summary of the black swan by nassim nicholas taleb

We often miss the silent evidence when looking at a sample. You don’t know when the Black Swan is coming. Focus on the process rather than short-term results.

Our brain prefers frequent small wins, but success usually comes from staying consistent, tinkering, trial and error, and sticking at it until you get a Black Swans. Absence of evidence does not mean evidence of absence. However, it only takes one negative instance (head chopped off) to disprove it. Like the Turkey being well-fed every day of December, no matter how much positive information you have, it can never prove the positive theory will hold going forward (if you do, you’re falling prey to naive empiricism and/or confirmation bias). Outliers are extreme and easily skew the data (Bill gates in a group of 100, brings average net worth up massively). “Extremeistan”: Things increase/decrease exponentially without the proportional time/effort. Any outlier isn’t big enough to skew the data (Height - even if someone is extremely tall (e.g 8ft), it doesn’t increase average height much among 100 other people). Things increase/decrease with time/effort. Things that vary exist in 2 separate worlds:ġ. We have to train ourselves to recognise this, and be aware of it. We automatically create stories out of things that happen, so that we can be prepared in future for similar occurrences because it’s less costly than having to remember specifics, but we usually leave out Black Swans in our predictions this way.

We should aim to be open to positive Black Swans and protect ourselves against potential negative Black Swans (without trying to predict the specifics of either). Their existence means that what you don’t know is more important than what you do know. To leave these out in trends as anomalies, is to risk leaving out the very thing that affected the sample most. These Black Swans have a greater impact than the small, regular, everyday occurrences, in spite of their rarity. These can include ideas, inventions, religions, historical events, success stories, failures, life events, opportunities, stock market crashes, wars, etc. Notes:Ī “Black Swan” describes an event that is an (1) Unpredictable outlier, which (2) creates an extreme impact, and which (3) human nature makes us concoct explanations for, after the fact. We should aim to be robust against the negative Black Swans, but be open to the positive Black Swans, accepting that we can’t predict the specifics of either of these. The impact of these Black Swans outweighs the impact of the steady, predictable trends, but they aren’t included in our usual predictive models. The Black Swan - Nassim Nicholas Taleb 3-Sentence Summary:Ī “Black Swan” describes an event that is an outlier, which has an extreme impact, and is only explainable after the fact.

Summary of the black swan by nassim nicholas taleb