Learn more Download now Shop now Shop now Shop now Shop now Shop now Shop now Shop now Shop now Learn More Shop now Learn more Shop Fire Shop Kindle Learn More Learn more Shop now Learn more



TOP 100 REVIEWERon 14 April 2017
I will summarise the book in one paragraph and then give positive and negative comment and a more serious critique of his message.

Summary:

Forecasting is extremely difficult and usually little better than guessing. Most experts in social sciences, especially finance and economics, overrate themselves, proclaiming abilities they simply don't have (he uses the word "fraudster" many times). Risk analysis, and indeed all statistical work that relies on Gaussian assumptions, doesn't work because Gaussian assumptions don't hold in most real world situations, which are subject to "unknown unknowns". He cites the example of a casino which used mathematics to control its losses to gamblers but still lost a lot of money when an irreplaceable performer in their main show was maimed by a tiger, and when the owner's daughter was kidnapped. it nearly lost its licence when an irresponsible employee hid a bunch of tax returns instead of filing them. These, of course, are the black swans of the title.

The positive:

It is easy to read and entertaining, with an engaging human touch. Its insights are largely valid and important. It is a useful provocative challenge to conventional thinking and a slap in the face to self-important economists who take themselves too seriously.

The negative:

It is repetitive and could have been written in 50 pages. By the mid-point, the constant rubbishing of the entire scientific and mathematics community as fraudsters felt like a tiresome rant. Towards the end it felt like listening to the charismatic leader of a religious sect explaining that only he knew the truth and all those who didn't listen to him were damned. Indeed, the author is even more arrogant than those he attacks.

Critique:

The world of finance has known for a long time that its models don't allow for black swans. The question is whether to use existing models which work most of the time, or some alternative. Taleb isn't clear about what his alternative is though he quickly dismisses other peoples' attempts to allow for black swans in existing models. He says his method "develops intuitions from practice", relies on "skepticism", and "sophisticated craft", "seeks to be approximately right across a broad set of eventualities", "respects those who have the guts to say I don't know", and uses "messy mathematics and computational methods". None of this is specified, it is just motherhood and apple pie.

He gives a hint of what he means for investing. "I worry far more about the 'promising' stock market, particularly the 'safe' blue chip stocks, than I do about speculative ventures - the former represent invisible risks, the latter offer no surprises since you know how volatile they are and can limit your downside by investing smaller amounts."

It is worth taking a good look at this logic. He is saying he invests in risky assets but because they are risky, he doesn't put much money in them. Where does he put the rest of it then? Presumably in the safe blue chip stocks which he just said he doesn't like. Notice the comment "you know how volatile they are". He spends most of the book preaching that you never know how volatile things are. What he means here is that he knows they are very volatile. Reading carefully, his strategy amounts to this. The market generally undervalues some risks and overvalues others and, using his intuition, he does the opposite in order to benefit from other peoples' errors. This is a sound approach. It is also a common and well known one. The hard part is how to identify the errors. He thinks you can do it by allowing for black swans, since most trading models don't allow for them. But that means he is actually relying on all those existing models, albeit in a contrarian manner. If everybody stopped using them, his strategy would disappear. He has made the case that black swans are important and difficult to account for. It does not follow that the market would work better if existing methods were ditched.

Finally, his rude dismissal of all maths that uses Gaussian distributions is crass. For example he points out that words are distributed according to a power law, not Gaussian. That is true, and yet speech recognition, and all the language based artificial intelligence that is rapidly becoming powerful and useful, is based on mathematics that uses Gaussian distributions at its core.
44 Comments| 63 people found this helpful. Was this review helpful to you? Report abuse
on 4 September 2016
There's probably a point in here, and I learned a little about the levant, but too ranty and roundabout. Didn't motivate me to finish. Still don't know what it's saying apart from "big, unexpected things have big, unexpected consequences"
0Comment| 6 people found this helpful. Was this review helpful to you? Report abuse
on 28 February 2017
I am not qualified to comment on the maths and philosophical competence of the author. But he appears to know his stuff. I am reassured by the fact that he made money by trading using his abilities.

As such, it is a refreshing change from the superficial books expressing amazement by journalists or people who have never actually tested their theories in reality.

Assuming he is right, much of modern finance and indeed thinking about highly improbable (but not impossible) events is frighteningly wrong.

For anyone involved in business, investing (stocks, FX, bonds etc) -even if that is just your own pension -this is essential reading.

One of the most thought provoking books I've read for a long time.
0Comment| 3 people found this helpful. Was this review helpful to you? Report abuse
on 28 October 2013
I was introduced to this book by a mathematician who advises on risk and who said he had revamped his ideas on what risk means. The black swan itself is a great metaphor for the kind of disaster that sends us all sideways or puts us out of existence. In the west we all thought all swans were white until explorers found black ones in Australia. Nothing in our experience could have led us to guess that black ones existed too. And so we take the present for granted, like turkeys enjoying the good life and not expecting any kind of dramatic change as Thanksgiving Day arrives. Black Swans in human life - like the 2007 financial crisis or September 11 - are rare, have significant implications and, once seen, appear as inevitable, or almost inevitable, consequences of what went before. Taleb goes on to explain how we humans like to convince ourselves that we can predict risk and manage it. How else would financial advisers be able to sell so many investment plans that then disappoint? Without such faith we would no longer put any faith in those long-term government predictions which we read all the time? Despite all his scepticism, Taleb outlines ways to spot some kinds of risks and how to reduce your exposure. He is the man behind Donald Rumsfeld's 'unknown unknowns' (aka Black Swans). However, Taleb labours his points amid some very tedious stories - and it takes some patience to wade through them.
0Comment| 2 people found this helpful. Was this review helpful to you? Report abuse
on 19 November 2014
This is a highly rated book - some putting it in the top ten most influential of the last fifty years! The core concept that everything (our technology, our history, even the fact that life exists on earth) is shaped by 'Black Swan' (low incidence/high impact events) is surely true. This is the best bit of the book and has real impact. It fundamentally shifts the way we think about ourselves in the world - we are fortunate survivors, but then we construct a narrative that somehow it was inevitable that we came to be here today. And of course, all the stuff about financial markets being constructed on the pseudo science of risk modelling and predictability - until in the course of a single day several billion to one events happen. It's important to be familiar with these ideas. What Taleb does, not completely convincingly, is to then construct a fairly rambling book to extrapolate his deep insight into a theory of life and everything. But it doesn't quite work. Life's too short for books that don't quite work. There's plenty more waiting to be read. So I abandoned at half way.
0Comment| One person found this helpful. Was this review helpful to you? Report abuse
on 13 February 2014
So how do you define a book that is basically saying that everything you think about the potential for the pear shaped to happen to you at some point in the future is wrong?

Well lets start with the tone of the book.

It is agressively written, which is both entertaining and keeps your attention....the French seem to get a bit of a kicking now and then. It just sounds like the written frustratyion of someone who has is a Lighthouse keeper marking the Danger while the ships just keep sailing past onto the rocks.

It is clearly brilliantly researched and referenced and is obviously a complete labour of love, which make the reader want to love the ideas also.

There is no doubt that it is not a straight forward read there is an enormous amount packed into 350 odd pages but it is worth the time and effort to grasp the ideas that NNT is try to get across.

The biggest issue though is not the reading….or the eventual agreeing with what is written it is the putting into practical effect what is being suggested….it is the complete change in mind set to risk and predictability that is easy to read about and affirm but I suspect really much more difficult to put in place in your daily dealings.

However it is going to be fun trying…..i recommend you have a read and have a try also.

Perhaps the biggest thing about the book Black Swan is that perhaps it can be considered its own Black Swan…..is this book its own “highly improbable consequential event”?
0Comment|Was this review helpful to you? Report abuse
on 1 February 2016
Pretentious and dull
0Comment| 7 people found this helpful. Was this review helpful to you? Report abuse
on 17 April 2014
Sometimes it is claimed that those who write and profess about their successes, do so with the benefit of their supplementary publishing income. Often I perceive those kinds of comments are snide or unfair. But not in the case of Nassim Taleb, who has benefited from the class of reader who buys their books based upon recommendations made by the FT Weekend.

The book…well it makes one point, and then beats it to death, leaving the reader anxious to anticipate every future 'black swan' not appreciating that by calling it out is like observing the quantum wave function - i.e. it disperses. Or, if a tail event does come to pass, any failings which ought to aportion accountability are brushed off by those responsible, they cry 'oh, but it was a black swan event.'

A LITTLE information can be a very dangerous thing.
0Comment|Was this review helpful to you? Report abuse
on 23 November 2017
The book could be twice as clear and half as long without compromising accuracy.
The original thinking is important and enlightening but anyone capable of such gibberish does not deserve the attention this book demands.
You could easily find a great synthesis of this concepts on Kahneman's 'Thinking Fast and Slow' or Tahleb's 'Missbehaving' and miss nothing of importance.
0Comment| One person found this helpful. Was this review helpful to you? Report abuse
on 26 January 2018
I can see why the book made the author famous, his analysis is fantastic and the criticism in place. I gave 4 of 5 as I think that sometimes the author it to repetitive and that while he did give tips to detected blackswans... i thought he could have perhaps given further advise or be more elaborate.
0Comment|Was this review helpful to you? Report abuse

Sponsored Links

  (What is this?)