52 Books a Year: #3 - The Black Swan

Posted by Brian Fri, 03 Jul 2009 17:09:19 GMT

The Black Swan: The Impact of the Highly Improbable
By Nassim Nicholas Taleb


I won’t dig into the details of Taleb’s argument in this review. If you want to investigate those details it won’t take you too long on Google, as this book has sparked a fairly large amount of discussion, some of it quite heated. His basic argument is that the gaussian models used to predict risk in financial markets are applied inappropriately to non-gaussian events. Risk is not a bell curve, but the convenience of pretending that it is has encouraged financial institutions to expose themselves to far more risk than they think. The delicious part of this is that the book was released in April 2007. Needless to say, Mr. Taleb has received quite a bit of attention since the financial markets imploded after the housing bubble. And yes, he did make a large sum of money in the crash by applying his methods.

I enjoyed the writing style, but it will off-putting for many. Taleb is aggressive in articulating his low opinion of most individuals in the financial system (as well as the French for some reason that is never explained). He also introduced me to two concepts that amused me greatly: “fuck you money” and the anti-resume. “Fuck you money” is a large some of money that allows you to maintain your desired lifestyle without employment or assistance. Basically, you can quit your job or turn down insulting offers with a big Fuck You with no worries about how it will affect your financial well-being. An anti-resume is simply a resume that states what you cannot or will not do. I’m considering using one when I search for my next job.

Overall, this book is definitely worth reading. You may not agree with what Taleb has to say or how he says it, but it will at least get you to think about it.


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