The Black Swan
I finally started reading Nassim Nicholas Taleb’s The Black Swan: The Impact of the Highly Improbable
with it. Taleb’s very straightforward in attacking the limitations of Bell Curve assumptions and the common assumptions regarding the extent of uncertainty ( most people, unless they are futurists or, say, design computer models, seldom contemplate questions of deep uncertainty that might be in play). The book is really a tutorial on epistemology.
I’ll review this one when I’m finished.
March 11th, 2008 at 2:48 pm
The scope is broad and deep. I read it last autumn, a focused yet casual first pass over the course of 2-3 months. I am going to need a deeper second pass to really get what I need out of it. It just touches on too many ideas and topics that I know very close to nothing about. Looking forward to zen’s incisive distillation.
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The hobbyist in me was constantly looking for a way to quantify the fat-tail / power-law into a workable mechanism for a wargame model. My tentative conclusion is that Taleb says it’s possible for mild-strain chaos (grey swan), but not for the wild randomness of the black swan. Please advise if you grok that bit.
March 11th, 2008 at 3:07 pm
I’ve just (last night) finished it — it’s a brilliant, exciting book!
Moon,
It seems to me that a quantifiable black swan would be a grey swan by definition.
March 11th, 2008 at 3:30 pm
vimothy, yes I think I backed into that conclusion, as much as I didn’t want to hear it. ;-\ Still, even if not quantifiable, can you imagine any way to model it qualitatively in the context of a discrete event sim? i.e. how do you get your model to say that *something* unexpected but very rare happened, even if the quantification is dismissed?
March 11th, 2008 at 8:28 pm
Definitely looking forward to your take. Like moon, I’m going to have to re-read it (if I ever get it back!) to fully "get it."
March 11th, 2008 at 9:20 pm
Here’s a Taleb-recommended journal:
http://journal.sjdm.org/
soob, my tactic is: alternate my reservations at two local libraries, so that I am always queued up to get one of the copies. ;-\ (Or maybe you mean you lent out your own copy and it might not be returned?) Another option is to check out the 12-disc audio, burn the MP3 tracks, and listen at leisure.
March 11th, 2008 at 9:42 pm
I thought you all would enjoy the these links:
First, Taleb on EconTalk. He discussed his ideas with Russ Roberts.
http://www.econtalk.org/archives/_featuring/nassim_taleb/index.html
Second, Taleb’s own site.
http://www.fooledbyrandomness.com/
I enjoyed his first (actually second) book and look forward to reading this one, eventually. Being a former trader I am glad to know that there are intelligent people in finance (although he no longer trades or "runs" money.) Taleb was very effective in bursting a lot of intellectual models on the Street, too bad he no longer comments on the markets.
Regards,
TDL
March 12th, 2008 at 1:54 am
Grazia TDL ! – going to post up soon on another site of yours
March 12th, 2008 at 4:29 pm
Mark,
Looking forward to it. Thanks again.
Regards,
TDL
March 15th, 2008 at 6:21 am
I own this book but haven’t started reading it yet. Perhaps you can provide us with a review once you have completed it?
March 15th, 2008 at 3:54 pm
Definitely.