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    The Black Swan The Impact of The Highly

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    Bekele Guta Gemene
    This document provides a summary of the book "The Black Swan" by Nassim Nicholas Taleb. It discusses how the book explains that unpredictable outlier events with significant consequences, which Taleb calls "Black Swan" events, are far more influential than regular or predictable events. While these Black Swan events are improbable, they are extremely impactful and explain much of what happens in the world. The document provides examples of the key ideas and arguments in Taleb's book.

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    The Black Swan The Impact of The Highly

    Uploaded by

    Bekele Guta Gemene
    212 views4 pages
    This document provides a summary of the book "The Black Swan" by Nassim Nicholas Taleb. It discusses how the book explains that unpredictable outlier events with significant consequences, which Taleb calls "Black Swan" events, are far more influential than regular or predictable events. While these Black Swan events are improbable, they are extremely impactful and explain much of what happens in the world. The document provides examples of the key ideas and arguments in Taleb's book.

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    This document provides a summary of the book "The Black Swan" by Nassim Nicholas Taleb. It discusses how the book explains that unpredictable outlier events with significant consequences, which Taleb calls "Black Swan" events, are far more influential than regular or predictable events. While these Black Swan events are improbable, they are extremely impactful and explain much of what happens in the world. The document provides examples of the key ideas and arguments in Taleb's book.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    212 views4 pages

    The Black Swan The Impact of The Highly

    Uploaded by

    Bekele Guta Gemene
    This document provides a summary of the book "The Black Swan" by Nassim Nicholas Taleb. It discusses how the book explains that unpredictable outlier events with significant consequences, which Taleb calls "Black Swan" events, are far more influential than regular or predictable events. While these Black Swan events are improbable, they are extremely impactful and explain much of what happens in the world. The document provides examples of the key ideas and arguments in Taleb's book.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    The key takeaways are that rare and unpredictable events called 'black swan events' have major consequences, but people are often blind to them. The book also discusses flaws with common statistical models and how the world is governed more by randomness than predictability.

    A black swan event is an unpredictable event that is deemed improbable yet has massive consequences.

    The author argues that half the stock market returns over 50 years were due to just 10 days, and that correlation and regression coefficients are unstable and don't convey much information when variables are not stationary.

    The Black Swan: The Impact Of The

    Highly Improbable
    PDF
    A black swan is an event, positive or negative, that is deemed improbable yet causes massive
    consequences. In this groundbreaking and prophetic book, Taleb shows in a playful way that Black
    Swan events explain almost everything about our world, and yet we—especially the experts—are
    blind to them. In this second edition, Taleb has added a new essay, On Robustness and Fragility,
    which offers tools to navigate and exploit a Black Swan world. --This text refers to the Hardcover
    edition.

    Audible Audio Edition


    Listening Length: 14 hours and 20 minutes
    Program Type: Audiobook
    Version: Unabridged
    Publisher: Recorded Books
    Audible.com Release Date: September 10, 2007
    Language: English
    ASIN: B000VXBVN6
    Best Sellers Rank: #2 in Books > Computers & Technology > Computer Science > Information
    Theory #4 in Books > Business & Money > Finance > Corporate Finance #5 in Books >
    Politics & Social Sciences > Philosophy > Epistemology

    Starting with the good (chapters 15 - 17), within chapter 15 Taleb explains where the Bell curve
    works and where it does not. The Bell curve captures well variables that don't deviate much from
    the mean. Otherwise, it does not work. Taleb suggests we often fool ourselves in believing that
    correlation, regression coefficients, or standard deviation convey much information. This is because
    those coefficients are unstable (and can flip sign when possible) depending on the time selected.
    This is because the underlying variables are often not stationary enough for these coefficients to be
    stable.Chapter 16 is excellent as an introduction to Mandelbrot's fractal geometry as an alternative
    to Gaussian based investment theory. He supports well that these mathematical tools do capture
    randomness (of non-stationary variables) far better than the Normal distribution. However, he
    admits that Mandelbrotian models are not predictive. When looking at the same data set, he and
    numerous colleagues each came up with different underlying parameters to build fractal-like
    models. And a small difference in such parameters makes a huge difference in outcome. That's why
    you will not hear much of fractal geometry within the quantitative financial community. Nevertheless,
    this is a fascinating subject that deserves further exploration. For this purpose, I recommend
    Mandelbrot's The Misbehavior of MarketsWithin Chapter 17, Taleb further elaborates on the flaws of
    the Normal distribution. He underlines that half of the return of the stock market over the past 50
    years was associated with just 10 days with the greatest daily change.

    If, as Socrates would have it, the only true knowledge is knowledge of one's own ignorance, then
    Nassim Nicholas Taleb is the world's greatest living teacher. In The Black Swan, Taleb's second
    book for laypeople, he gives a full treatment to concepts briefly explored in his first book "Fooled by
    Randomness." The Black Swan is basically a sequel to that book, but much more focused, detailed
    and scholarly. This is a book of serious philosophy that reads like a stand-up comedy routine. (Think
    Larry David...)The Black Swan is probably the strongest statement of enlightened empiricism since
    Ernst Mach refused to acknowledge the existence of the atom. Of course, in theory, everyone today
    is supposed to be an empiricist - all right-thinking intellectuals claim to base their views solely on
    positive scientific observation. But very few sincerely confront the implications of rigorous
    empiricism. Specifically, few confront "the problem of induction," illustrated here by the story of the
    black swan.Briefly: observing an event once does not predict it will occur again in the future. This
    remains true regardless of the number of observations one adds to the pile. Or, as Taleb,
    recapitulating David Hume, has it: the observation of even a million white swans does not justify the
    statement "all swans are white." There is no way to know that somewhere out there a black swan is
    not hiding, disproving the rule and nullifying our "knowledge" of swans. The problem of induction
    tells us that we cannot really learn from our experiences. It makes knowledge very problematic, if
    not impossible. And yet, humans do behave -almost without exception- as though they believe that
    experience teaches us lessons. This is forgivable; there is no better path to knowledge.

    This is an entertaining and enlightening book, and fairly easy to read. It has an important message
    regarding how the world works; that the world is governed not by the predictable and the average,
    but by the random, the unknownable, the unpredictable -- big events or discoveries or unusual
    people that have big consequences. Change comes not uniformly but in unpredictable spurts.
    These are the Black Swans of the title: completedly unexpected and rare events or novel ideas or
    technologies that have a huge impact on the world. Indeed, Taleb argues that history itself is
    primarly driven by these Black Swans.It is convincing argument, entertainingly presented with plenty
    of sarcasm, and indeed, anger, by Taleb. For example he rails against the academic community,
    economists (including specific names), and Nobel Prize committee. Considerable numbers of his
    arguments "ring true" to me, that is my experience in life confirms that they are more accurate than
    the traditional approach. Like any important work, 90% of what is in the book is not original; that
    does not make it less important. Taleb's contribution is in integrating the material together, and
    showing how these different ideas are tied to the Black Swan.The themes include: winner-take-all
    phenonomen, numerous effects of randomness on the world, the invalidity of the Gaussian Bell
    Curve to most things in world, concepts of scalablity, numerous instabilities in the world, especially
    the modern world where information travels so quickly, the fallacies about people's inability to
    predict the future.

    The Black Swan: Second Edition: The Impact of the Highly Improbable: With a new section: "On
    Robustness and Fragility" (Incerto) The Black Swan: The Impact of the Highly Improbable by Taleb,
    Nassim Nicholas (1st (first) Edition) [Hardcover(2007)] The Black Swan: The Impact of the Highly
    Improbable The Black Swan: The Impact of the Highly Improbable, by Nassim Nicholas Taleb | Key
    Takeaways, Analysis & Review The Black Swan: Second Edition: The Impact of the Highly
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