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Recommended by Mike Schavemaker in the [[M5-Strategy]] block.

A “black swan,” Taleb explained, is an event which is
# Hard to predict
# Highly consequential
# Wrongly retro-predicted.

We pretend we know why the big event happened, and so entrench our inability to deal with the next world-changing improbable event. Key take aways for me in the book:
* A for me new but trivial discrimination between 'scalable' and 'non-scalable' professions.
** 'Non-scalable' referring to jobs that scale linearly with the effort you put into it and which require your physical presence (doctor, opera singer, hair dresser, computer programmer)
** 'Scalable' referring to jobs that depend non-linearly on unique competences or sheer luck (stock broker, entrepreneur)
* Be aware of [[narrating]] a story of interpretation to a random phenomena. (See also: [[Consciousness Explained|http://tiddlyweb.dirkjanswagerman.nl/recipes/consciousness/tiddlers.wiki#[[Consciousness%20Explained%5D%5D]] and [[Phantoms in the mind|http://tiddlyweb.dirkjanswagerman.nl/recipes/consciousness/tiddlers.wiki#[[Phantoms%20in%20the%20Brain%3A%20Probing%20the%20Mysteries%20of%20the%20Human%20Mind%5D%5D]] if you are interested to probe further on how our minds are good at making up a consistent story of any event)
* Be aware of different types of random. Taleb sees 'mild randomness' and 'wild randomness' phenomena. With the growth in complexity in our economy today a huge number of phenomena are 'wildly random' and gerenate 'black swans'.  It is much easier to 'predict' the ranges of human length or weigth than it is to predict the sales of a book (or any product).
* This is not simply knowing the standard deviation of your distribution. Taleb's key point is that certain distributions are so random that 'average' and 'standard deviation' have become meaningless.

Interesting recent news on Taleb: http://www.moneycontrol.com/video/economy/current-debt-situation-worse-than-2008-nassim-taleb_457907.html<data>{"Author":"Nassim Nicholas Taleb","ReadingCompleted":true,"Title":"The Black Swan: The Impact of the Highly Improbable","Rating":"***"}</data>
Sun, 12 Jun 2011 19:35:19 GMT
Sun, 12 Jun 2011 19:35:19 GMT