Tuesday, July 03, 2007

Review of Nassim Taleb's The Black Swan

The search for patterns and order can be a dangerous trap, distracting us from "the impact of the highly improbable."
I first heard of this guy at Malcolm Gladwell's NYer archive (long piece). His vocation is in finance, but applications can generalize. Be careful of betting against the catastrophic longshot, as personified by his very successful -- for a while -- naked put seller friend, or LTCM.

Update: Here's a mediocre interview where you actually get to see and hear the guy. Charlie Rose doesn't seem to know what questions to ask and Taleb himself isn't exceptionally eloquent. I did learn of the human tendency towards after-the-fact narrative fallacy, whereby we think we've figured out what happened.

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