Book Tracker

Overall, it is a philosophy towards life that I take out of this. I think it was his intention to not give too much in the way of precise methods or rules, but instead impart a general philosophy that is directionally correct, and I think he accomplished this well. I hope to be a practictioner of this brand of decision-making.

The core of Taleb's philosophy is centered around the fact that the world tends to follow fat-tailed distributions. What this means is that our assumptions of outcomes being fairly predictable and following linearly returns, are not true. And that instead, improbable outcomes that are impossible to even know the nature of, are far more likely than we give credit to. That is not to say that the shape of the distribution can be known, or even what is included in it (what outcomes are even possible), but that we must act with a level or humility, knowing that there is much we don't know.

This manifests as Black Swans. These are large, improbable, events that come out of nowhere and have an outstanding impact. These can be postivie or negative (9/11, or Facebook succeeding), and have tremendous impact on the future, though they're not usually accounted for in standard models.

What this means on a personal level, is to limit your exposure to things that have a high potential exposure to negative Black Swans--things that appear "safe" just because they are predictable, but actually have a high cost of failure in the event of a Black Swan (which, as mentioned, is probably more likely then people think). And to maximize your exposure to things that have extremely high upside, yet are inherently unpredictable (ie. startups). As well as things that have extremely low risk and are highly predictable (ie. treasuries). Just not medium risk, mostly predictable things, that are actually much more dangerous than what appears on the surface.

The only problem I have about the ideas in this book is that it seems a bit nihilistic. Black Swans, both positive and negative, however unpredictable, always do have a cause. Particularly with positive Black Swans, people have the ability to will them into existence. The future was made by people who spawn in positive Black Swans, not people who wait passively and take advantage of them. But as he says, the forward process of making these things happen is almost impossible to take any repeatable lessons from, so it is forgiveable that being a practitioiner of willing Black Swans into existence is left as an exercise for the reader.

"It's the possibility of having a dream come true that make's life interesting."

They say that you always read a book when you most need to. It's hard to say now, but I think this is especially true here. I would say this is a book about faith more than anything else. Do you have faith that what you are doing is moving you towards your goal? If not, perhaps it is because you don't have a goal; I think most of us fall in this category. But for the rest, perhaps you just need the nudge to start pursuing your dreams.