
• Platonifying: The human mind tends to create an illusion of understanding things that are too complex for it to grasp, making chaotic events seem orderly and predictable in retrospect, and overvaluing neat classifications.
• Complex systems are viewed as random due to the lack of available or comprehensible information —predictability is relative to knowledge.
• Predictive models are distorted as a result of generating simplified narratives of the causes of Black Swans and demonstrating their probability after the fact prevents people from taking into account the many complex factors that actually caused the event caused the event, which then distorts predictive models.
• Bad predictions are mostly rooted in extrapolating from the past, which does not always take into account actual, current threats faced.
• Almost evryone of us, especially experts in rapidly changing fields, have tendency to be overconfident in their knowledge —additional information of a topic leads to blind confidence in uninformed determination and unwillingness to revise conclusions and predictions.

Strategy for withstanding Black Swan:
• Be true to ourselves especially on our ignorance/things we do not know
• consider decisions based on available information instead of long-term assumptions
• contemplate on possible risk and adopt methods to minimise risk

I have a lot of comments on it as well but honestly a good read