The Black Swan: The Impact of the Highly Improbable

I have a lot of sympathy both to the topic and to the author personally.

There are certain aspects of modern economics and finance in both academia and among practitioners that would drive crazy any person having deep and diverse knowledge of the field.

Unfortunately all true concepts in this books are also trivial and what's suggested as a cure is either also trivial or not applicable.

There are also some things that are factually wrong, including for example wealth distribution, which is not really "scalable" as author claims and in fact is very well taken care of in most recent finance research.

Still, I would recommend reading this book simply for a well-written prose, leaving all diatribes addressed to "professionals" aside. It is not productive and the author simply is not up to the level of best research currently done in economics and finance as well as best and smart techniques used by practitioners.

The Black Swan: The Impact of the Highly Improbable

A very enjoyable book to read. Very hard to put down.

Taleb's main point is that the bell curve doesn't apply to financial predictions. That the industry of risk managers assumes that it does, means that the perception of risk becomes self-referencing, and ignores the possibility of a black swan event. I give credit to Taleb for predicting the demise of Fannie Mae, and to some degree the black swan of the current economic meltdown.

Taleb reminds us all to look beyond the normal and suspend our assumptions and judgments because of the fresh eyes this can offer.

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As a practioner of structured creativity, The Black Swan tenets reinforce this thinking, which can be very powerful and liberating in business and in life. Taleb's main ideas are a beautiful outlier. For some more concrete strategic thinking on how to create or just get in the way of black and 'little grey' swans check Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant and The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials)

Unfortunately, Taleb's writing is also often an outlier. The structure of the book was lost on me. Some of Taleb's descriptions, when introducing a new topic, were efficient and entirely clear and concise. That is not the norm in this book. It was an intellectual challenge and a struggle to stay engaged. I wish, as other reviewers have suggested, that I had read Fooled by Ramdomness first, as it sounds like Taleb did the work needed to write a short book in that endeavor, and not a rambling, random work from mediocristan. (Taleb's word for the world of bell curve reliance.)

I imagine that Taleb is a tough man to direct, but an editor with a red pen would have been very useful to The Black Swan. The footnote predicting Fannie Mae's demise, refers to 'Fanny' Mae. Although we knew what he meant, the fact that this was mis-spelled is a symptom of what's wrong with this book; the editing, right in the middle of what was dead right; the prediction.

Read it, but feel free to skim.

This book brings attention to some of our biases and how it effects our decisions. For example given enough monkeys (trillions) on typewriters one would write the Iliad but don't except the next book to be the Odyssey. This applies to traders giving enough some will experience random success for several years until they blow up.

Bottom line don't take randomness for success.

I'm not sure if you need to read a whole book to get the point. Especially since it's hard to implement as a trading strategy. I forget the exact quote but the author says don't expect to read the art of war and become a great general don't read my book as a practical guide to trading.

What's to say that Talib's trading strategy is randomness and one day will blow up.

If you are able to put aside your conventional way of thinking you can understand Black Swans as presented by Taleb in this wonderful book.