by Nassim Nicholas Taleb
This is a great narrative about the narrative fallacy and other conventions of thought prone to Gaussian distribution representation of a non-linear world. Taleb takes the book debunking why we risk and future theory do not conform to modern day predictions, as if any prediction of the future would hold sway in chaos and randomness. Because nature recurs in geometric patterns of nonlinearity the term factal describes this non-gaussian pattern. Just as a Black Swan catches an observer off guard who previously had only seen white swans, one cannot preclude the future will be full of the pasts observations.
One ought to be aggressive in exposing oneself to the positive upside of these huge nonlinear payoffs of a positive black swan (usually by the fraction of ones wealth one can afford to lose, as these are rare birds, or the fraction of likely success or appearance of the Black Swan). The lottery does not qualify because it is actually a very calculated and limited reward with high odds stacked against the player compared to the reward.
Negative Black Swans are outside gaussian prediction (see for example the casino going bankrupt because of a poorly reporting accountant or employee, or lawsuit due to construction, etc. e.g. the irony of prediction and control is subject to Black Swans). Risk calculations and economists have significant blind spots as the world becomes more complexingly interrelated exposing us to unforeseen consequences and larger Black Swans.
It was a good book. Experts are not experts who deal with a moving future (financial investors, economists, politicians, etc.)
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