Summary of THE BLACK SWAN SUMMARY (BY NASSIM TALEB)

A Black Swan event is an outlier with extreme impact that is only explainable after the fact.

The Black Swan problem is the uncertainty of forecasting the future based on past knowledge.

Examples of Black Swans include WW1, 9/11, Black Monday, and the Indian Ocean earthquake.

The turkey analogy illustrates how unexpected events can have extreme impacts.

Black Swans are unknown unknowns, while Grey Swans are known unknowns.

Black Swan blindness leads to errors in confirmation, narrative fallacy, and tunneling.

Mediocristan deals with average matters, while Extremistan introduces Black Swans.

The normal distribution is limited in predicting Black Swan events in Extremistan.

Mandelbrotian randomness can help turn Black Swans into Grey Swans for better decision-making.

Nassim Taleb suggests two approaches for investors: hyper-conservative and hyper-aggressive, or speculative with insurance against losses.

Speakers

— 05:28 — « Stories stick. Statistics, do not. »

— 06:06 — « Its only a Black Swan if youre not informed. This goes for randomness in general. Its nothing else than lack of knowledge. »

— 10:32 — « Humans are prone to believe in linear progression. We think that a certain input will gradually result in a desired output. »

— 12:28 — « It was a Black Swan to them. »