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haaris 's review for:
The Black Swan: The Impact of the Highly Improbable
by Nassim Nicholas Taleb
I was browsing in the local book store and my eyes caught NNT's The Black Swan. I reminisced briefly on my first read through the extraordinarily non-conformist treatise that the book is but I was halted by the sight of two words that instantly induced a state of excitement. "Second Edition." With a new post-script essay. Ten minutes later I had a copy of the book. This one meant for my small and healthy library in New York.
A caveat is in order. I am an economist or am on the route to be one. A person with even superficial familiarity with NNT should know the disgust he carries for my profession. Yet, the truth is I actually appreciate the heat. Of course, my association with NNT's work predates my decision to enter the economics-finance profession. 5 years ago, I liked him because he was a delightful balance of a practitioner and a connoisseur. Now I realize I like him, in addition, because he is an honest trenchant critic. The world needs people who are thoughtful iconoclasts.
To the book. (I may add on a review of the post-script essay but let that not be the main course for the day.) The book makes the forceful point that the world, at least in matters that increasingly concern human-kind, is not Gaussian. In other words, extreme events matter because they are possible compared to a world with exponential tails. What's the probability of that extreme event taking place? That's not the point. The point is that the consequences are real and possibly damaging enough -- in the case of a negative black swan -- for us to worry about them. Related to this is the problem of induction. The world cannot be understood by following the rules of induction because it takes one counter-example to throw everything out of the window. Taleb writes the book in his unique (compared to his contemporaries) autobiographical way, peppering the text with digressions that add value to the main text, and holding nothing back in his criticism of thinkers, old and new.
There are many little snippets and anecdotes Taleb makes that made this revisit worth it for me. 10 years on. Having read some mediocre books recently, The Black Swan made me feel alive again.
A caveat is in order. I am an economist or am on the route to be one. A person with even superficial familiarity with NNT should know the disgust he carries for my profession. Yet, the truth is I actually appreciate the heat. Of course, my association with NNT's work predates my decision to enter the economics-finance profession. 5 years ago, I liked him because he was a delightful balance of a practitioner and a connoisseur. Now I realize I like him, in addition, because he is an honest trenchant critic. The world needs people who are thoughtful iconoclasts.
To the book. (I may add on a review of the post-script essay but let that not be the main course for the day.) The book makes the forceful point that the world, at least in matters that increasingly concern human-kind, is not Gaussian. In other words, extreme events matter because they are possible compared to a world with exponential tails. What's the probability of that extreme event taking place? That's not the point. The point is that the consequences are real and possibly damaging enough -- in the case of a negative black swan -- for us to worry about them. Related to this is the problem of induction. The world cannot be understood by following the rules of induction because it takes one counter-example to throw everything out of the window. Taleb writes the book in his unique (compared to his contemporaries) autobiographical way, peppering the text with digressions that add value to the main text, and holding nothing back in his criticism of thinkers, old and new.
There are many little snippets and anecdotes Taleb makes that made this revisit worth it for me. 10 years on. Having read some mediocre books recently, The Black Swan made me feel alive again.