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Switch to Forum Live View Faustus5, Have you read The Black Swan by Nassim Taleb?
3 years ago  ::  Aug 11, 2011 - 7:24PM #1
stardustpilgrim
Posts: 5,280
Just curious, Faustus5, have you read The Black Swan?

I remember browsing it when it first came out (2007), but it didn't seem to be my "cup of tea". Last weekend, as Borders is going out of business, I expanded my normal "paths", chanced upon it again (second addition, some added material, 2010, paperback).

I'm only up to page 64 so far, but it's the most interesting and informative book I've read in years, I would say riveting (I'm sure I'll finish it this weekend). Nassim Taleb is the smartest dude I've run into in years (and, my kind of guy, he only wears ties to funerals.......)

(Of course, open to anybody........).........

stardustpilgrim       
The purpose of words is to convey ideas. When the ideas are grasped, the words are forgotten.
Where can I find a man who has forgotten words? He is the one I would like to talk to.
The Way of Chuang Tzu by Thomas Merton

A map is not the territory.                                                                 Alfred Korzybski

God is that function in the world by reason of which our purposes are directed to ends which in our own consciousness are impartial as to our own interests. He is that element in life in virtue of which judgment stretches beyond facts of existence to values of existence.      Alfred North Whitehead
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3 years ago  ::  Aug 12, 2011 - 7:53PM #2
stardustpilgrim
Posts: 5,280

I'm up to page 121, still very interesting.


Taleb calls himself a skeptic and an empiricist (pg 45), which he says is a rare bird (no pun intended), they don't usually come together.


Taleb began exploring the problem of the black swan in his youth, growing up in Lebanon (which he still prefers to call Levantine). We fail to see black swans because of the problem of inductive reasoning, drawing general conclusions from particular events. He gives the example (discussed by Bertrand Russell) of the turkey. What does the turkey conclude from being fed day after day by its human caretakers? The turkey concludes that the kind and friendly humans are looking out for his best interests......until the Wednesday before Thanksgiving, which becomes, for the turkey, a Black Swan (an unexpected highly improbable consequential event (pg 18)........most swans are white, which doesn't mean there are no black swans).


To cut to the chase, with the hope of some day becoming a philosopher, Taleb left Lebanon as a teenager, and from his study of randomness, found himself at Wharton School studying business. He (later) went to work for Credit Suisse First Boston. He did not as yet know the term black swan, but was studying the phenomenon, and developing means to protect himself from just such an occurrence. From decades of study of the black swan phenomenon, Taleb became a "quant", a (continuing) student with the profession of "quantative finance". He also put himself on the line by engaging in speculative trading. He says in a footnote: I specialized in complicated financial instruments called "derivatives" (which he got a doctorate in, pg 20).


Then October 19, 1987 happened, the worst stock market drop in (modern) history (pg 18). Taleb says that afternoon he slowly walked the streets of Manhattan headed home, in a bewildered state.


On that day, his study of the black swan proved out, he had been vindicated intellectually. He said he went home and slept for 12 hours straight. And he was thoroughly rewarded by First Boston for his efforts. He received a bonus large enough to be "free from slavery", not so large so as to be "spoiled-rich", but large enough that he would be in a position to change professions without regard to financial compensation (pg 20).


sdp


 


 


 

The purpose of words is to convey ideas. When the ideas are grasped, the words are forgotten.
Where can I find a man who has forgotten words? He is the one I would like to talk to.
The Way of Chuang Tzu by Thomas Merton

A map is not the territory.                                                                 Alfred Korzybski

God is that function in the world by reason of which our purposes are directed to ends which in our own consciousness are impartial as to our own interests. He is that element in life in virtue of which judgment stretches beyond facts of existence to values of existence.      Alfred North Whitehead
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3 years ago  ::  Aug 13, 2011 - 10:00AM #3
Faustus5
Posts: 2,022

Nope, never even heard of it.  After I'm done with the two Alan Furst spy novels I just bought, my next non-fiction project is going to be The Faith Instinct, a book on the evolution of religion that a scientist friend of mine keeps pestering me to read.  And then after that I have an appointment to re-read Tinker, Tailor, Soldier, Spy in preparation for the upcoming movie adaptation.  Don't know when I'd be around to checking this out, but thanks for the tip.

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3 years ago  ::  Aug 13, 2011 - 10:15AM #4
stardustpilgrim
Posts: 5,280

Aug 13, 2011 -- 10:00AM, Faustus5 wrote:


Nope, never even heard of it.  After I'm done with the two Alan Furst spy novels I just bought, my next non-fiction project is going to be The Faith Instinct, a book on the evolution of religion that a scientist friend of mine keeps pestering me to read.  And then after that I have an appointment to re-read Tinker, Tailor, Soldier, Spy in preparation for the upcoming movie adaptation.  Don't know when I'd be around to checking this out, but thanks for the tip.




Oh........I liked the character Jim Prideaux. If I recall correctly (from many years ago) while in hiding, teaching at a school, a young student described Prideaux, He seemed to lack a certain sense of gravity, so that at any time he might slide off the surface of the earth.


Always remembered that......as it..is..me.........


Didn't know about the movie, look forward to it, thanks.......(saw the GB TV adaptation, many years ago).


.........and, BTW, I'd say you are (also), a skeptical empircist.....which is why I thought of you...


And another BTW, Taleb says that Hume wasn't (really) a skeptical empiricist, as he didn't live his philosophy.


sdp

The purpose of words is to convey ideas. When the ideas are grasped, the words are forgotten.
Where can I find a man who has forgotten words? He is the one I would like to talk to.
The Way of Chuang Tzu by Thomas Merton

A map is not the territory.                                                                 Alfred Korzybski

God is that function in the world by reason of which our purposes are directed to ends which in our own consciousness are impartial as to our own interests. He is that element in life in virtue of which judgment stretches beyond facts of existence to values of existence.      Alfred North Whitehead
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3 years ago  ::  Aug 18, 2011 - 10:00PM #5
stardustpilgrim
Posts: 5,280

So, after 158 peeks, nobody has read The Black Swan?


sdp

The purpose of words is to convey ideas. When the ideas are grasped, the words are forgotten.
Where can I find a man who has forgotten words? He is the one I would like to talk to.
The Way of Chuang Tzu by Thomas Merton

A map is not the territory.                                                                 Alfred Korzybski

God is that function in the world by reason of which our purposes are directed to ends which in our own consciousness are impartial as to our own interests. He is that element in life in virtue of which judgment stretches beyond facts of existence to values of existence.      Alfred North Whitehead
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3 years ago  ::  Aug 19, 2011 - 6:55PM #6
koala972
Posts: 865

Aug 18, 2011 -- 10:00PM, stardustpilgrim wrote:


So, after 158 peeks, nobody has read The Black Swan?


sdp





no but almost my every waking moment I'm afraid of the possibility of black swan which might be lying in wait just around the next corner...  does that count?


Honestly I've wished so many times I could just say that since I've never seen a black swan I won't ever see one but that seems to miss the point...  And I also have this nagging notion that I might actually invite a black swan to swing by if I put up that kind of fight so I outta luck...


repeatability is desirable if you wanna learn stuff in the manner we have become accustomed to, but some things jsut aren't repeatable.  There is some math that covers singularities somewhere...  I was exposed to it in calculus or some place...  I think miracles would normally be singular in nature to keep us from learning about them the 'easy' way and you see what a field day materialists have with that, since they aren't repeatable they can't exist?  hehehe god will let us confuse ourselves to death by desiring our own wants if that is what we want...


 

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3 years ago  ::  Aug 19, 2011 - 7:24PM #7
stardustpilgrim
Posts: 5,280

koala ... there are positive black swans as well as negative black swans........


I have finished the book, except for about 7 pages (skipped...which I'll go back and read). Reading the 2nd edition is a must, as there are 72 additional pages. .......And, this is the only book I have ever read where I read all the footnotes. .... I'll post a summary some time this weekend..... My respect for Taleb has not diminished, an extraordinary thinker...and, I like his >style< ...........


sdp

The purpose of words is to convey ideas. When the ideas are grasped, the words are forgotten.
Where can I find a man who has forgotten words? He is the one I would like to talk to.
The Way of Chuang Tzu by Thomas Merton

A map is not the territory.                                                                 Alfred Korzybski

God is that function in the world by reason of which our purposes are directed to ends which in our own consciousness are impartial as to our own interests. He is that element in life in virtue of which judgment stretches beyond facts of existence to values of existence.      Alfred North Whitehead
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3 years ago  ::  Aug 19, 2011 - 9:13PM #8
stardustpilgrim
Posts: 5,280

First of all, I don't know that I can do justice to the book, so whatever I post, don't let it negatively sway you, check out the book for yourself (literally, either get a library copy or browse it in a bookstore).


To see a (literal) black swan is a rare event, hence the name.


The Black Swan is an event (1) that lies outside the realm of our regular expectations, because nothing in the past can point to its expectation. (2) It carries an extreme impact. (3) Human nature makes us concoct explanations, after the fact, seeming to explain its predictability.


What's a Black Swan for most is not a Black Swan for all. Thanksgiving was a BS for the turkey, not for the butcher. 9-11 was a Black Swan for us, not for the highjackers.


Taleb says that a small number of Black Swans explain almost everything in our world, from history to our own personal world.


Black Swan logic makes what we don't know greatly more significant that what we do know.


We can't measure uncertainty, but go about our lives acting as if it doesn't exist. The rare event = uncertainty. 


Taleb began thinking of the concept of the Black Swan (even though he didn't yet have that name for it) from early youth growning up in Lebanon during a time of war. Much of the time all he could do was sit in his basement, and read. One significant book was a journal kept during WWII. Taleb realized that there was a difference between an account written thusly, and an account of history written after the fact. We selectively edit history to conform to subsequent (known) events.


sdp    


 

The purpose of words is to convey ideas. When the ideas are grasped, the words are forgotten.
Where can I find a man who has forgotten words? He is the one I would like to talk to.
The Way of Chuang Tzu by Thomas Merton

A map is not the territory.                                                                 Alfred Korzybski

God is that function in the world by reason of which our purposes are directed to ends which in our own consciousness are impartial as to our own interests. He is that element in life in virtue of which judgment stretches beyond facts of existence to values of existence.      Alfred North Whitehead
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3 years ago  ::  Aug 19, 2011 - 10:23PM #9
stardustpilgrim
Posts: 5,280

Taleb says we get into trouble through what he calls Platonicity, our tendency to mistake the map for the territory, to rely on ideal forms that don't apply when life gets messy. "The Platonic fold is the explosive boundary where the Platonic mindset enters in contact with messy reality, where the gap between what you know and what you think you know becomes dangerously wide. It is here that the Black Swan is produced". (pg xxx)


Taleb describes himself as a skeptical empiricist, one who focuses on what he doesn't know rather than taking his knowledge too seriously, and not treating his knowledge as a treasure (we tend to look at what confirms our knowledge, not our ignorance).


Taleb was about 15 when war broke out, transformed his town from heaven to hell (pg 7). The book that influenced him most was William Shirer's Berlin Diary: The Journal of a Foreign Correspondent, 1934-1941. He says this book taught him the most about philosophy, theoretical history, and science, because from it he learned the difference between forward and backward processes. (pg 13) He says Shirer's journal turned out to be a training program in the dynamics of uncertainty.


NNT left Lebanon as a teenager and ended up at Wharton (business) School, became obsessed with his subject, "the highly improbable consequental event" (the still as yet un-named black swan). Four & 1/2 years after graduating Wharton, October 19, 1987, the stock market crash, happened (related in an earlier post).   


Taleb describes two realms, one where Black Swans don't exist, Mediocristan, and one where they come from, Extremistan, and two vastly different types of randomness. What put him on this road? A second year student at Wharton advised him to go into a profession that was scalable, one where you are not paid by the hour and are thus subject to the limitations of your labor. For example, if you own a restaurant, your income cannot be scaled. You are limited to the number of chairs in your restaurant and how many people you can serve in a day.


JK Rowling is an example of scalable income. She made a certain effort writing the Harry Potter books, which could then be copied and sold to millions of readers. (However, NNT says that the advice was not good advice. For example, there are thousands of actors who work menial jobs while looking for the big break. Most never get the big break, but one blockbuster movie could result in scalable income, which takes luck). 


tbc sdp  

The purpose of words is to convey ideas. When the ideas are grasped, the words are forgotten.
Where can I find a man who has forgotten words? He is the one I would like to talk to.
The Way of Chuang Tzu by Thomas Merton

A map is not the territory.                                                                 Alfred Korzybski

God is that function in the world by reason of which our purposes are directed to ends which in our own consciousness are impartial as to our own interests. He is that element in life in virtue of which judgment stretches beyond facts of existence to values of existence.      Alfred North Whitehead
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3 years ago  ::  Aug 19, 2011 - 11:27PM #10
stardustpilgrim
Posts: 5,280

The scalable/nonscalable distinction taught Taleb the difference betweem Mediocristan and Extermistan, between two varities of uncertainties, two types of randomness (pg 32). In the Mediocristan world, the law is: when your sample is large, no single instance will significantly change the aggregate or the total. He gives the example of randomly selecting a thousand people, and adding their weight. If you add the heaviest person on the planet to the total, it will not significantly alter the total.


However, if you add up the net worth of the thousand people, and then add the net worth of Bill Gates, you are going to significantly alter the total, maybe by a factor of 99.9%. Welcome to the world of Extermistan. (If we were to make the same comparison, of weight, the added heaviest person in the world would have to weigh fifty million pounds).


So, the rule in Extermistan is: "inequalites are such that one single observation can disportionately impact the aggregate, or the total." (pg 33) 


NNT notes that almost all social matters are from Extermistan. NNT says that war used to belong to Mediocristan, essentially one bullet kills one person. However, with modern technology, war has entered Extermistan, push a button and you can kill thousands.


If you're a dentist, your income is the Mediocristan world, you can see only so many patients in a day.


However, "If you are subject to Extermistan-based speculation, you can gain or lose a fortune in a single minute". (pg 35)


Taleb then shares the story of how inductive reasoning can fail us, the already related story of the turkey.


.......................


Taleb shares that black swans can appear in many different areas of life, but they can be devastating in economics. I already related the story of how NNT protected himself and his company in the stock market crash of Oct. 19, 1987. His goal was how not to be a sucker.


NNT says that most economists don't understand that they are using Mediocristan models in an Extermistan world. One of their major tools is the Gaussian bell curve. Under normal "average" conditions, they can get by. But reality is more complicated than their models allow for. They do not understand that their models do not allow for Black Swans.....and for the most part, economists have not learned anything from the crisis of 2007 leading up to Sept. 2008, when the US gov. had to save US banks, the US economy.


..........................


One of the most interesting and informative books I've read in years. I'll probably add some more tomorrow, but I've shared the basic idea. Taleb shares what he found about the black swan in history, especially some of the Stoic philosophers. ........ I've ordered his first book, Fooled by Randomness, and look forward to reading it. One smart dude..........


sdp   

The purpose of words is to convey ideas. When the ideas are grasped, the words are forgotten.
Where can I find a man who has forgotten words? He is the one I would like to talk to.
The Way of Chuang Tzu by Thomas Merton

A map is not the territory.                                                                 Alfred Korzybski

God is that function in the world by reason of which our purposes are directed to ends which in our own consciousness are impartial as to our own interests. He is that element in life in virtue of which judgment stretches beyond facts of existence to values of existence.      Alfred North Whitehead
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