Nassim Nicholas Taleb: Impact of the Highly Improbable
May 19, 2010 51:32
Nassim Taleb professor, writer
Nassim Nicholas Taleb, renowned expert on risk and randomness, discusses The Black Swan: The Impact of the Highly Improbable. This bestselling book is now out in paperback with a new essay, “On Robustness and Fragility.”
A black swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. The astonishing success of Google was a black swan; so was 9/11. For Nassim Nicholas Taleb, black swans underlie almost everything about our world, from the rise of religions to events in our own personal lives.
Why do we not acknowledge the phenomenon of black swans until after they occur? Part of the answer, according to Taleb, is that humans are hardwired to learn specifics when they should be focused on generalities. We concentrate on things we already know and time and time again fail to take into consideration what we don’t know. We are, therefore, unable to truly estimate opportunities, too vulnerable to the impulse to simplify, narrate, and categorize, and not open enough to rewarding those who can imagine the “impossible.”
This lecture contains strong language.
This was a nice talk.
I realize that there is a recursive issue occurring.
That Dr Taleb himself maybe ironically the greatest source of uncertainty.
I cannot tell , if his ideas being exposed to the world is a Good or Bad Black Swan.
Interesting point. I know a lot of investment types follow him closely. When he talks about a ‘failed auction’ or ‘getting out of treasuries’ I sometimes wonder if there isn’t the possibility his remarks will tip the scale. On the other hand, his ideas are powerful enough to reshape society altogether, in which I case I would agree, he would be the Black Swan.
Thanks for stopping by and for sharing your thoughts.
JohnH