SELECT DISTINCT (Idea) FROM NassimTaleb.dbo.BlackSwan

 

  1. People are crap at making predictions.
  2. People are crap at knowing they are crap at making predictions.
  3. One of the main reasons that people are crap at making predictions is that they are using thought and mathematical models that rely on moderate / capped input variation, as can be encountered in the physical world (e.g. the variation in the height property in a group of individuals). However, when the input varies wildly (e.g. distribution of wealth) there are extreme edge cases.
  4. Another reason for the crappy prediction ability is the existence of “black swans”, events that are not foreseen and cause massive effect.
  5. Some try to confront the black swan threat by brainstorming and allowing for extreme cases in their models. This will not work, as the black swans are by definition the events not foreseen.
  6. While the black swans cannot be foreseen, their very existence can be, and the wise will hedge herself against the effect, even while not predicting the specific cause.
  7. Academics and theoreticians believe that they are superior to practitioners. They are wrong, since practitioners are way better.
  8. The author is a practitioner.
  9. Ignoring the above, the financial world and the Nobel prize committee tend to prefer theoreticians, staking it all on models that crumble in the face of real world events (at great cost).
  10. While not providing a fluent reading experience, there are several ideas I will be taking with me. All in all, I’m happy that I invested the time reading this book.