I bought the book because it is on best selling list, 4 stars and an interesting topic. However, quite a disappoinment. The black swan idea is quite refreshing but it is revealed completed in the first 20 pages. The rest are just repeative garbage.

I guess the author needs to make a living too and he is obviously paid by the number of pages. He simply turned a good article into a over-weight book.

In 1997 my cousin worked on Wall Street and suggested to her colleagues that the office keep a rubber raft in the storage room in case the World Trade Center gets attacked again. She had to leave soon after that. They thought she was crazy. In fact, she was dead right. She had predicted what this book calls a "Black Swan"...something that most people cannot or will not predict.

One reason why I never bought real estate is because I have always been concerned about the effect of a nuclear bomb or nuclear reactor accident on said purchase. Most people would laugh at me for saying that. I hope that I am never correct, but I fear that somewhere, some day, real estate in a given area will approach zero value because of such a "black swan" event.

This is one of the best books you can read that describes how knowing what you don't know is more important than knowing what you know. It is interesting to know that the US Military takes this book and this author very seriously. Rumsfeld apparently quoted him several times when he was in office.

Nassim Taleb has written a very enthusiastic book, and provides some very tasteful food for thought. The problem is, Taleb himself is far too pleased with his own work.
Talebs confidence in his own ideas helps him write a book which is easy and fun to read. For an economist, interested in the philosophical background of the science, he offers plenty of very interesting references. I will most certainly dig more into the thoughts of Karl Popper and Benoit Mandelbrot.
But Taleb's confidence also helps him make several rather banal mistakes. His main adversary is the statistician Gauss and his normal distribution. Taleb is right that many economists and financial analysts rely far too much on normal distribution. But figure 7 on page 238 reveals that Taleb himself does not understand the concept pretty good: "..as your sample size increases, the observed average will present itself with less and less dispersion".
His confidence also makes Taleb jump to conclusions and make banal errors (the French Maginot Line, the main line of defence built in the 1930s, was not built where the Germans attacked France in World War One). Taleb even goes in his own primary trap: the confirmation bias. Every little thing happening by chance is counted as evidence of his Black Swan theory. But the story of penicillin is famous just because it was sensational, not because it is the normal way of making major medical breakthroughs.
It is probably not worthwhile to read this book, although there are grains of gold in it. The book is written in the spring of 2007, before subprime. In a footnote Taleb is writing about the risk of Fannie Mae: it "seems to be sitting on a barrel of dynamite." Touché!

Very nice book, explains how the tail (outliers) in a bell curve is so imporant. Must read for financial engineers.

I can't comment on the science behind this book. I will say that - at least from this layman's perspective - Taleb offers magnitudes of insight on the ideas of unpredictability and randomness, and does a bang-up job of upsetting the status quo.

The book is centered on the concept of a Black Swan - an event that lies outside the narrow periphery of our knowledge, has an extreme impact or causes a major upset (whether it be cultural, financial, political, et al.), and is characterized by a rampant slew of retrospectives - all the media, the so-called "experts", and the authorities suddenly have the details on why it happened.

For instance, we are told by historians of the outbreak of WW2: "tensions were mounting" throughout Europe, and that there were "escalating crises" abound, but according to bond prices (which offer a good understanding of history, says Taleb), there was no sign of this to speak of! "One would suppose that people living through the beginning of WW2 had an inkling that something momentous was taking place. Not at all."

The idea of retrospective distortion and over-interpretation fascinates me. How people attempt to fit messy empirical reality into neatly organized interpretations! The problem with our predictions, and our retrospectives, is that they are often framed from a naive perspective that we live in a place called Mediocristan, a place where randomness is mild, or Type 01, when we really live in a place called Extremistan - where reality is characterized by wild, unpredictable events that completely upset the averages of the bell curve.

...We come out the other side mistrusting the arrogance of almost all predictions! What does bird poop have to do with one of the most fundamental physical theories? Do we think that our wars are "under-control", or do we consider the unpredictability of conflict - that a small conflict might someday spiral unpredictably out of control and result in the decimation of the entire human race!?! How has the Nobel Prize been exploited to sell methods of market-interpretation that are completely unscientific, yet universally accepted and completely institutionalized? We are treated to an interesting investigation of this arrogance which dominates so many fields of study and indeed, we find that it is an arrogance deeply embedded in our minds!

Despite the seemingly bleak picture, The Black Swan is great fun to read and offers tips ("be as hyper-conservative and as hyper-aggressive as you can!") on how to cope and perhaps even thrive in this chaotic, simmering soup we call Civilization.

If you are like me, you will enjoy reading about things like the narrative fallacy, confirmation bias, the ludic fallacy, the problem of induction, et al. My only criticism of book is it's repetition, but honestly - I hardly noticed.

Wealth Odyssey: The Essential Road Map For Your Financial Journey Where Is It You Are Really Trying To Go With Money?

This work says more about the world of hedge funds and speculation than it does about the world most people live in. "Everything is possible, yet only one thing happens" is a quote from "Chances are ... Adventures in Probability" by Michael and Ellen Kaplan, a much easier to read work without laborious philosophy wrapped around otherwise good information. Yes, things happen. "Pop! Why Bubbles are Great for the Economy" by Daniel Gross, explains that unexpected things do indeed happen, which is often a good thing.

Nothing can be predetermined or forecast. There is more to life than worrying about black swans, which may never happen. The illusion is that even if one did know, how would knowing it make life any different after it happened? Yes, for those not living in Pompeii it mattered. Nevertheless, a super volcano for example (or any other cataclysmic event - geophysical or financial), a true black swan, would change life, as we know it, globally - unstated, but a result of his definition. To approach investing just in case a black swan comes along has more of an impact on the present results, for those holding such beliefs, since the odds of the black swan are small. Indeed, any traumatic black swan would affect everyone's results and all would be in the same boat. Otherwise, it wouldn't be a true black swan, simply a localized, unforeseen, occurrence for those holding such views.

Any book that attempts to explain a nebulous concept such as this is hard to write but the presentation of this book is very cumbersome.

The only parts I liked was Chapters 1-3 which has some interesting observations about rare events and how most humans are hardwired to miss the rare event and Chapters 15-17 are quite good: I think most readers will relish the discussion on bell curves and standard deviations.

Chapters 5-15 are completely unreadable in which the author "discusses" the works and hypothesis of unknown french-philosophers with weak connections to the book's subject.

This book doesn't offer a clue on predicting rare events and offers a lot of hindsight advice. Most readers will find Taleb's suggestions totally inapplicable to their work. The biggest shortcoming of this book is its treatment (lack of) conditional probability and its dismissal of intelligent action as merely "random" events.

Nassim Taleb's Black Swan makes for a fascinating read, despite (or perhaps because of) his heavily self-important style of writing. Taleb strikes at the core of the human tendency to prophesize, or more humbly, forecast all kinds of things. The reason why almost everyone gets it so wrong all the time, even while making predictions about seemingly mundane things (e.g., a project plan for building construction), is that they ignore the impact of "black swans", seemingly rare events. Taleb's contention is that while specific black swans are difficult to predict, the occurrence of some black swan or the other is very widespread in all walks of human life. In mathematical terms, Taleb contends that a lot of real life phenomena that are modeled using Normal or Gaussian distributions, are in fact governed by a Power Law distribution.

Taleb introduces the notions of Mediocristan and Extremistan, the former including all areas of measurement where the outlier event does not make much of a difference to the average (e.g., the average weight of any population sample will not be skewed by the fattest or the thinnest person), and the latter includes all areas where the outlier (or the black swan) typically dominates the sample (e.g., Bill Gates' wealth would dominate any sample of the wealth of1000s of people of which he was one). Taleb points out that Extremistan is more widespread and commonplace than we'd imagine, and that we commonly end up making the mistake of applying Mediocristan tendencies of averaging, linear extrapolation and Gaussian distributions to situations that belong to Extremistan.

Taleb argues that humans have a natural tendency to forecast, even though most previous forecasts have been proven wrong. In addition to ignoring the black swan, some of the reasons for incorrect forecasting include:
o Confusing cause and effect, or attaching unreasonable probabilities to events, due to "narrative fallacy": We have a tendency to believe statements of the form "U.S. Treasuries rise; Hussein Capture may not curb terrorism", which treats one event as a cause for the other. Similarly, people are likely to consider the scenario "A massive flood somewhere in America in which more than a thousand people die" as being less likely than the more narrative scenario "An earthquake in California, causing massive flooding, in which more than a thousand people die", even though the first scenario is more inclusive than the second.
o Ignoring "silent evidence" and drawing incorrect cause-effect relationships: Taleb quotes Cicero's story about Diagoras who, when shown the portraits of worshippers who prayed and then survived a shipwreck (the implicit suggestion being that the praying helped prevent their drowning), remarked "where are the portraits of those who prayed, and then drowned?". We often infer cause and effect relationships from incomplete data, because the only data we see has "the winner's bias". By ignoring silent evidence, we give an undue importance to the role of certain actions towards causing an outcome, instead of ascribing the outcome to luck or randomness.
o Confusing the uncertainty that averages out with the uncertainty in real life: We often confuse the unpredictable uncertainties we deal with (e.g., how long will the Iraq War last) to the more well-behaved uncertainties we find in the rolling of dice and casino games.

Even if we opened our eyes to these mistakes, Taleb argues that we can not predict most real life phenomena. Modeling real life events using the Gaussian distribution is incorrect, because the assumptions behind the Gaussian (that all changes happen in a series of small steps, and that the odds are balanced at each step) do not hold in real life.

So what's one to do in the face of these difficulties in forecasting? Taleb offers his prescriptions: First, do not try to predict a specific black swan, and instead just expect some black swan to happen; and second, take actions that expose yourself aggressively to black swans (i.e., expose yourself to wild upsides and downsides) but at the same time protect your downside using some form of insurance. For example if you are investor, invest 15% of your portfolio in wildly unpredictable assets, and invest the remaining in safe insured assets.

Overall, I found Taleb's book a great read for anyone who uses data in decision making. It exposes a lot of mistakes I have seen myself and people around me make. I would strongly recommend this book to anyone, and I feel that reading The Black Swan will help any reader improve their understanding (or at least expose our lack of understanding) of the workings of the world around us.

As others have observed, there are a couple of good ideas in this book. The style, however, makes it practically unreadable. I actually listened to the audiobook; one of the editorial reviews comments that the reader salvaged the work somewhat by softening the sarcastic and annoying tone; I did not find that to be the case. It's hard to blame the narrator, as he seems to have captured more-or-less the author's intent.

The "couple of good ideas" are fairly straightforward. One, don't assume that you know the form of the probability distribution of any given social or economic phenomenon. That's good advice. It's often easy to find a function and a set of parameters that appear to fit a given historical data set; but just because the function appears to fit historically doesn't mean it's going to be predictive. Two, if the form of the distribution is unknown and unknowable, then computed measures of "risk" are not reliable, as risk is in fact incalculable. So, a good investing strategy is to avoid assets whose valuation depends on risk estimates, and seek out certain other assets. Following that strategy would have kept you out of a lot of the asset classes that have melted down recently.

The most frustrating problem with the way the book is written is its lack of self-consistency. For example, there is a long discussion of "silent evidence": just because you don't observe something doesn't mean it's not there. Then, over and over again, Taleb tries to assert that no one in business, or the social sciences, or this or that domain understands a certain issue correctly. Even if we assume for a moment that Taleb's understanding of the point in question is correct, and that he is therefore qualified to pass judgement on who is a Right-Thinking Individual, the fact that he has not encountered any Right-Thinking Individuals does not mean they don't exist. He may not have met them; or he may have met them and not been listening when they spoke; or he may have met them and presented his ideas in such a contemptuous way they chose not to engage in conversation, concluding there would be no value to themselves in it.

Then there is the rant against the bell curve that occupies the last chapters of the book. Kind of silly to get angry at a mathematical function. It's like criticizing a hammer for not being a screwdriver. In a few places the author does draw the distinction between appropriate uses of the bell curve and inappropriate uses, which is of course the (perfectly reasonable) point he is trying to make. Most of this section, however, is written in a much more sloppy and imprecise way, so that any sentence or paragraph by itself comes across as criticizing the hammer. To make sense of it one has to keep saying to oneself "well what he really means is that there are certain people who misuse this tool, and they shouldn't."

Similarly, the assault on academic economics and the Nobel Prize. Not many people would argue that idealized models are predictive of reality. That's not the same as saying they are without value; it just means one has to know what to use them for. The author does find value in behavioral economics, but somehow when attacking academia seems to forget that a) behavioral economics is all the rage today in academic circles, and b) the Nobel committee, who Taleb considers so clueless, awarded Kahneman the economics prize for inventing it. [Another self-consistency issue here: after a very lengthy discursion on the value of empiricism and the fallacy of oversimplified models, Taleb confidently repeats numerous experimental-psychology and behavioral-economics results as "the way we behave," where by "we" he means all of humanity, excluding perhaps himself the Enlightened One. In fact, most of these results are based on very small samples, so while they are indeed interesting, the authors generally go to great lengths to explain that what they have observed COULD have a certain meaning or cause, but that the data are not conclusive, as other causes could have led to the same observations.]

Great books are like great friends. Even when they challenge your ideas, you want to enage with them because it's such a pleasure. This is not such a book. The ideas, while interesting, are not as controversial as the author claims, and they aren't worth the pain of struggling through the writing.

I listened to the audiobook. I think the idea behind this book is very, very interesting - life is shaped more by random (non-predictable) events than by anything one of us can foresee. That being said, the author has filled the book with several anecdotes that are somewhat meaningless (eg, the fictitious Russian author) and/or irrelevant (autobiographical details of his life) - hence the 4 stars, rather than the 5 stars the idea deserves. It appears that at times, he is trying to be too clever by half, and destroys the rhythm of ideas by being too verbose. Some of his sentences are very convoluted, and I found myself having to rewind and listen to some sentences more than once to figure out what he means by what he says. I found the parallels with Asimov's futuristic science fiction Foundation series- where Harry Seldon constructs his of mathematically predicting the future, but is thrown off by the unpredictable appearance of the Mule (=a black swan). It is odd, especially in the context of this book, that over so many millennia that the Foundation existed, why only one such even that was so enormously disruptive occurred. According to Taleb, they should be occurring much more commonly. Had this book been written better, I would have given it 5 stars.

Nicholas Taleb has seemingly spent his entire life chasing what he refers to as the black swan. A series of highly improbable events that have continuously shaped the course of human history. He presents his description of this phenomenon in what might be termed an autobiographical manifesto of sorts, the exhaustive and seemingly endlessly referenced book, "The Black Swan -- The Impact of the Highly Improbable". It's not that Taleb isn't onto something, or hasn't written a thought provoking book, he has. But Taleb has not given us a black swan. He has given us a Red Herring. He has taken a small piece of stinky fish and dragged it in the dirt perpendicular to the path we are on. There is a small benefit, if we leave our path momentarily to gain a new perspective, new insights will emerge, but that is all our feeble brains can comprehend, and nothing more. But to believe there are no thinker's among us who do not understand the need to search for the extraordinary and to try to link them to potential causes, that although we might not understand completely, are contributory and can indeed be rectified, is not to be an observer of the human race at all. Ultimately he is wrong about the Black Swan but he is right about the requirement for us to think outside the box. But this has been said before. Taleb just reminds us.

The research based information on the psychology of marketing, buying and selling that are described in the first two chapters are little known, facinating and extremely useful for those at many levels. Detailed discussions of "decoys" in marketing products, the relative comparisons involved in almost all buying decisions and the incredible effects of "free" merchandise such as Amazon's free shipping are given in an interesting and engaging way. After that the impact and interest of the information declines with each chapter and by chapter 7 it is hard to tell what the focus of the book (audio) is. A guess would be that after chapter three it just goes on to whatever the author found interesting and researched.

The author, I think, is one of the great thinkers of our time. I enjoyed his work. On YouTube, there is a long interview of Mr. Taleb by an old guy. It was a disaster in that the interviewer has almost no knowledge about what what Taleb was talking about (including chaos, ...) and consistently interrupts and makes annoying noises. Therefore, I could only partially tell what Taleb was trying to say and I knew it was something important. Being unable to completely hear and see what Taleb attempted to say, I bought his book. Anyhow, it is not a technical book, it's fun with lots of history knowledge and intriging to read. I recommended it to many friends already.

Taleb could use a good editor, no doubt about it. Taleb's writing can be very entertaining and informative when he does not distract and annoy the reader with childish throwaway asides. On the other hand, these asides act as road-signs: When you find one aside too many, just skip the rest of the chapter because it is of no major consequence. When Taleb takes to his subject, he writes like an adult. :)

The subject matter, which could have been covered in fewer pages, is about the fact that the normal or bell curve does not represent reality in many cases and in these instances predictions based on a normal distribution will be wildly wrong. I found particularly helpful some pointers about our understanding of issues like "evidence" which may or may not prove your assumptions and "randomness" (not what you learn in a casino) which may be Gaussian or not.

The rest of the book is dedicated to various subjects such as the history of the Levant, not to be confused with the Middle East; a diatribe against the Nobel prize for economics; the academic pecking order; Taleb's travelogue including Rome, Paris, Sidney, Boston; and praises for philosophers and mathematicians Taleb happens to like including Mandelbrot and Poincare.

The reason for reading this book, if you are an investor, is to make sure you adapt your portfolio to the reality of Black Swans and avoid wrong assumptions and bad theories such as MPT, Black-Scholes, and Efficient Markets. If you are not highly leveraged then Black Swans will be less traumatic for your portfolio. Maybe Taleb should have railed against excessive leverage.

While Taleb does mention his dumbbell style of investing, don't expect to find an investing tutorial. He provides some clues but you will have to create your own unique style of harnessing good Black Swans and avoiding the bad ones.

Nutshell review - Although written in a slightly arrogant style the concepts, insights, and ideas expressed clearly show a highly intelligent and very well read author. Thoroughly interesting, thought provoking and well written book. Very worth reading.

Actually I love this book and can't get enough Taleb, mostly additionally, in the form of podcasts. I just couldn't help but posting a comment on the quality of the paper and the binding. Especially a book like this which is full of fascinating facts and figures you're going to want to put your finger on later, you might be inclined to highlight, right? The ink bleeds right through the paper to the other side. How frustrating. I buy hardbacks knowing that the paperback paper is too thin to highlight. Is this how it's going to be now? There are other indications of cost cutting. The binding ripping after one reading. Inside cover full of bubbles where the glue didn't quite catch. Especially with a Black Swan of a blockbuster hit, couldn't you spend the extra couple of cents to make a quality product?

If you ever questioned what your history teacher told you, you will find this book very interesting. If you ever hated grading on the curve, you will find out your were not alone. If you ever built a portfolio and it was perfect, and later you had asked yourself what in the world were you doing, you will find an answer in this book.
If you ever had to decompose a forecast at your work to get some alpha, beta, gamma, delta, or whatever Greek letter you like, you will find this book entertaining.
And if you did not do any of the above, just enjoy a good language.
P.S. I gave this book as a Christmas present to someone.

I read several chapters and had to stop because I felt I was losing my time in hopes that something interesting would pop up in the next paragraph. But it didn't.

There is nothing really original about the "black swan" idea. Not all events fit a bell curve, ok. Taleb claims that there are more black swan events than we think, that they shape the world, but we underestimate their impact etc. All of these are petitions of the principle. There seems to be no sound reasoning in the book.

Taleb is rightly critical of people who make induction from a few examples. But he makes inductions from a single instance, instead. In the discussion on "scalable" vs "non-scalable" work, he proves to have limited knowledge in economics. Maybe this is too severe : Keynes and Knight are briefly cited, and Hayek is discussed. Well, I will stop here.

I have fallen in love with stats stuff lately, and was hoping for another great read, but this one good not great. There is too much info that is not really related to much else and the pace is not good, I think the editor did a disservice and it could have been a better book. The author has great ideas and it got me thinking though and that is what books are for,

Some thought-provoking ideas wrapped in an insufferably arrogant tone. Fortunately, there are plenty of other options for books that cover these topics. It just isn't worth wading through Taleb's straw man arguments and narcissistic preening. As alternatives, I'd suggest Mlodinow's "The Drunkard's Walk" or even Taleb's earlier "Fooled by Randomness."

A little long -- there's really a single concept here and while it's important to relate to various endeavors, we get the point. But it's always erudite and entertaining along the way. And the main point is pretty important.

Kudos to the folks who rated this literary garbage "one star". Taleb is an arrogant, intellectual bully who contradicts himself several times in an disconnected diatribe that could've been shortened by at least 300 pages. Talk about needing an editor. Read this book at your own peril...but don't say you haven't been warned.

I thought this book was a really interesting read, but it wasn't one where you can easily see how to apply what you read.

For instance, the author does a great job of demonstrating how random life can be...for example, the stories about the true risks of a Las Vegas casino and the work habits of Onassis were really entertaining and made the point about black swans...but knowing that life is random doesn't really lend itself to knowing how to live in a random world.

The book can get a bit long-winded at times, but it's still well worth reading, especially if you're looking for something to expand your mind vs looking to make specific life changes.

The book reads like a web blog. he is a much more entertaining fellow on TV.

Taleb is an almost unbearalbe mix of arrogant and lazy. His ideas could be boiled down to about 10 pages, but he insists on rambling anecdotes to make his point. For someone claiming to rise above the rest of humanity with his visionary approach to history, his use of anecdotes as evidence is comical. Less comical but more serious is his wholesale invention of fictional anecdotes to support his theories. I want a refund.

There are some good points and some good perspectives in this book. None-the-less it is so filled with bile, acrimony and failed research that I came out stupider for having read it. The author makes up dozens of terms for things that already exist (e.g. "Silent Evidence" for what is commonly referred to as "Survivorship Bias"), rambles on for pages with personal diatribes and interjects fictional narratives as a truthful support for his points (one of which is that narratives are misleading).
There are better places to get the same information. Books that are better researched, better written and less smug. Read those instead.

This book was a profound, unique experience, from the first word to the very last word. B R A V O !

When I finished, I just wanted to start reading it over again. But instead I started Dr. Taleb's "Fooled by Randomness."

It was a Black Swan that told me about this book. I will never be the same. This book has changed me.

--Leah

A wonderful book on how the beloved normal distribution fails us when we use it to explain everything. It is well crafted, at times silly, at times playful, but always thought provoking. The writing is what you would expect if you had a favorite statistical philosopher over for a dinner and a few drinks: sometimes the ideas are overstated and enthusiastic, but that does not diminish the quality of the thought. This book talks about things we do not want to think about, and in the process encourages us to think about our own thinking as well as to question our assumptions about what "improbable" actually means.

not enough new stuff. recent research ignored. arrogant and condescending stick is getting old.

Taleb claims the book 'practically wrote itself;' what he really means, is that he just lifted some ideas from old philosophers and let Word do the rest.

The Black Swan provides an interested reader with important insights, no doubt, but they are nothing new. Indeed, possibly the most frustrating aspect of this book is how vainglorious its author is. He claims he felt 'vindicated' on Black Monday ... How? All Taleb has done is taken others ideas and repackaged them. While he was correct to believe them in the first place, there is little of the author in the book. Worse still, the author disregards his own rules. Early in the book Taleb claims that with respect to foreign affairs, the best answer is, "I don't know," (because there are so many unknowns it's best not to assume them away). A little while later, however, he goes on a tirade against the use of the phfrase "Hardened by the Gulag." Taleb claims that the Gulag did not harden the mobbsters, instead it simply selected teh most physically fit (because all others would die), who were also the most aggresive to begin with. Notwithstanding this latter assumption, he also implicitly assumes no psychological component was present; a clear violation of his 'don't assume' policy. While this is relatively minor (although extremely aggrivating given Taleb's hubris and constant patronization) it is a clear example of Taleb's consistent lack of vision. Moreover, he constantly uses inappropriate and verbose language (indeed, it seems the Taleb wasn't honest at the beginning, and instead it was the book, PLUS Word's thesaurus who wrote The Black Swan).

Readers, I implore you, save yourself some money: get some Russel, Hume, and Bacon out from your local library and bookmark an online thesaurus. Whenever you think you may want to read The Black Swan, just take any sentence from the above philosophers, pick AT LEAST TWO words and use the thesaurus to find their synonyms and from those, pick the largest everytime and replace the origional word. Now you will be, for all intents and purposes, reading the Black Swan.

So, you wondered why the "guru" wasn't all that good. Taleb explains - in clear and entertaing terms - why you should "make up your own" mind. I look at things "differently" now - I tend to be skeptical anyway - but I feel better about my decisions. I am encouraging others to get the book or at least make an effort to find out about "the other sides of statistics!" And the concept of a "Black Swan" is fantastic !!
A good read !! Marty Dowling

Ha! My clever title has nothing to do with my review (or does it?). Anyway, I found this book quite challenging. As I've said in other reviews, I am quite the layman when it comes to statistics and probability. But I think I got the gist of Taleb's concepts: we rely on flawed notions to make decisions or to view the world: the ludic fallacy; the narrative fallacy; the confirmation bias, etc. Foolish men (I don't think there is even one instance of a woman being mentioned, as either one who gets Taleb's thinking or doesn't) in expensive suits push on us a Bell curve from the world of Mediocristan, giving a false sense of security (and depriving us of potential big wins) in a brave new world where Black Swans - those improbable incidents for which we are impecabbly unprepared - have hugely significant impacts on our lives.

Taleb's is a mind deeply immersed in many disciplines. For those of us who spent our time in college waiting for Thursday to start partying, the subjects can be a bit challenging: philosophy, economics, financial analysis. But if you want to stretch your mind, take the challenge. There are profound and significant insights and learnings. Can I describe them to you succinctly? No. It will probably take me a few re-reads to fully grasp it all. Nevertheless, it's worth the plunge. In any event, I will forever be skeptical about any information backed up by statistical analysis.

For all the interesting stories, Black Swans has essentially the same message as Taleb's earlier book "Fooled By Randomness"; market prices do not follow a bell curve, and instead have a lot more unexpected extreme events. That said, most investment-related books tend not to linger on this issue, so Taleb is providing a reminder of something critical in markets. His style does come across arrogant, and judging by the bibliography (as well as the main text), he does want to show the world he is widely read. The stories are fun, but at times they are tangential to his thesis. The problem with reading his book is that it leaves one thinking that all investment returns come from chance. I find Mandelbrot's ideas of "gray swans" more appealing in that respect as it hints at the possibility of some skill. Taleb says he is a fan of Mandelbrot, so it would have been nice for him to explore this idea more. The book may not be the most inspiring for those involved in markets (we're all rolling dice), but a much needed reminder of the role of chance.

This is an excellent analysis of the limitations and flaws in
our thought processes about reconstruction of the past and predictions of the future.Once you see them with the help of Taleb,you're better
prepared to understand the world of events that occur around us.
He even has suggestions as to how to reduce those limitations.
Not always an easy read but fascinating.....

This is Taleb's follow up to "Fooled by Randomness." I found the lessons of both books to be important and instructive for both investing and, more generally, for life. Just like a Black Jack player who overvalues results ("lucky" or "unlucky streaks") and not the quality of play, Taleb teaches the philosophy of focusing on making the right probability-adjusted decision. Moreover, he teaches to evaluate decisions (your own or those of others) based on the info at hand at the time of the decision. It is easy to judge a decision based solely on results, but that is misleading as it does not account for the potential events that could have occurred but did not.

I found Taleb's philosophy compelling. Also, his direct, no-holds-barred conversational style is easy to read. He does ramble in places as he hammers certain points home. This is not necessarily elegant prose. However, the points are important and overall this is entertaining and instructive reading.

Taleb's main point here is that we should be extremely cautious about making predictions in nonlinear systems, as well as believing such predictions when we hear them. Unfortunately, most of the systems where we really want to know what will happen in the future are nonlinear systems--including all of human society, and the economy in particular. Taleb does a great job punching holes in the pretentiousness of "experts."

Although Taleb doesn't mention this, I would like to point out that the most accurate method known for predicting the performance of the economy is to say that tomorrow will be like today, next month will be like this month, and next year will be like this year. Of course this method of "prediction" is absolutely useless when something unexpected happens. And as Taleb's book points out, something unexpected always happens.

I'm giving this book five stars to apply what I learned about the dangers of staying in the middle. I think this book was written with the financial investment community in mind - and I learned some important lessons about mitigating investment risks - but that's not why I started reading it. I started reading it because I fully connected with the prologue - especially with NNT's commentary about how those who successfully avoid "Black Swans" are never rewarded for their success. We tend to glorify those who come to the rescue only after something catastrophic occurs, whereas there is no way to reward the real heroes - those who avoid the catastrophe, because we have no way to identify who they are. In fact, we tend to scorn them for making us do uncomfortable things that save lives by avoiding Black Swans. NNT's compelling argument made about a gutsy politician who may have taken a pro-active stand against the 9/11 attacks is what hooked me (on page xix). But unfortunately there was no further discussion on this, which I believe would be an interesting topic for any engineer, sociologist, or philosopher to continue with.

Other than that one disappointment, I am happy to have finished the book. I now see the bell curve and standard deviations differently and something potentially dangerous, whereas before I had not given it any thought. The parts written about good, desirable Black Swans are right-on and a fine argument against complacency. It puts you in control of your destiny rather than being made the victim while watching others around you steal the glory. NNT hits a home run in the final chapter by wrapping-up some of the details I had problems with earlier, which for me made the tough read worth while. Yes, we are all Black Swans.

This popularizer is a polemic on the platonicity of mathematical models, more specifically about their failures on taking into account of black swans. Black swans are the remnants consequential of the greedy reductionists' over simplifications of the reality. Black swans in summary have the following features: (1) rarity, (2) extreme impact, and (3) retrospective predictability. In the book the author has presented a plurality of ideas under the umbrella idea of black swans, together with a plethora of examples in various contexts. The arguments are terse, witty, pungent, occasionally offensive (to parties of vested interests and to other readers I suppose), fun and like the author's previous book "Fooled by randomness", worthy of re-reading. The author has done an excellent job in dumbing down technicalities for general audiences.

The book presents one novel demarcation (as stressed by the Popperian author, the demarcation is only an approximation for convenience) of randomness: (1) Mediocristan, and (2) Extremistan. Examples of Mediocristans are human's physical heights, actual weight of a minted coin, coin flipping, casino games, etc. Mediocristans are well taken care of by the traditional mathematical models and well established concepts relevant to the understanding of the traditional view of randomness, such as Gaussian distribution, standard deviation, statistical significance, etc. Extremistans, such as wealth, various phenomenon and statistics in wars (e.g. number of deaths), market behaviors, etc, are typically man-made or things that humans don't know much about. The author argues that as the world has become more complicated, it is moving deeper into Extremistans, and is less and less governed by Mediocristans. This change, along with people's ignorance of black swans, results in various phenomenon with significant impact such the surge of inequality (e.g. of wealth), the market crash of 1987 (in which the author has made a fortune), the S&L meltdown in the early 90s, LTCM's failure, or aberrant activities such as Gaussian delusions and applying flawed mathematical models to not so appropriate circumstances.

The nature of black swans can be vividly exemplified by the turkey problem coined by the author, a.k.a. the problem of induction. A well-fed Turkey could not know what would be happening to him on the Thanksgiving Day by inducing from how well he was treated in the days before. Like how the contemporaries of World War II couldn't realize the advent of event until after the facts. The problem of induction is an ancient philosophical problem first formalized in the modern epistemological context by Hume. Induction might be indispensible in the context of Mediocristans. However, it may fail miserably with Extremistans in the face of the "unknown unknowns", lest the probability of rare events is allegedly not computable. Experts who create mathematical models to capture black swans are said to be committing the Ludic Fallacy: believing that the structured randomness found in games resembles the unstructured randomness found in life.

The author uses black swans to explain the failure of the Efficient Market Hypothesis, the Modern Portfolio Theory, the misuse of science in the context of Sociology, Political Science, etc., the "theorizing disease" (relying much on incorrectly formulated knowledge as a therapy or consolation to ignorance and the stigmatic status quo of being not having control), the problems of heeding much to or totally relying on expert advices (e.g. a medical doctor might confuse NED (No Evidence of Disease) with END (Evidence of No Disease)), etc. The later part of the book discusses topics from basic binomial distribution to Mandelbrot randomness.

This book comes without much analytic data to sustain the author's hypothesis. Despite this, unlike many your-mom-is-a-female commercial books full of repetitive clichés found in the market, 'The Black Swan' is a well condensed tour-de-force and a convincing thesis that needs much attention. The author preaches against (1) naive empiricism (e.g. the meltdown of the Mortgage Backed Security market is a 'one in XXX billions' phenomenon), and (2) extreme skepticism (e.g. one believing in something with all the evidences pointing against it), and advocates beliefs in true and practical empiricism. In the author's word, he preaches practicality and does not want to be "a sucker in things that matter". He advises everyone to make decisions without being the turkey. The truth lies in realizing our limits and the understanding of the asymmetry of knowledge. The Popperian negative empiricism, a.k.a the certainty of falsification ("you know what is wrong with a lot more confidence than what you know is right") is the way to go. To be realistic, one needs to search for weakness in what he/she believes.

To those who are tolerant of the occasional bragging and nagging by the authors (some are indeed funny), this will be one interesting and memorable read.

One of the best books I have ever read. Should be required reading. Have given away at least 20 copies to friends.

The book starts well with challenging the readers to be skeptics about most everything. One should try to turn the pyramid upside down - the anti library, etc.
The author does correctly point out that power laws dominate several aspects of our life where we assume things to be normally distributed - stock market, etc.
It is also somewhat correct that we try to find causalities where we are not capable and thus draw incorrect reasonings.
But in reality the book should be no more than 25% of its original size. The basic idea is that predictions are not always correct. Labor makes little difference while luck is the real reason behind major successes - inventions, discoveries, serendipity.

Other than that, the author comes across as a real jerk - pompous, arrogant and foolish at times. His analogies do not hold correctly. One should not read newspapers because a newspapers are full of crap. Then he talks about rats under radiation and prisoners in Siberia and how they are similar. Rats are tortured physically and are thus weaker, prisoners are mentally traumatized and thus can get more dangerous. This is a well known established fact.

According to the author, we should be prepared for all the unknown - i.e. infinite number of situations and not for the known situations. He also warns how theories laden with stories and unnecessary scientific evidence and this is exactly what the author is doing though out the book. There are unrelated anecdotes like random thoughts through out the book.
It seems that he and a limited close circle are the smartest people who have ever walked the earth, while the rest have no idea what is going on.
Also information seems to have little or no value. Clearly he knows nothing about 'Kelly's Criteria'
The author continually criticizes 'quants' financial engineers since are supposedly so full of it. And what was he on the wall street?
I can go on about inconsistencies in the book. Please spare yourselves and if you really want, read one of the two books

Fooled by Randomness
Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street

I recently purchased this book off of Amazon. I am a long-time customer who has purchased many items, but I have never before been so wonderfully surprised about an item I purchased from the site. When the book arrived, I opened the packaging and saw the cover of "The Black Swan". I was keen to begin reading it so I started thumbing through the book. Something seemed amiss so I closed the book and took off the book cover to check the hardback binding. It too read "The Black Swan". So I continued to thumb through the pages. To my amazement, inside the book were the pages of "THE AGE OF AMERICAN UNREASON" by Susan Jacoby!!

I have yet to begin reading either book (I ordered another "The Black Swan" which did arrive in proper condition) but imagine the linkage between the randomness proposition of "The Black Swan" and society's devaluation of knowledge and rationalization precept of "The Age of American Unreason" will be intriguing. Do we seek to rationalize otherwise random events because we no longer value knowledge in our society, or does our arrogance preclude us from prioritizing the accumulation of knowledge, thus leading to poor rationalization of events we experience? Hopefully I will get through both books soon to find out.

Nevertheless, the order was most fulfilling to me because now I have the definitive proof that you can't judge a book by its cover :)

Very interesting subject and worth reading, although the not especially well written and the author gets arrogant and annoying at times.

"The Black Swan" The Impact of the Highly Improbable" by Nassim Nicholas Taleb is a development from and a more complete exploration of the concepts presented in his first book " Fooled By Randomness." The Black Swan is more of a sequel that is somewhat detailed and deeply philosophical.

What is compelling and exciting is the theme of random chance that is highlighted throughout the Black Swan. Taleb recapitulates David Hume by demonstrating that "the observation of even a million white swans does not justify the statement that all swans are white."

Ultimately Taleb presents a fascinating blend of social science and philosophy and central to his argument is that the world is not governed by the predictable but rather by the random, unkowable and unpredictable. Taleb asserts that change comes in unpredictable spurts.

Even better when read together with "Nexus" a New Age novel about life transformation, with the pivotal transformative event being a random unexpected meeting with a significant person from the main character's past, and so the journey begins as the fascinating impact of the highly improbable surfaces.

Nexus: A Neo Novel

I became interested in this book after reading a review in the Wall Street Journal. Unfortunately, I had a very difficult time slogging through to the end. NNT should have stuck to his "day job" as a trader or hired a ghost writer, since he seems to have great difficulty in stringing together a coherent set of thoughts in prose. As one reviewer has noted, a 10-page article written by an accomplished journalist would probably have sufficed to communicate the key themes of the book. HOWEVER - I give the book 3 stars because of the subject material, which I deem to be thought provoking and worthy of further study. Key points made in the book:
- Certain natural processes, such as the height to which we humans grow, are very well predicted by the normal, or Gaussian, distribution, in which the probability of extreme values is exceedingly low.
- As a consequence, and due to certain failings of human instinct, we attempt to apply the Gaussian distribution to all manner of domains to which it should not be applied, such as world affairs, finance, and investing.
- The result is a gross and dangerous underestimate of the risks from extreme events, the "unknown unknowns," the "Black Swans."
- What does that mean practically? For one thing, for the individual investor it means that all those handy financial and retirement calculators that estimate your future investment results based on the average annual returns and standard deviations of various asset classes over the last 60 or so years are giving you a false sense of security. In NNT's view, there is a very real possibility of a Black Swan event that swoops in and blows up your hard-earned portfolio. Or in less dramatic terms, it means you may be eating dog food at age 70.
NNT pretty much leaves the reader to draw his or her own conclusions about the meaning of the Black Swan in their own affairs. There is not much investing advice in the book - NNT made his money betting on Grey Swans - highly unlikely but predictable events - not Black Swans. How do you place a bet on an event that cannot be foreseen? The salvation of reading this book to the end was precisely that it made me think hard about what the Black Swan means to me as an individual investor. My conclusion was that rather than modifying anything I am already doing, I needed to adopt a certain mindset. I need to be mentally prepared for the fact that there is a very real possibility that some Black Swan event could occur in my lifetime that completely wipes out the portfolio I spent the last 27 years amassing. If that happens, I don't want to find myself on a window ledge like many did in 1929. With that in mind, I resolve to do the following:
- Diversify my portfolio (done)
- Own my home outright (10 years to go on a 15 year mortgage)
- Eschew debt (always have)
- Live below my means and keep saving something (check)
- Stay healthy (trying my best)
- If the dreaded Black Swan does happen, be mentally prepared, accept my fate, and move on.

Not wanting to review an otherwise complex subject to which I could not do justice, while I found the tone and style a bit arrogant, after reading the book I couldn't help but laugh listening to the after the fact explanations by the so called experts of the mortgage crisis and the unpredictability, in advance, but "explainability" in retrospect of the same "experts". Taleb predicted there would be a Black Swan, and it was there. I thank him for freeing me from reading daily newspapers and watching the news on TV.

As good as Fooled by Randomness. I highly recomend this book, it is thought provoking and intelligently written. I makes you look at the world from a different perspective.

I thought I might learn something from this book so finished it in two days including the afternoon of purchasing it. It had a sharp pleasant start, then in the middle it became depressing and towards the end, there was light at the end of the tunnel - phew.

I did not feel that this book had anything earth shatteringly new, although Taleb emphasises his unique, totally unique grasp of the problem as if no one else had seen it before. Of course he does give a few quotes from the Bible, but then he criticizes so much. I can forgive him all his foibles and criticisms bar one. He shot the messenger at the start by saying that the Black Swan is an ugly bird. Why shoot the bird? The bird is an extrodinary, ornithological enigma and indeed as something of a naturalist, the title persuaded me. Taleb does not seem to have a high regard for the natural world and says we should not be too guilty about species extinctions ... Something else that irritated me was when Taleb describes an issue and then says "more on this is chapter X ahead". I could not always say that I held my breath with this prequel. I prefer to eat my food without having to revisit it again and again.

I learned about mediocristan and extrismistan and how bell curves don't help you make accurate financial forecasts. I learned about the "narrative fallacy" and just how bad our assumptions are about how much we know. I learned about bad Nobel prizes in economics and the importance of Mandelbrot and certain apparently vital French thinkers and philosophers including that science guru Popper. Finally, I also learned about Lebanon turning from hell to heaven and the tragedy of this all. This is my first book by a recent middle eastern intellectual - I don't normally read books from people in this part of the world if only because they have not written on anything that particularly interests me (leaving aside ancient history).

Taleb is a sycophant when it comes to the USA. I grant him that the USA is a marvelous country, but how about some objectivity about the debt crises that the USA faces and - if he must give us his opinions free of charge, some frank views about politics and religion rather than various intellectual asides?

It's clear that he presents himself and his credentials as a scientist, scholar, polyglot and humanist rather than a businessman and stock market professional. He likes to describe himself as a limousine driver - just to show that he does not suffer fools and would actually prefer to put his feet up with a good book.

The failings of this book is that Taleb's major philosophical rant - that things are basically uncertain has been the core of ancient religions and philosophies the world over. Leaving aside a Platonic fixity that Taleb uses as a bulwark to his arguments - a huge amount of ancient philosophical and spiritual rhetoric is about uncertainties ... and deep down we know the imperfections and the stench is unbearable. Thanks for teaching me not to believe in the experts - sincerely, but Taleb's veiled dismissal of others in the pre-modern age who basically knew it the way he says it - suggests a lack of extensive reading. Then again, Taleb is selective on his sources and only quotes from works contra his theses (? - something like that).

Yes we are victims of story telling - but actually it's worse. I don't think Taleb does justice to the apparent Socratic quip that "I know one thing and that is I know nothing".

Well, I'm not going to give up on chasing after the rainbow, but thanks for telling me it's a futile enterprise. This will certainly save me money - but don't let's forget that magic sometimes exists as well and luck could do with a fuller treatment, beyond that of chance.

A stimulating scientific exposition that many would benefit from. P.S., The Black Swan is a beautiful bird.

I would not recommend wasting you time on this book. It is a quite mediocre recital of what has been already known. A lot of trivia delivered with a pretense to be a revelation.

This is an eye-opening, sometimes jaw-dropping, intelligent and whitty book giving you a refreshing view of the world and life. It's thought provoking and may very well change the way you view life. A must read!
Ferd moved to Colorado.

The Black Swan is erudite, filled with interesting historical references, anecdotes, and theories. It's also very cynical, taking the view that there is a great fraud taking place because people cannot understand the world in terms of the extremes that modern society allows. Taleb's sense of humor and views on being well-read and intellectually curious sink well with my own.

Most of the ideas in the book are not new, although they are presented in a fresh way, and I think that new perspectives of old ideas are always useful. The main function of the book is not to present ideas like the disproportionate impact of improbable events but to show how ubiquitous they are and how academics and laypeople alike fail to see how things really behave in the social sciences, economics, and finance. As an applied mathematician in the field of prediction and uncertainty, I appreciate his understanding of power law versus Gaussian statistics and his p