The Black Swan: The Impact of the Highly Improbable

By Nassim Nicholas Taleb.

I find it difficult to distinguish between "The Black Swan" and Taleb's previous book "Fooled By Randomness." You could easily move chapters between the two and not notice the edits.

This doesn't change the fact that Taleb deals with deeply important themes-- randomness and our perpetual inability to distinguish between luck and skill.

These are difficult subjects. He does have great points when argues that success and successful people have luck to thank as much as their own skill. On the other hand, you try telling that to a millionaire.

The book also covers predictions-- spotting the kind you can trust, spotting pure fiction, and how to plan for it all.

Contingency and opportunity planning play a large part in Taleb's world.

Stylistically, the book is a fun read. Taleb is fond of ornate examples and interesting stories that illustrate his points. This can work against him a little though in that it's hard to take the book seriously.

Details I want to remember....

There are different kinds of randomness. Taleb refers to this as comming from Mediocristan or Extremistan.

Randomness from Mediocristan is simple and predictable and easy to model. For example, if you weigh a thousand people, you will come up with an average and distribution for that sample. If you then add the worlds heaviest or worlds lightest person to that sample, your average wouldn't change much. Our weights are random but from Mediocristan.

Contrast this with randomness from Extremistan. If you calculated the average wealth of one thousand people, you would also come up with an average and a distribution. But, if you added the worlds richest man to this sample, his wealth would totally blow your average and distribution out of the water.

This difference brings us to the center of Taleb's thesis; due to various biases especially survivor bias, and because we often assume that randomness is from Mediocristan and when it really from Extremistan, we make choices that are really gambles because we are not aware of the risks.