Automotive Holiday Deals Books Gift Guide Books Gift Guide Shop Women's Cyber Monday Deals Week Learn more nav_sap_SWP_6M_fly_beacon Prime Music Sweepstakes egg_2015 All-New Amazon Fire TV Luxury Beauty Gifts for Her Amazon Gift Card Offer mithc mithc mithc  Amazon Echo Starting at $49.99 Kindle Voyage R6 Siege Shop Now HTL

Format: HardcoverChange
Price:$21.15+ Free shipping with Amazon Prime
Your rating(Clear)Rate this item

There was a problem filtering reviews right now. Please try again later.

Showing 1-10 of 152 reviews(3 star).Show all reviews
143 of 156 people found the following review helpful
on May 10, 2007
I'm a mathematician and former trader, and I've always enjoyed Taleb's work, from his technical tome on derivatives, "Dynamic Hedging," to the brilliant "Fooled by Randomness." These books provided a healthy dose of empirical skepticism about a field that sometimes gets carried away with its own "precise" models -- as well as some insightful commentary on why people are bad at recognizing randomness and making predictions, and how we should be wary of charlatans (and fools) trying to sell us false certainty, especially about financial markets. Unfortunately, "The Black Swan" doesn't say much that "Fooled by Randomness" didn't already say (and say better), and I was disappointed by most of the new material.

First, Taleb's ideas on uncertainty have gone a bit over the edge. Before, he denounced the poor use of over-simplified models (i.e. the bell curve) to model uncertainty; he now seems to have given up on models altogether (save for a brief and justified nod to Benoit Mandelbrot). Rather than just attack bad science, and encourage better science in its place, he seems to view the entire scientific enterprise as hopeless -- adopting the somewhat anti-intellectual attitude that we should stop trying to "understand" markets at all, and be more like Fat Tony, the trader from Brooklyn. His portrayal of mathematical finance types is a complete caricature, which is amusing because, whether he likes it or not, he's one of them! (Taleb has taught in the mathematical finance program at NYU's prestigious Courant Institute.) The idea that mainstream academics are too myopic to see beyond their bell-curve models is laughable, and in many cases, decades out of date -- even undergrads learn about the flaws in the Black-Scholes model, and the problem of "fat tails."

While "Fooled by Randomness" suggests (wisely) that we pay attention to the magnitude of events and not just their probabilities, in "The Black Swan" he throws out probability altogether. This results in some bizarre advice, such as that people should structure their lives (and financial portfolios) to capture "positive black swans," i.e. huge but unlikely turns of good fortune, because "unlikely" is a meaningless probabilistic notion. For example, he suggests that people should put 90% of their assets in extremely safe instruments (like T-bills), while gambling the remaining 10% on risky ventures and hoping to hit it big. He claims that this limits one's downside while waiting for a big windfall ... but what happens when the "risky" 10% gets wiped out in a year or two? Do you then start investing your remaining assets (possibly losing more), or do you just stick with low-yield T-bills for the rest of your life? Taleb seemingly hasn't thought it out that far. By the "positive black swan" logic, thousands of unemployed "actors," waiting for that big break that never comes, have the right idea -- not to mention people who waste their money on lottery tickets (hey, the downside is only a buck, but the upside is millions!). This seems to be a complete reversal from "Fooled by Randomness," which had a brighter view of skilled ("Mediocristan") pursuits like dentistry, where one avoids living at the behest of good or bad fortune altogether.

Finally, Taleb has always exuded snobbery in his writing -- in the past it has almost been charming -- but this time it quickly wears out its welcome. He never fails to remind the reader that he sees himself as an erudite "gentleman trader," a rogue philosopher among philistines and eggheads. Yawn.

I still give this book 3 stars, because it does have some decent content, but read "Fooled by Randomness" instead. If you've already read that book, there's no need to buy this one -- but if you're in the mood to read about the problems of uncertainty and prediction in the markets, check out "When Genius Failed" by Lowenstein, "A Random Walk Down Wall Street" by Malkiel, or (for the eggheads) "Fractals and Scaling in Finance" by Mandelbrot.
33 commentsWas this review helpful to you?YesNoReport abuse
59 of 63 people found the following review helpful
on September 8, 2008
As a mathematical statistician I am a little taken aback by Taleb's lack of scholarship in understanding and appreciating what professional statisticians do. He puts down economists, Nobel laureates, philosopher and statisticians among others. There is a degree of unseemly arrogance on his part and I am sure that some of the other 300 or so reviews on amazon take him to task on that.

It is a shame too because for many of us, it spoils the really good main point of the book which is that Black Swans exist, make predictions difficult if not impossible but can be handle in the stock trading business at least by using his barbell approach.

I found the first 1/3 rd of the book very philosophical extremely redundant yet provocative. The rest of the book was much more interesting to me particular the last few chapter which had the most technical discussion and many points to agree with and also to quibble with.

A Black Swan is an extreme event that is very rare but so significant that it creates instability in averages and can ruin predictions and be either castastrophic (the negative Black Swan) or bring great fortune (the positive Black Swan). These Black Swans are real and Taleb cites many examples. Taleb is also right with his point that some economists are blind to the Black Swan or at least the unpredictability of them. I have often seen major declines in the stock market explained after the fact with seemingly logical but very suspicious and dubious rationalizations. Taleb deserves credit for recognizing this and realizing that in the world he calls extremistan where the Black Swans exist they must be accounted for but no should attempt the futile business of predicting them!

He also recognizes that there is another world where the Gaussian distribution and other light-tailed parametric distributions prevail and he calls this the world of mediocrastan. Here, the usual parametric statistics is useful but in Taleb's view it is not very common in practice to be in a mediocrastan world. This is the world of parametric statistics and is the place where most elementary courses in statistics reside. But here is also where I think Taleb makes a big mistake. He assume that this is the world where all statisticians and econometricians live and play and so these teachings are irrelevant to the practical world. Well, in many of the areas he discusses the parametric statistical models do not work. But probabilist, statisticians and econometricians have realized this for at least the past 60 years. In the 1930s and 1940s the field of nonparametric statistics developed through the work of Pitman, Mann and Whitney and Wilcoxon to name a few. Also the theory of extreme value distributions goes back to Fisher and Tippett in 1929 and was rigorously developed by Gnedenko in the 1940s. Nonparametric statistics deals with general distributions that do not have a simple parametric form and includes the heavy-tailed distributions that Taleb cares about. Also the asymptotic theory of extreme values that Fisher and Tippett, Gumbel and Gnedenko discovered showed that the extreme events had systematic behavior based on the three extreme-value types of distributions. So the extremes can be treated using asymptotic statistical theory just as well as the averages can be characterized asymptotically through the central limit theorem and the stable laws (in the case of a heavy-tailed population distribution). So in some ways Taleb is off and out of gas because he doesn't address or perhaps is even ignorant of this theory.

In the area of finance as well as in other areas, time series models have been useful in developing forecasts. In the world of mediocrastan the Box-Jenkins ARIMA models are very useful for problems in forecast and stochastic control. This was well established with the very popular book by Box and Jenkins that was first published in 1970. However financial data often falls into the world of extremistan and the stationary distributions when they exist are non-Gaussian and heavy-tailed. It is in this context that ARIMA models fail but the statisticians and econometricians have developed other models including the GARCH models which handle this type of data and allow for better predictions. Taleb mentions the GARCH models but only to make fun of them in a very superficial way that does not discuss any of the mathematics associated with these models. Again, I am not sure if Taleb is ignorant about this body of literature or just dismisses it because he see other models that cannot be used to predict as more appropriate.

Taleb is enamored with Mandelbrot and his theory of fractal geometry and the apparent natural properties of fractals. Well at least fractals look like coastlines on the world globe as well as other common items in our natural environment. But is this enough to say that fractals are the only models relevant to extremistan? I am not yet convinced.

This August I went to the Joint Statistical Meetings in Denver. There was a session on the Black Swan and to his credit Taleb was brave enough to accept the invitation of the statistical community to come to discuss the issues in his book. Unfortunately, I was not able to attend that session. But it got mew curious enough to want to read the book and see what Taleb's premise was all about. I do not yet know much about what came out of that session. I hope that at least Mr. Taleb came out of it with a better appreciation of the intelligence of statisticians and the more sophisticated models that he appears to be ignorant of based on the lack of discussion of them in his book.

Another branch of nonparametric statistics developed in the 1970s that is now called resampling methods. One of the more successful of these methods is the bootstrap. I have done some research into bootstrap methods as well as having authored a text on the topic. I believe that the bootstrap approach to time series analysis is another way that these time series with non-Gaussian innovation distributions or the stationary distributions of the time series model can be handled. I am not yet convinced that in the world of extremistan the hope of some form of forecasting must be abandoned as is Taleb's thesis.
22 commentsWas this review helpful to you?YesNoReport abuse
62 of 70 people found the following review helpful
on September 18, 2007
I am a mathematical statistician and I have read the book in question. Although I agree with the book's conclusion, I can only say that the information in the book can be written in about two pages. It does not require a book to say it.
22 commentsWas this review helpful to you?YesNoReport abuse
24 of 25 people found the following review helpful
on September 2, 2007
Taleb is insufferable. His writing meanders around in a sort of self-absorbed epiphany, from his life story, about which he appears to have almost no self-awareness, by way of his intolerant ravings at various Nobel laureates for their blindness to their own fallibilities, a trait he shares in spades, to at last some extremely thought provoking notions on the uncertainty of things. If you can wade through all the former, you may well be rewarded by the latter. But it is a tough slog. His earlier "Fooled by Randomness" was a much better book. His ideas were less developed but at least he seems to have had an editor who insisted he write for the reader.
0CommentWas this review helpful to you?YesNoReport abuse
29 of 32 people found the following review helpful
on June 23, 2007
An interesting but somewhat obvious thesis: highly improbable events with a large impact play a large role in the world; because of this the future is impossible to predict (the 1987 stock market crash, the fall of the USSR, the rise of the internet, etc). NNT (as he refers to himself) provides a lot of interesting examples and shows clearly how 'risk management' is generally a fraud.

He attacks economics and economists for their heavy reliance on mathematical techniques that bear little resemblance to reality. He nicely shows the ridiculous assumptions made by economists, giving an example of a Nobel laureate whose model didn't match the facts. But since the model used elegant mathematics, he received the Nobel.

However, too often he says it's relatively straightforward to prove blah blah blah, but then doesn't. We're supposed to take it on faith that he's got some proof for his claim. Also, he annoyingly talks about how much smarter he is than everyone else, disparaging everyone he can think of. NNT's ego gets in the way of much of the book. This windbag could have written a 100 page book just as effectively, but clearly likes to hear himself write being so impressed with himself.
33 commentsWas this review helpful to you?YesNoReport abuse
25 of 28 people found the following review helpful
on June 26, 2007
Taleb has an important but rather simple message to deliver. It can be summed up in three words: Rare events happen. That was the point of Fooled by Randomness (which is a better book), and it is the point here.

Once this main point is made (and it is irrefutable), there are any number of embellishments, examples, and explanations that can help the reader round out his or her understanding of the concept. This would be a 5-star book if the author had written it to help the reader understand the basic concept and its implications.

Instead, the book reads like an ego trip. His delivery is maddening. He seems to be filled with anger. The book viciously attacks many well-meaning, competent people in academia, finance, science, and other fields for no apparent reason, other than that they don't see (or agree with) his point.

For that reason, I found the book hard to read. Some reviewers have called it funny; I found no humor in it. Instead, what I found is an author who clearly thinks he is smarter than everyone else and allows that to get in the way of clarity. He seems to take joy in belittling those who "outrage" him by their stupidity. (Really, what kind of person gets "filled with rage" over others being unable to see an academic point?)

Another quality that makes this book hard to read is the deliberately opaque way that Taleb chooses to make many of his points. If there is a straightforward way or an obscure way to make a point, he consistently selects the obscure way...using unfamiliar references, saying "secundo" instead of "second," inventing a non-existent author to make a point about book sales rather than choosing a real-life example, and so on. Taleb seems to think such writing is "erudition" (a quality he clearly admires). I believe that it puts an unfortunate academic-style veil over the book.

I've learned from both of Taleb's books--Fooled by Randomness and this one. I've learned not only the main point--that rare events happen, and they happen more often than we usually expect--but I've also learned something about how not to write. Writing I most admire is deliberately written to be understood, not to get in the way of understanding.
11 commentWas this review helpful to you?YesNoReport abuse
32 of 38 people found the following review helpful
on August 11, 2007
The fundamental premise of the book is that it is the unknown or highly improbable events that have the biigest impact. There are myriad examples of how business, society and individuals closely monitor the known risks yet do not position to limit the downside of negative black swans or expose themselves to positive black swans.

The concepts in the book are good. For example the fallacy of trying to apply rational predictive tools, like normal distribution curves, to social science being one of the best ones. It is interesting with the current subprime mortgage issues causing roller coaster fluctuations on the market over the last couple of weeks: it reinforces that market experts have little idea about what is really going on.

I also like the concept that history is always written with 20/20 hindsight. NNT looks at diaries at the time immediately prior to WW1 which don't predict the turmoil, but to historians after the event it was all as plain as day as to what was happening.

The big problem i have with the book is that it is written in such a pompous and arrogant style. NNT isn't really trying to engage the reader, it seems he is trying to show the world what a superior individual he is to the rest of us. According to him he is a great mathematician, philosopher, writer, trader, statistician amongst the many other talents which he probably didn't have time to mention. This book could have been really good but unfortunately the author forgets that his readers are more important than him and while he leaves you slightly intrigued I found myself more frustrated and disengaged.
22 commentsWas this review helpful to you?YesNoReport abuse
31 of 37 people found the following review helpful
on September 19, 2010
I'll start out with a brief summary. The basic premise of the book is enlightening: the things that most effect your life and history are things that are highly impactful but highly improbable. This is called a "Black Swan". The impact of the Web, 9/11, Katrina, the financial crisis, etc. are all events unforeseen, unplanned for, but had an enormous impact.

For most of the book, he resigns himself and all of us to accepting that we can't much plan for the future so don't try. That's the part I'm not too fond of even if he has a point. We can do some scenario planning as a society, as economists, etc. and understand that there are limitations. I think we can also plan for _resilency_ in the case of negative Black Swans, which I think is too often overlooked. In the second edition of the book, he has a postscript essay which, however, does offer some good suggestions.

Lots of good ideas in the book. What makes it an unpleasant read is his ranting. In the process of his exposition, he really disses economists (of which he is one) as being pretty much useless people. There are a lot of people and a lot of professions he believes are useless. Fine. But saying it once is enough.

Worth a read.
11 commentWas this review helpful to you?YesNoReport abuse
15 of 17 people found the following review helpful
on August 8, 2007
NNT (as he calls himself) has some fascinating points and some interesting turns of phrase, though he does rather go on and on and on.... Leaving aside the long-winded somewhat self-absorbed writing style, NNT makes some interesting points that he illustrates well. He discusses the problems with the fact that humans seek validation for what they think (rather than challenging themselves) and why we cannot predict well in many circumstances. He spends a lot of time discussing the problems inherent with the use of a bell curve to predict things where the impact of extreme events really matter. Finally he spends (too little) time on what to do about all this. I took a few key points away from the book:
- It is better, perhaps, to try and be generally right rather than precisely wrong
- Beware of looking for more rules than really exist
- Watch out for a tendency to prepare for "last war"
- Rare and consequential events can be much more important than the "normal" stuff in the bell curve
- Some things (that he calls "mediocristan") are such that the most typical is average and single instances don't impact the total much
- Others (he calls these "extremistan") are more winner-takes-all kinds of environments where extreme events matter most
- He makes the point that a thousand days cannot prove you right but one can prove you wrong

There's more but it's a very long book and I am not going to attempt to summarize the nuggets spread throughout it here. Be prepared for a slog if you want to get everything you can out of the book - it goes on and on. 3 stars to average out 1 star for length and incoherence in places and 5 stars for some great content.
0CommentWas this review helpful to you?YesNoReport abuse
18 of 21 people found the following review helpful
on September 24, 2007
There's no doubt that Nassim Taleb is a brilliant man. And, there's no doubt that he is frustrated by having to work among people who don't get it. What is there to get? Simply that the quest for certainty -- through mathematics, science or other logic disciplines -- may end up being the very thing which obfuscates the truth; that we end up not being able to see the forest for the trees. I think what he is saying is that there can never be certainty; that there will always be Black Swans...random events.
The reason why I say "I think" that is what he is saying is because there is so much stuff here -- a lot of which is totally irrelevant. He talks about his home town, seemingly just to wax nostaligic, though he may use the vignette to talk -- belaboredly -- about a point. Among the other stuff he presents is: an unusally high regard for the French language; too much - again irrelevant - reference to and back-story about thought leaders, and; palpable disdain for some colleagues in the quantitative field. If you can get through all of that and hold on to the nuggets, though, you will see some fresh thinking. Just his distinction between 2 different systems of thought is worth the work required. There are other presentations which may shift the way you think about things, too. In the end, it's worth reading, but you will have to focus on what's important because he doesn't.
0CommentWas this review helpful to you?YesNoReport abuse
Customers who viewed this also viewed

Antifragile: Things That Gain from Disorder (Incerto)
Antifragile: Things That Gain from Disorder (Incerto) by Nassim Nicholas Taleb (Paperback - January 28, 2014)

Thinking, Fast and Slow
Thinking, Fast and Slow by Daniel Kahneman (Paperback - April 2, 2013)

Send us feedback

How can we make Amazon Customer Reviews better for you?
Let us know here.