Black Swan: under the sign of unpredictability. Black Swan
Nassim Nicholas Taleb
The Impact of the Highly Improbable
Nassim Nicholas Taleb
Black Swan
Under the sign of unpredictability
Prologue. About bird plumage9
Part I Anti-library of Umberto Eco,
or About searching for confirmations28
Chapter i. Years of teaching as an empiricist-skeptic31
Chapter 2. Eugenia's Black Swan59
Chapter h. Speculator and prostitute63
Chapter 4. A thousand and one days,
or How not to be a sucker81
Chapter 5. Proof-smacking proof!100
Chapter 6: Narrative Distortion117
Chapter 7. Life on the Threshold of Hope153
Chapter 8. Fortune's Favorite Giacomo Casanova:
problem of hidden evidence174
Chapter 9. Game error,
or the uncertainty of the "nerd"207
Part II. It is not given to us to foresee225
Chapter 10. Predictive paradox228
Chapter 11. Discovery based on bird droppings271
Chapter 12. Epistemocracy, dream310
Chapter 13. Painter Apelles,
or How to live in conditions of unpredictability 326
Part III. Gray swans of Extremistan 343
Chapter 14. From Mediocristan to Extremestan and back 345
Chapter 15. Normal distribution curve,
great intellectual deception 366
Chapter 16. Aesthetics of chance 402
Chapter 17. Locke's Madmen,
or "Gaussian curves" are out of place 432
Chapter 18. "Linden" uncertainty 449
Part IV, final 459
Chapter 19. The middle is half, or How to make ends meet
ends with the Black Swan 459
End 464
Epilogue. White swans of Eugenia 466
Dictionary 469
Bibliography 474
Dedicated to Benoit Mandelbrot, a Greek among the Romans
PROLOGUE. About bird plumage
About bird plumage
D O After the discovery of Australia, the inhabitants of the Old World were convinced that all swans were white. Their unshakable confidence was fully confirmed by experience. The sighting of the first black swan must have been a big surprise to ornithologists (and indeed anyone who is in any way sensitive to the color of a bird's feathers), but the story is important for another reason. It shows within what strict boundaries of observation or experience our learning occurs and how relative our knowledge is. A single observation can negate an axiom that has been developed over several millennia, when people admired only white swans. To refute it, one (and, they say, rather ugly) black bird was enough*.
I go beyond this logical-philosophical question into the realm of empirical reality, which has interested me since childhood. What we will call a Black Swan (with a capital B) is an event that has the following three characteristics.
Firstly, it is anomalous, because nothing in the past predicted it. Secondly, it has enormous impact. Third, human nature forces us to come up with explanations for what happened after it has happened, making an event that was initially perceived as a surprise understandable and predictable.
Let's stop and analyze this triad: exclusivity, impact and retrospective (but not forward) predictability**. These rare Black Swans explain almost everything that happens in the world, from the success of ideas and religions to the dynamics of historical events and the details of our personal lives. Since we emerged from the Pleistocene - approximately ten thousand years ago - the role of Black Swans has increased significantly. Its growth was especially intense during the Industrial Revolution, when the world began to become more complex, and everyday life - the one we think about, talk about, which we try to plan based on the news we read from newspapers - went off the beaten track.
<*Распространение камер в мобильных телефонах привело к тому, что читатели стали присылать мне изображения черных лебедей в огромных количествах. На прошлое Рож-дество я также получил ящик вина "Черный лебедь" (так себе), видеозапись (я не смотрю видео) и две книги. Уж лучше картинки. (Здесь и далее, за исключением особо оговоренных случаев, - прим. автора.)
** The expected absence of an event is also a Black Swan. Please note that according to the laws of symmetry, an extremely improbable event is the equivalent of the absence of an extremely probable event. >
Think how little your knowledge of the world would help you if, before the war of 1914, you suddenly wanted to imagine the further course of history. (Just don't fool yourself by remembering what your boring school teachers filled your head with.) For example, could you have foreseen Hitler's rise to power and a world war? And the rapid collapse of the Soviet bloc? And the outbreak of Muslim fundamentalism? What about the spread of the Internet? And what about the market crash in 1987 (and a completely unexpected revival)? Fashion, epidemics, habits, ideas, the emergence of artistic genres and schools - everything follows the “Black Swan” dynamics. Literally everything that has any significance.
The combination of low predictability and power of impact turns the Black Swan into a mystery, but that’s not what our book is about. It's mainly about our reluctance to admit that it exists! And I don’t mean just you, your cousin Joe and me, but almost all representatives of the so-called social sciences, who for more than a century have been flattering themselves with the false hope that their methods can measure uncertainty. Applying vague science to real world problems has a ridiculous effect. I have seen this happen in economics and finance. Ask your “portfolio manager” how he calculates risks. He will almost certainly give you a criterion that excludes the possibility of a Black Swan - that is, one that can be used to predict risks with about the same success as astrology (we will see how intellectual fraud is dressed up in mathematical clothes). And so it is in all humanitarian spheres.
The main point this book makes is our blindness to randomness, especially on a large scale;
This book is written in a very brash, arrogant, informal style. Well, I’m not at all against it, but the book is read very cheerfully and naturally. Thanks to emotions, a book is remembered better. He himself makes a lot of references to Taleb and mentions his book. He reports that some of his views were formed thanks to it.
About what:
The book is about statistics, but not really. A book about immeasurably rare, unpredictable, unpredictable events of enormous significance.
Why Black Swan?
Before the discovery of Australia, the inhabitants of the Old World were convinced that all swans were white. Their unshakable confidence was fully confirmed by experience. The sighting of the first black swan must have greatly surprised ornithologists.
Black Swan is an event that has the following three characteristics:
1. It is anomalous because nothing predicted it before.
2. It has enormous impact.
3. Human nature forces us to come up with explanations for what happened after an unpredictable event has occurred, making the event (in people's minds) perceived as a surprise natural and predictable.
Examples of Black Swans:
- The September 11th terrorist attack;
- financial crisis of 1987;
- Internet distribution;
- The Second World War;
- the rapid collapse of the Soviet Union.
Extremistan- this is an environment in which the extreme values in the sample are not limited in any way and can differ by orders of magnitude from the average value (for example, the funds of city residents. Bill Gates may have 99.6% of the entire money supply of the city).
Problems voiced:
1. Application of the Gaussian normal distribution curve in all cases, while it is applicable only in “Central Stan”, but not applicable in any way in “Extreme Stan”.
We teach people the methods of “Central”, and then release them to “Extremistan”. This is the same as looking at the height of the blades of grass in a clearing, but ignoring the presence of trees on it (Rare, but huge. One tree will weigh more than all the blades of grass combined).
That is, the author does not criticize sigma itself (standard deviation), but the incorrect choice of application boundaries (in particular, in economics). If the world followed a Gaussian distribution, an episode like the 1987 market crash (more than twenty standard deviations) would occur no more often than once every few billion lifetimes of the universe.
2. Excessive attention to “what happened” and losing sight of “what could happen,” even though this has never happened before.
The turkey is fed every day so that it can be turned into a treat before Thanksgiving. But from the point of view of the turkey, every day of feeding strengthens her in the belief that she will continue to be fed, because... this is fully confirmed by previous experience, i.e. Nothing bad had ever happened before. The longer she is fed, the more confident she is that at this particular time they also want to feed her. And on the very last day her confidence is at its highest, but this point coincides with the day when the farmer decides to stab her.
3. Confusion of the concepts “there is no evidence of possibility” with “there is evidence of impossibility.”
The same example with black swans. Just because black swans were never seen (before 1697) is not proof that their existence is impossible. Thousands of white swans do not prove the absence of black swans in the world.
4. The accumulation of confirmatory knowledge does not increase our knowledge.
Look for something that might disprove your theory rather than confirm it.
5. The "nerd" mistake.
Consideration of statistics using gambling as an example. This is an overly refined environment where all contingencies are known and calculated in advance. In real life, everything is much more unpredictable.
6. The problem of hidden evidence.
The Greek philosopher Diagoras, nicknamed the atheist, was shown images of people who prayed to the gods and were saved from a shipwreck. It was understood that prayer saves from death. Diagoras asked:
- Where are the images of those who prayed, but still drowned?
7. It is fundamentally impossible to predict history.
Because this is impossible without predicting the invention of new technologies. But it's impossible to come up with a new technology until someone actually comes up with it. Let's remember the wheel. Let's say you're a Stone Age historian tasked with predicting the future for your tribe's planning department. In this case, you will of course have to predict the invention of the wheel, otherwise you will miss the point. But since you can foresee the invention of the wheel, then you already know what it looks like, and, accordingly, you already know how to make a wheel, so you have already invented it. Future inventions are incredibly difficult to predict. In 1899, the head of the UK Patent Office resigned because he believed there was nothing more to discover.
And what to do with all these problems?
1. Try as many different things as possible.
2. Focus on the consequences of a particular choice, rather than on the probabilities of pros and cons (since probabilities cannot be adequately assessed, but consequences can).
3. Do not put your thinking and perception into a framework.
Funny moments:
1. It has been found that statisticians have a habit of leaving their brains in the classroom and making the most trivial logical errors outside the classroom. In 1971, psychologists Danny Kahneman and Amos Tversky decided to torment statistics professors with questions that were not framed as statistical questions. These professors would fail the exams that they themselves take (an example of a problem is given later in the book)
2. Comparison of the personalities “practitioner businessman” and “doctor of statistics”, differences in ways of thinking and in answers to the same statistical problems.
Suppose we have an absolutely fair (perfectly shaped) coin, that is, the probability of heads and tails falling out is the same for it. I tossed it ninety-nine times in a row and got heads every time. What is the probability that the hundredth time it will be heads?
Doctor of Statistics:
- Well, of course, 50%, if we proceed from the absolute equality of chances and the independence of a single throw from all others
Businessman:
- I don’t believe that a coin that lands on heads 99 times is perfectly balanced. They are trying to deceive me. No more than 1% per eagle.
Powerful excerpt:
Black Swan logic makes what you don't know much more important than what you do know. After all, if you think about it, many Black Swans came into the world and shook it precisely because no one was expecting them.
Take the terrorist attacks of September 11, 2001: if this kind of danger could have been foreseen on September 10, nothing would have happened. Fighter planes would have been patrolling around the World Trade Center towers, interlocking bulletproof doors would have been installed on the planes, and the attack would not have taken place.
A new kind of ingratitude
It's always sad to think about people who have been treated unfairly by history. Take, for example, “damned poets” like Edgar Allan Poe or Arthur Rimbaud: during their lifetime, society shunned them, and then they were turned into icons and their poems began to be forcibly shoved into unfortunate schoolchildren. (There are even schools named after poor students.) Unfortunately, recognition has come at a time when it does not give the poet either joy or the attention of ladies. But there are heroes whom fate treated even more unfairly - these are those unfortunate people whose heroism we have no idea about, although they saved our lives or prevented a catastrophe. They left no traces, and they themselves did not know what their merit was. We remember the martyrs who died for some famous cause, but we do not know about those who fought an unknown struggle - most often precisely because they achieved success. This ingratitude makes our unsung hero feel worthless. I will illustrate this point with a thought experiment.
Imagine that a legislator with courage, influence, intelligence, vision and tenacity manages to pass a law that comes into force and is implemented without question on September 10, 2001; By law, every pilot's cabin must be equipped with a securely locked, bulletproof door (the airlines, already struggling to make ends meet, fought back desperately but were defeated). The law is being introduced in case terrorists decide to use planes to attack the World Trade Center in New York. I understand that my fantasy is bordering on delirium, but this is just a thought experiment. The law is unpopular with airline employees because it makes their lives more difficult. But he certainly would have prevented September 11th.
The man who introduced mandatory locks on cockpit doors will not be honored with a bust in the city square, and even his obituary will not write: “Joe Smith, who prevented the disaster of September 11, died of cirrhosis of the liver.” Since the measure apparently turned out to be completely unnecessary, and a lot of money was spent, voters, with the strong support of the pilots, will probably remove him from office. He will resign, become depressed, and consider himself a failure. He will die in full confidence that he has done nothing useful in his life. I would definitely go to his funeral, but, reader, I can't find him! But recognition can have such a beneficial effect! Believe me, even someone who sincerely claims that he doesn’t care about recognition, that he separates work from the fruits of labor, even he reacts to praise with a release of serotonin. You see what a reward is destined for our unnoticed hero - even his own hormonal system will not pamper him.
Let's think again about the events of September 11th. When the smoke cleared, whose good deeds were thanked? Those people you saw on TV - those who committed heroic deeds, and those who before your eyes tried to pretend that they were performing heroic deeds. The second category includes figures like the chairman of the New York Stock Exchange, Richard Grasso, who “saved the stock exchange” and received a colossal bonus for his services (equal to several thousand average salaries). To do this, all he had to do was ring the bell in front of the television cameras, announcing the start of trading (television, as we will see, is a carrier of injustice and one of the most important reasons for our blindness to everything related to Black Swans).
Who gets the reward - the head of the Central Bank who prevented a recession, or the one who “corrects” the mistakes of his predecessor by being in his place during the economic recovery? Who is ranked higher - the politician who managed to avoid war, or the one who starts it (and is lucky enough to win)?
This is the same twisted logic that we have already seen when discussing the value of the unknown. Everyone knows that prevention should be given more attention than therapy, but few give thanks for prevention. We extol those whose names appear on the pages of history books - at the expense of those whose achievements have passed historians by. We humans are not just extremely superficial (this could still be corrected somehow) - we are very unfair.
How the book could be useful to any reader:
The book contains a lot of information about the intuitive perception of statistics by humans. That something that happened recently and “before your eyes” is perceived as a more frequent occurrence than it actually is. It also describes the tendency of people to overestimate their capabilities, competence, qualifications, etc. All this is shown using examples of experiments carried out, the information is given in numbers.
At the very least, the book can strengthen your persuasion skills, as well as the skill of resisting what they are trying to do to fool you. Increases the degree of critical thinking. In this regard, it resembles the book “The Psychology of Influence” by Robert Cialdini.
Fly in the ointment:
What I learned:
Somewhat more critical thinking. Calculation of some cognitive biases. The ability to switch from “nerd” mode to “businessman” mode and back to look at phenomena from different points of view.
Ratings:
Improvement of general horizons: 5/5
Practical use: 2/5
Drive while reading: 5/5
More books from this author:
Nassim Nicholas Taleb
The Impact of the Highly Improbable
Nassim Nicholas Taleb
Black Swan
Under the sign of unpredictability
Prologue. About bird plumage9
Part I Anti-library of Umberto Eco,
or About searching for confirmations28
Chapter i. Years of teaching as an empiricist-skeptic31
Chapter 2. Eugenia's Black Swan59
Chapter h. Speculator and prostitute63
Chapter 4. A thousand and one days,
or How not to be a sucker81
Chapter 5. Proof-smacking proof!100
Chapter 6: Narrative Distortion117
Chapter 7. Life on the Threshold of Hope153
Chapter 8. Fortune's Favorite Giacomo Casanova:
problem of hidden evidence174
Chapter 9. Game error,
or the uncertainty of the "nerd"207
Part II. It is not given to us to foresee225
Chapter 10. Predictive paradox228
Chapter 11. Discovery based on bird droppings271
Chapter 12. Epistemocracy, dream310
Chapter 13. Painter Apelles,
or How to live in conditions of unpredictability 326
Part III. Gray swans of Extremistan 343
Chapter 14. From Mediocristan to Extremestan and back 345
Chapter 15. Normal distribution curve,
great intellectual deception 366
Chapter 16. Aesthetics of chance 402
Chapter 17. Locke's Madmen,
or "Gaussian curves" are out of place 432
Chapter 18. "Linden" uncertainty 449
Part IV, final 459
Chapter 19. The middle is half, or How to make ends meet
ends with the Black Swan 459
End 464
Epilogue. White swans of Eugenia 466
Dictionary 469
Bibliography 474
Dedicated to Benoit Mandelbrot, a Greek among the Romans
PROLOGUE. About bird plumage
About bird plumage
D O After the discovery of Australia, the inhabitants of the Old World were convinced that all swans were white. Their unshakable confidence was fully confirmed by experience. The sighting of the first black swan must have been a big surprise to ornithologists (and indeed anyone who is in any way sensitive to the color of a bird's feathers), but the story is important for another reason. It shows within what strict boundaries of observation or experience our learning occurs and how relative our knowledge is. A single observation can negate an axiom that has been developed over several millennia, when people admired only white swans. To refute it, one (and, they say, rather ugly) black bird was enough*.
I go beyond this logical-philosophical question into the realm of empirical reality, which has interested me since childhood. What we will call a Black Swan (with a capital B) is an event that has the following three characteristics.
Firstly, it is anomalous, because nothing in the past predicted it. Secondly, it has enormous impact. Third, human nature forces us to come up with explanations for what happened after it has happened, making an event that was initially perceived as a surprise understandable and predictable.
Let's stop and analyze this triad: exclusivity, impact and retrospective (but not forward) predictability**. These rare Black Swans explain almost everything that happens in the world, from the success of ideas and religions to the dynamics of historical events and the details of our personal lives. Since we emerged from the Pleistocene - approximately ten thousand years ago - the role of Black Swans has increased significantly. Its growth was especially intense during the Industrial Revolution, when the world began to become more complex, and everyday life - the one we think about, talk about, which we try to plan based on the news we read from newspapers - went off the beaten track.
About the book
- Original title: The Black Swan: The Impact of the Highly Improbable
- First edition: April 17, 2007
- Number of pages: 736
- Publishers: Azbuka-Atticus, KoLibri
- Editor: Marina Tyunkina
- Genre: Aphorisms and quotes
- Age restrictions: 16+
Unpredictable events are the engine of all humanity. Over the last decade alone, humanity has experienced a number of severe disasters, shocks and cataclysms that do not fit into the framework of the most fantastic predictions. 52-year-old financial guru Nassim Taleb tried to convey these thoughts to the reader. His creation is an invaluable milestone in shaping the consciousness of the ideal investor.
Nassim Taleb calls such unpredictable events Black Swans. He is convinced that it is they who give impetus to both history as a whole and the existence of each individual person. And to succeed, you need to be prepared for them.
The name “Black Swan” is by no means accidental. Have you seen black swans? Are you sure that such people do not exist and that it is impossible to meet them? All people were sure of this, until the discovery of the continent of Australia occurred; this event radically changed people’s worldview about the possible color of these birds. The author personifies with the “Black Swan” an event that simply should not have happened, but it does. It is anomalous, no one expects to encounter it, the event has enormous power and fate.
Immediately after the release of “Black Swan,” the author brilliantly demonstrated his “non-theory” in practice: against the backdrop of the financial crisis, Nassim Taleb’s company earned (not lost!) half a billion dollars for investors. But his work is not an economics textbook. These are the thoughts of a very extraordinary person about life and how to find your place in it. In a postscript essay he later wrote, “On the Secrets of Sustainability,” Taleb gives a witty rebuke to those orthodox economists who took the anti-teaching he created with hostility.
The first edition of the book appeared in 2007 and was a commercial success. The book spent 36 weeks on the New York Times bestseller list. A second expanded edition appeared in 2010.
The book is part of Taleb's four-volume philosophical essay on uncertainty, entitled Incerto, and covers the following books: Antifragile (2012), The Black Swan (2007-2010), Fooled by Randomness (2001) and Procrustean Bed (2010) -2016).
The collection of Nassim Taleb's aphorisms included in the book is a brilliant quintessence of his original ideas.
Audiobook
Quotes from the book “Black Swan. Under the sign of unpredictability"
- The first main postulate: throws do not depend on each other. The coin has no memory. Just because you get heads or tails doesn't mean you'll have better luck next time. The ability to toss a coin does not come with time. If you introduce a parameter such as memory or throwing skill, this whole Gaussian structure will shake.
- Try not to call those who had no other choice heroes.
- Greatness begins with replacing hatred with polite contempt.
- The tragedy is that most of the phenomena that seem random to you are actually natural - and vice versa, which is even worse.
- When I ask someone to name the three modern technologies that have most changed the world, they usually tell me that they are the computer, the Internet and the laser. All these technical innovations appeared suddenly, unpredictably, were not appreciated at the time of discovery, and even when they began to be used, the attitude towards them remained skeptical for a long time. These were breakthroughs in science. These were Black Swans.
- Some thank you for what you gave them, while others blame you for what you did not give them.
- To evaluate a person, think about the difference between your impressions of your very first and most recent meeting with him.
- We find the most reasons to help those who need us least.
- Art is a one-way conversation with the invisible.
- That is, my advice to you: experiment as much as possible, trying to catch as many Black Swans as possible.
- It is customary to say: “He is wise who knows how to foresee the future.” No, he is truly wise who knows that the distant future is unknown to anyone.
- The success of human endeavors, as a rule, is inversely proportional to the predictability of their results.
- I will say more: scholarship without erudition leads to disaster.
- The three most dangerous addictions: heroin, carbohydrates, monthly salary.
- And the best basis for confidence is extreme politeness and friendliness, which allows you to manipulate people without offending them.
- I really hope that someday scientists and politicians will rediscover what our ancestors always knew: the most valuable thing in human culture is respect.
- The double curse of modern civilization: it forces us to grow old earlier and live longer.
- True love is the complete victory of the particular over the general, the unconditional over the conditional.
- Half of all the suckers in the world don’t understand: what you don’t love, someone else can love (even you yourself can love it later), and vice versa.
- Hate is much harder to fake than love. You've probably heard about fake love, but you've hardly heard about fake hatred.
- Everyone knows that prevention should be given more attention than therapy, but few give thanks for prevention.
- Books read are much less important than books not read.
- For those who predict the future, we are always suckers.
- The player who plays this game does not receive a material reward, he has another currency - hope.
- George Soros, before making a bet, collects data that could disprove his original theory.
- To predict the future, it is necessary to take into account the innovations that will appear there.
- We attribute our successes to our skill and our failures to external events beyond our control. Namely, accidents. We take responsibility for the good, but not for the bad. This allows us to think that we are better than others - no matter what we do.
- An idea begins to seem interesting as soon as you begin to be afraid to carry it to its logical conclusion.
- When a person says, “I'm not that stupid,” it usually means that he is much stupider than he thinks.
- However, the fact remains that you can judge what is wrong, but not what is right. Not all information is equal.
- It takes a lot of intelligence and confidence to admit that what is needed is not really needed.
- The only measure of success for me is how much time you have to kill.
- Karl Marx, a famous dreamer, found that a slave can be controlled much better if he is convinced that he is a hired worker.
- Extinction begins with the replacement of dreams with memories and ends when some memories are replaced by others.
- “Wealth” is a meaningless term, without an absolute and rigid criterion for its measurement; it is better to use the difference value “lack of wealth”: this is the difference between what you have and what you would like to have (at a given point in time)
