Random House The Black Swan: Second Edition: The Impact of the Highly Improbable: with a New Section: On Robustness and Fragility

Yet another great work from Taleb. He brings numerous pearls of wisdom throughout the book, which are reason enough to read it, even if he doesn’t add any theoretical knowledge to you repertoire: his discussion alone of the applicability of a number of theoretical concepts (mostly derived from Hume’s “Problem of Induction”) is worth the book. I would also highlight:- his explanations on the different estates of reality and how it’s difficult to assess luck (a more refined explanation of the main topic of “Fooled by Randomness”)- how nonlinear effects are prevalent in modern society.- How Gaussian statistics may be an elegant, but wrong, description of reality and how using it can be downright dangerous- Multitude of examples on how our behavioral biases reinforce those phenomena and lull us into a false sense of security and control.- Discussions on the “ludic fallacy”, the limited capability we have in forecasting and mistaking absence of evidence for evidence of absence.If you’re looking for the “best” blend between practical advice and philosophical inquiry in Taleb’s works, I would recommend this book. It’s clear that some of his opinions from his first book have evolved, either from experience or from reading more broadly. While I still vouch for Antifragile message as the more refined and broad view of Taleb’s interpretation of reality, this book is more focused on the implementation on financial markets. Nonetheless, I would argue that the reader would be better by reading every book in the Incerto series, since it provides numerous interpretations on the effects of nonlinearity.Also, read the footnotes and the notes at the end of the book: they contributed greatly to my understanding of certain topics. Additionally, they provide valuable sources for the many interesting topics the book deals with. My reading list certainly benefited from that.The hardcover edition from Random House is great, with thick paper, good spacing and large font, making the reading experience much easier.

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Ein grandioses Buch aus der Praxis heraus geschrieben und nicht nur mit Theorien vollgestopft die den Praxistest nicht bestehen. Ebenso kommt einem die Eine oder Andere Anekdote in diesem Buch aus dem eigenen Leben sehr bekannt vor, zumindest wenn man in der Finanzbranche tätig ist. Erzählungen von "ich hatte beinahe recht" über "in der Theorie hat es funktioniert" bis schlussendlich hin zu "das war nicht zu erwarten" oder "die Märkte reagieren über" sind alltägliche Phrasen in der Investmentbanking Branche. Jedoch sind sie letzten Endes nur Ausreden, für ein Verhalten der Menschen, dem sich Nassim Nicholas Taleb in diesem Buch widmet. Der Tenor lautet ...we can't predict and how can we avoid the emty suits.

Taleb's primary thesis is that our lives are governed by black swans, the highly improbable, the circumstances that cannot be foreseen. A turkey will live its life in eager anticipation of the farmer who feeds it. In no way can it anticipate the day the farmer will decide to serve it for Thanksgiving dinner. Most of the world did not expect 9/11 or the impact it would have on their lives. J.R. Rowling could not have predicted the phenomenal success of her Harry Potter series. Mr. Taleb differentiates between those parts of our lives that are governed by mediocristan and those by extremistan. Mediocristan are those parts of our existence that fit a bell curve like who well we do on a test or our size relative to others or the time it takes to run a quarter mile compared to others. Variations from one person to another are limited by intelligence and physicality. Our income relative to others is governed by the laws of extremistan. It is not limited by any practical element. Knowing the income of one person gives no clue as the relative income of another if we take the example of me and Bill Gates or the average income of any 10,000 people if Bill Gates is included in that number. Mr. Taleb definitely provides another perspective on the world. One that's definitely worth reading.

The author is very bright, erudite, original and incisive in his thinking and engaging, entertaining and caustic in his writing.He was born in Lebanon to a patrician family and grew in a highly cultured environment. His remarkable abilities were honed through attending the prestigious and highly competitive Wharton School of Management.His professional life is devoted to problems of luck, uncertainty, probability and knowledge. Part literary essayist, part empiricist, part no-nonsense trader, he is currently the Dean's Professor in the Sciences of Uncertainty at the University of Massachusetts at Amherst.The gist of the book comprise the ecologies of 'Mediocristan' and 'Extremistan' and vey particularly the latter.'Mediocristan' does not attract much the attention of the author because in this area the bell curve is admirably suited; this area includes for example biological variability such as the variation in the height and weight of people which fit excellently in the bell curve.The author reserves his wrath, scorn and irony when the bell curve is incorrectly used in 'Extremistan' that is in the area of SocioEconomics, inhabited occasionally by a Black Swan that is a highly improbable event with three principal characteristics:its unpredictability;its massive impact;and, after it has happened, our desire to make it appear less random and more predictable than it was.If there is a certainty in the author, this is his belief that it is impossible to have mathematically predictive models in Economics and it is in this sense that he characterizes the bell curve that great intellectual fraud. He has certainly a convincing point when he argues that if the world of finance were Gaussian (bell curved) then an episode such as the 1987 crash (more than twenty standard deviations)would take place once every several billion life times of the Universe.He is scornful of the Nobel prize laureates in Economics, developers of the Modern Portfolio Theory who subsequently founded the now defunct Long Term Capital Management.I found reading the book compelling and irresistible and despite its apparent informality, meticulously written complete with Glossary, Notes, impressively comprehensive Bibliography and Index.