The Black Swan: Second Edition: The Impact of the Highly Improbable: With a new section: "On Robustness and Fragility" (Incerto) Paperback – Bargain Price, May 11, 2010

The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb is a thought-provoking and fascinating book that challenges readers to think differently about the role of randomness and uncertainty in our lives. The book offers a fresh perspective on the impact of rare, unpredictable events - or "black swans" - on our world, and provides readers with insights and strategies for navigating the complexities of a rapidly changing world.The book is divided into three parts. In the first part, Taleb introduces the concept of black swans and explains why they are so important. He argues that black swans are rare, high-impact events that are impossible to predict, yet have a profound effect on our world. He uses examples from history, economics, and other fields to illustrate the impact of black swans on our lives, and explains why we tend to underestimate their importance.In the second part of the book, Taleb explores the concept of "antifragility" - the idea that certain systems actually benefit from stress and volatility. He argues that many of our current systems, from financial markets to political systems, are too fragile and vulnerable to black swan events. He offers strategies for building antifragile systems that can better withstand the shocks and disruptions of the modern world.In the final part of the book, Taleb provides readers with practical advice for navigating a world full of black swans. He offers tips for managing risk, making decisions in uncertain situations, and living a more fulfilling and meaningful life.One of the strengths of the book is Taleb's engaging and accessible writing style. He has a talent for explaining complex ideas in clear and understandable language, making the book easy to follow and enjoyable to read. He also has a keen sense of humor, and his writing is often peppered with amusing anecdotes and observations.Another strength of the book is its relevance to our current world. The COVID-19 pandemic is a perfect example of a black swan event, and Taleb's insights and strategies for managing uncertainty and risk are more relevant now than ever before.However, the book is not without its limitations. Taleb's writing style can be overly repetitive at times, and some readers may find certain sections of the book to be overly technical or dense. Additionally, while Taleb's insights and strategies are certainly valuable, they may not be applicable or accessible to everyone.Overall, The Black Swan is a thought-provoking and engaging book that challenges readers to think differently about the role of randomness and uncertainty in our lives. The book offers valuable insights and strategies for navigating a rapidly changing world, and is sure to be of interest to anyone looking to gain a deeper understanding of the complex systems that shape our world.

If you thought that events such as natural disasters, terrorist attacks, and stock market crashes could be analyzed by traditional Gaussian methodologies, this book will turn you on your ear. The universe, Taleb declares, is Mandelbrotian, not Gaussian, as we will see later.It is hard to pigeon-hole Taleb. If I said that he is a scholar, a statistician, a philosopher, an essayist, and a Jordanian-born New Yorker, that would come pretty close.Taleb spends many pages explaining why conventional logic is just wrong. The title of the book is an example. The title comes from the fact that in philosophy there once was an axiom that declared that "all swans are white." This statement was meant to be an example of a universal truth, that is, until the discovery of Australia and the black swans that live there. The logic is that truth is not determined by what has been observed; it cannot ignore what has not been observed. Taleb refers to the latter part of this statement as "silent evidence."Taleb discusses both positive Black Swans and negative Black Swans (he always capitalizes Black Swans). Positive Black Swans are opportunities that present themselves unexpectedly, such as investment opportunities. Other examples of positive Black Swans cited by Taleb are the discovery of penicillin and Viagra. Taleb has disdain for financial planners (and a lot of other people) who claim credit for successful financial planning. Planning, he claims, assumes that you know the outcome, which you do not. Financial success, he claims, is just luck or at least just taking advantage of opportunities that unexpectedly arise.However, he spends most of the book discussing negative Black Swans, such as natural disasters, terrorist attacks, and stock market crashes, and how they are treated analytically. In risk analysis, these are sometimes referred to as the unknown unknowns. He has disdain once again, for the practitioners of Gaussian probability theory when applied to these types of Black Swans. He also has disdain for Nobel laureates, especially those in economics who apply Gaussian methods. The universe, he declares, is Mandelbrotian, after the mathematician Benoît Mandelbrot, who invented the Mandelbrot set and fractals. Mandelbrot asserts, and is supported by Taleb, that natural phenomena behave more like fractals than like Gaussian variables. Fractals increase (or decrease) in size according a scale factor. What does this mean to you and me? It means that "outlying events" (as Taleb calls them) occur more frequently and with greater intensity than Gaussian analysis would indicate. Taleb claims that the stock market fall of 1987 would only occur once over a period greater than the age of the universe if we trusted Gaussian analysis.So how do we handle Black Swans? Taleb does not have a prescriptive nor comprehensive answer to this question except to warn against ignoring them and to strive to mitigate them. The worst thing is to be blind to them, as we are wont to do. For mitigation methods, Taleb mentions both physical and functional redundancy, terms familiar to researchers and practitioners in resilience and resilience architecting. He provides a list of "ten principles for a Black-Swan-robust society." One of these is the maxim, "Compensate complexity with simplicity," another way of phrasing the well-known Ockham's Razor, also emphasized in resilience analysis.Apart from the analytical insights provided in this book, Taleb is also an excellent story-teller. He fills the book with entertaining anecdotes that illustrate his points.Whether you are looking for an absorbing intellectual read or useful background material for the study of natural and human-made disasters and the resilience of systems to them, The Black Swan is an essential addition to your bookshelf.The reviewer is the author of Architecting Resilient Systems, John Wiley and Sons, Hoboken, NJ (2010)