The Black Swan: The Impact of the Highly Improbable
04/17/2007 AD published
The book focuses on the extreme impact of rare and unpredictable outlier events—and the human tendency to find simplistic explanations for these events, retrospectively. Taleb calls this the Black Swan theory.
A central idea in Taleb's book is not to attempt to predict Black Swan events, but to build robustness to negative events and an ability to exploit positive events. "Robustness" reflects an attitude where nothing is permitted to fail under conditions of change.
Taleb contends that banks and trading firms are vulnerable to hazardous Black Swan events and are exposed to losses beyond those predicted by their defective financial models.
The book asserts that a "Black Swan" event depends on the observer: for example, what may be a Black Swan surprise for a turkey is not a Black Swan surprise for its butcher. Hence the objective should be to "avoid being the turkey", by identifying areas of vulnerability in order to "turn the Black Swans white".
Lattitude: 40.7128° N
Longitude: 74.006° W
Region: North America
Modern Day United States
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Nassim Nicholas Taleb Lebanese-American essayi...
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