Customer Rating:  
Summary: surprise: the ego trips a fuse
Comment: Never before have I felt the urge to advise amazon buyers not to buy a book. But there's a first time for everything. Sadly, this book is an intellectual and stylistic mess.
In contrast to Mr Taleb's previous book (Fooled by Randomness) Fooled by Randomness: The Hidden Role of Chance in Life and in the Marketswhich I rate as a five star buy this book has nothing new and isn't even funny.
The basic argument is apparent from the title: just because you've never seen it before doesn't mean you won't see it tomorrow. Swans were assumed to be always white, until the discovery of black swans in Australia.
There are lessons to be drawn from this critique of what philosophers call the problem of induction, but not enough to fill a book. Instead, the author lets off a scattershot at several bats in a belfry.
First in the firing line is Plato. (Perhaps it's neo-Platonists, but an argument constructed on terms such as "What I call Platonicity" makes it hard to tell. The level of debate has already descended to the sophistication of a coconut shy.)
Second is the normal distribution. True, a roll of the die shows you one to six with equal probability. But two dice? Now we're talking a bell curve. The author seems to think that noone has wrestled before with the problem of extreme odds-against results, but's that's the future for you: hard to predict. A 95% confidence level is just that: once about every twenty times you're going to get an unexpected result. Surprise? Often. It is argued that these unusual unwelcome results are discounted from conventional thinking, and that the catastrophic consequence makes the tail of the distribution disproportionately important. Very true, but not new. Mountaineers and medical researchers (to name but two) have been confronting this problem for a century.
Not quite argued (but implied) is that all statistics is balderdash. Well, it's a branch of mathematics that deals with uncertainty, so we can't be sure.
Stylistically the book is all over the place. Reminiscence of the author's time as a "quant" (a statistical analyst of financial markets) elbow aside pseudo philosophical discussion, only to give place to some boasting about conferences he's addressed on the strength of his previous book. In between we get some noveletish stuff about "Fat Tony", "Yevgenia" (author of a bestseller that sounds unreadable), and a "fictional" character called Tulip. (Who is surely a direct descendant of Lupin, Mr Pooter's son in diary of a Nobody.)
We just can't predict, is the sum of all this. Indeed not, but we can bet that this book will be out of print just as soon as financial bestsellers go from "whoever would have thought it?" to next year's conspiracy theories.
The author thanks his editor, a certain Will Murphy. Mr Murphy, you didn't do your job, did you?
Customer Rating:
Summary: TERRIBLE
Comment: Not good: will I finish it? Won't I? Guess I'll have to if I want to assess fairly, but it'll be hard work. Arrogance seeps through every word and, at the end of the day, he's repeatedly hammering home one point that anyone with a degree of critical thinking will be aware of anyway.
No, I'm not going to bother finishing. Won't put myself through it and I'd recommend that you don't bother either.
Customer Rating:
Summary: Not what I hoped
Comment: I made assumptions when I bought this book that it was about the current "Black Swan" event of the credit crunch. Instead it is more about how people do not expect the unexpected and details instances of when it has happened. I have to be honest, I was disappointed and skimmed through the book without reading it fully. The bits I read I had seen before in other publications. Maybe it got to the current events but I had already lost interest.
Customer Rating:
Summary: Fascinating
Comment: There are already a number of reviews that analyse this book in more detail than I could hope to do so myself, so I shall not write a long review. However, I personally found this book to be a fascinating insight into certain aspects of economics and even wider human behaviour. Whether the author is entirely right seems hardly the point -- there are clearly so many others and so many other systems which are fundamentally flawed. A fascinating read for anybody interested in economics in a wider sense and the human interpretation or quantification of risk.
Customer Rating:
Summary: Probably right
Comment: The last book of the "enfant terrible" of finance is a must read, and I am saying that without having any links to amazon. However, while his tone works in getting his message across, it is not the best way of gaining friends among decision makers, which is a pity as many of his views are useful for managing risk.
I had the opportunity to see Nicholas Taleb in Barcelona a few years ago. Temporarily seduced by his eloquence and charm, and the fact that I got his book for free, I immediately read "Fooled by randomness". It was good to read someone that was not politically correct and that was as tough with the establishment views as the financial markets. "You are as good as your last trade", he said in his speech, which unfortunately is as true for traders as for society.
Despite recommending his book "The black swan", the first 180 pages are obsessed with explaining the difference between Mediocristan and Extremistan. For anyone that has read "Fooled by randomness", it becomes extremely repetitive, but keep going because it is Taleb. In addition, it is interesting to gain some background on the philosophers that would support his views, from Sextus Empiricus to Montaigne.
He finally gets to the point from chapter twelve onwards. There are some great sentences and good citations. I will start with the ones dedicated to financial regulators, valuable as the book was published early in 2007, so they are like a prediction of the regulators' inability to avoid the current crisis:
"regulators in the banking business are prone to a severe expert problem and they tend to condone reckless but (hidden) risk taking".
For those that hold anti capitalist views, his next prediction of the Lehman case will prove useful:
"The Achilles' heel of capitalism is that if you make corporations compete, it is sometimes the one that is most exposed to the negative Black Swan that will appear to be the most fit for survival".
It is all coherent with his statement "No one in particular is a good predictor of anything. Sorry".
Apart from the inability to plan, the book stresses, probably unwillingly, the importance of having a qualitative rather than a quantitative view of risk management. This view is perfectly expressed in his strong statement "people that worry for pennies instead of dollars can be dangerous to society."
As for modeling, he pays his tribute to Benoît Mandelbrot and fractal theory.
For other views on risk management and the current financial crisis, check my blog at []
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