Tag Archives: book review

Black Swan Review | Lexaholik.com

Reader Alex passed along his recent The Black Swan book review.

Why Do You Recommend This Book?

The Black Swan made me realize that living a carefully planned out life is a mistake. I remember after I first read the book at the now-closed Borders on Michigan Ave in Chicago while I was still in law school. Afterwards, I walked around outside dazed and confused, and feeling like I’d been living my life all wrong.

What was in the book?

A lot of information, actually, but everything sort of revolves around just a few core principles that stick with me to this day:

  • The events with the greatest impact in your life (Black Swans) are unexpected;
  • They are unexpected because of a variety of cognitive biases; and
  • No matter how hard we try, we will fail to predict these consequential events.

Think back to the biggest events in the U.S. of the past few decades. We’re talking about things like the Internet becoming popular, the terrorist attacks on 9/11, or the Global Financial Crisis. None of these things were expected or predicted. If you read books/articles these days, they all describe a linear history where these things were expected to happen. There’s a ton of hindsight bias in written history, and Taleb gives us more specific details as to why.

Link to full review: http://www.lexaholik.com/black-swan-the-impact-of-the-highly-improbable-review/

Alex Reviews Fooled By Randomness

Reader Alex submitted his review of Fooled By Randomness. Here’s a snippet and a link to his full review.

Fooled By Randomness (FBR) by Nassim Nicholas Taleb (NNT) made me rethink everything I thought I knew about how the world worked. Although it appears in the Business or Finance sections at the bookstore, its lessons are relevant in any area of life that involves risk, uncertainty, or luck.

Why do you recommend this book?

The central message of FBR is that people tend to incorrectly draw strong conclusions about why something happened. In particular, when looking at success in a variety of fields, people tend to discount the role of dumb luck.


HEACH: Antifragile – a review or two, sort of

Antifragile – Things That Gain from Disorder, by Nassim Nicholas Taleb ISBN 9780141038223

While I was reading this book – during the days around Christmas 2013 – a major storm ravaged northern and western Europe. At one point my wife asked “What is that book about, anyway” and the perfect illustration of my answer presented itself in all newspapers the next morning: hundreds of thousands of households in Norway, Sweden, The Netherlands, Germany, France and The United Kingdom were without electricity. How much easier could you want for an example to explain the concept of a fragile system? Some systems are so much optimalised that they work smoothly in the normal situation in Taleb’s vocabulary ‘mediocristan’, but as soon as an event of certain impact unexpectedly, or dismissed as not probable manifests itself, the vulnerable system collapses as a house of cards. The system is fragile and breaks, often with catastrophic consequences.

via HEACH: Antifragile – a review or two, sort of.
HatTip to Dave Lull

‘Antifragile’ by Nassim Nicholas Taleb | Middle Way Society

On the other hand, it also seems that Taleb’s ethical basis is very traditional. He admits to be a faithful follower of the Orthodox Church, and shows no desire to be in the least critical of its metaphysical rigidities. It seems rather odd that he can blame scientists for cherry-picking data but not priests for cherry-picking the Bible, and react strongly to economic bigwigs who unethically subject others to risks, whilst apparently letting off the Church, which has been doing exactly the same thing through its tithing systems from many centuries. Taleb rightly identifies ways that tradition can be antifragile, and organically develop responses to a variety of conditions that are far more effective in the long-term than rationalised interventions. However, he seems blind to the metaphysical dogmas that also often accompany tradition, and the fragility and exploitation that often accompany these dogmas.

via ‘Antifragile’ by Nassim Nicholas Taleb | Middle Way Society.
HatTip to Dave Lull.

Book review: Antifragile | Nick Dunbar

The word ‘optionality’ is too narrow for his purposes, so Taleb coins the term ‘fragility’ for entities or systems that are short options, and ‘antifragility’ for those that are long. Taleb’s point is that when uncertainty increases, culminating in extreme events, ‘fragile’ things die or fail, while ‘antifragile’ ones survive and thrive, like option traders who own out-the-money contracts. He argues that by optimising systems to survive under normal conditions, we’re setting ourselves up for catastrophic failures like the Fukushima nuclear reactor.

I use the words in quote marks because one has to question whether these universal qualities actually exist as Taleb claims. A key issue is Taleb’s objectivist approach to uncertainty. In the technical document co-authored with Raphael Douady, Taleb writes: ‘a coffee cup on a table suffers more from large deviations’. Reading that, I ask, how does a coffee cup suffer? Does it have feelings?

For me, the sensible approach to such questions is to ask the person responsible for the coffee cup how they feel about its fate. Compared with the relative certainty of leaving the cup in the cupboard, how do you feel about the negative consequences of the cup tumbling off the table versus the limited upside of the cup doing its job and successfully conveying coffee to your lips without incident? By stating your relative happiness or unhappiness about these outcomes, you can actually derive your subjective probability that something will happen to the coffee cup.

Now Taleb rules out such approaches from the start, declaring that ‘psychological notions such as subjective preferences…cannot apply to a coffee cup’. That leaves us with Taleb’s universal, suffering coffee cup that I personally care nothing about. You won’t find any discussion of this distinction in Antifragile, which is why if you aren’t a fan of Taleb’s writing style, it’s best to skip the book and download his technical documents for free.

via Book review: Antifragile | Nick Dunbar.