Black Swan. Under the sign of unpredictability read online. Under the sign of unpredictability (collection) Reading the black swan by Nassim Talib

Nassim Nicholas Taleb - economist, trader and writer. Talleb is known as a person who studies the effects of random events on the economy and stock trading, as well as the mechanisms of trading derivatives. Thanks to his predictions, Taleb earned several million dollars during the financial crisis in 2007-2008.

Black Swan - Book Review

A person very often interprets various events that happen to him incorrectly. We make incorrect conclusions, build incorrect cause-and-effect relationships, and love to simplify everything. And at this time, history is preparing us to meet the Black Swans...

Black swans and historical processes

Who are these Black Swans? This is the name for events that:

– anomalous (nothing predicted them in the past);
– capable of influencing;
– a person comes up with explanations for them, after which events become predictable.

History moves forward in leaps and bounds, although people are still mostly convinced that changes occur gradually. Roughly speaking, when studying historical processes, a person engages in self-deception. The problem is not in the event itself and its nature, but in how we perceive it.

Two types of professions and accidents

Random variables can be different. Like professions that can be scalable and non-scalable. The differences between scalability and nonscalability lead to two types of randomness. Usually events have little impact on the overall outcome of the case. If the sample population is large, a single event will not have much effect on the total.

In the first case, predictability, routine and collectivity rule the roost, and in the second - unpredictability, randomness and singularity.

The problem of induction

How to predict future events based on past events? You can observe a specific variable for as long as you like and make a prediction based on the data obtained. But suddenly one fine day something that could not be expected will happen - a Black Swan will fly in! And when such an event occurs, people begin to make new forecasts in the same area where this Swan appeared. And thus they make a mistake because they ignore all other areas. Black swans will continue to be beyond the bounds of understanding as long as we are confident that past observations are indicative of the future.

And to put it bluntly, only suckers encounter the Black Swan. The problem depends on the person's level of expectation. If you believe that you will never encounter a Swan, you can automatically become a sucker. Here are some more common mistakes of humanity:

– people prefer to judge the invisible by pulling out fragments from the picture of what they saw;
– people think that the probability of Black Swans occurring is certain;
– people pay attention to the too narrow circle of Swans, not wanting to expand it, etc.

The Importance of Denial

We very often consider the two statements to be interchangeable, although this is far from the case. We also get good grades at school, but in everyday life we ​​behave, to put it mildly, not like an A+. All human reactions depend on context. Therefore, logic problems can sometimes be solved in class in two minutes, but in everyday life it will take much more time.

This process has two directions:
– when is it better to learn in practice than in theory;
– when is it better to learn the theory and then practice.

He begins to adjust the facts to the theory known to man, obtaining evidence. Speaking about his merits, he will list successful things without naming those that were not completed. But supporting facts are not always evidence. You can get closer to the truth if you focus on negative examples rather than confirming ones. For this reason, when making a claim, it is important to look for data that will demonstrate that it is wrong. People are generally used to constantly deceiving themselves!

Narrative Distortion

Another human problem is the distortion of narrative (knowledge). We like to simplify and reduce everything to a minimum, preferring condensed stories instead of the raw truth.

Human mental activity is divided into two types:
– empirical;
– rationalistic.

When we think we are thinking rationally, but in fact we are thinking empirically, errors occur. A person cannot be aware of his reactions, and the empirical system acts independently, without his knowledge. Misunderstanding of Black Swans occurs due to the functioning of the empirical system (narrative), and emotions predict the wrong probability of events.

Linearity and nonlinearity

A person’s attention is always concentrated not on the important, but on the tangible. We perceive the world linearly, while it is far from linear. Linear relationships are very simple: the more money invested in the bank, the greater the profit. With nonlinear ones, everything is more complicated: I drank a bottle of soda and enjoyed it, but a canister of water is unlikely to be perceived so positively.

In our world, the result will never be distributed evenly - after all, there are Black Swans. Usually no one expects their appearance, but what happens if you purposefully wait for some event? When chance becomes meaning, a person lives in hope. But the appearance of the Swan causes a disproportion in negative and positive consequences. You can wait and still not wait. Remember: if you yourself are in pursuit of Black Swans, get support - find allies. Going it alone is unlikely to lead to success.

As a result, all people can be divided into two types:
– some have no idea that trouble will happen soon;
– others prepare for events that no one expects.

Hidden Evidence

Hidden evidence prevents a person from understanding that sometimes events have no obvious causes that we constantly create. Any “because” cannot be confirmed by history. It must go through experimental confirmation!

Game bug

A person whose thinking is limited by boundaries can be called a nerd. Non-botanists understand life much more and easily find a way out of difficult situations. People with “clogged” minds can give birth to Black Swans - this is a very serious problem. The uncertainties we face in exams or games and those that exist in real life are completely different. This phenomenon is called a gaming error.
In reality, none of us are aware of all the odds. Moreover, people very often underestimate the role of chance. We are accustomed to relying on the theory of probability and use gambling as an example. But the factors that can actually influence the outcome of the case have nothing to do with games and are unpredictable.

Etcforecasting and types of specialists

What else prevents people from drawing the right conclusions and assessing the world as it is:
– arrogance in assessing one’s knowledge;
– a manifestation of this arrogance in forecasting.

People get used to their opinions and change them with great difficulty. Even if some evidence blows one man's theory to smithereens, he will still believe himself. Understanding is complicated by information, and often the more there is, the more obvious the harm. This can be judged by looking at the example of specialists.

Specialists can be divided into two types:
– self-confident in the presence of some knowledge;
– arrogant and incompetent.

Forecast and innovations

The most important historical discoveries are usually unpredictable. In order for the forecast of the future to be correct, it is necessary to take into account the emergence of various innovations in this future. If you foresee these innovations, then it turns out that you are their discoverer. But it is extremely difficult to imagine inventions that do not exist, otherwise they would already exist.
Social forecasts also cannot be trusted, because it is hardly possible to know with certainty how different people will act. What reasons make people plan? Consciousness prompts us to do this. And in general, we always prefer to turn to experts, even if a priori they cannot be in this field.

Experience of the past

A person who is accustomed to being skeptical about his knowledge can be called an epistemocrat. He constantly thinks and is not afraid to say that he doesn’t know something. If the world were ruled by such people... A pure utopia! Although there are things that you don’t need to doubt.
It is difficult for people to imagine that the past and future are asymmetrical. Such ignorance does not allow us to grasp the analogy between the fact that the future is the past, and the past is a somewhat earlier past. We believe that tomorrow will be approximately the same as yesterday and we see no difference between past forecasts and how everything turned out in reality.
The forecast turns out to be incorrect because people do not want to dive into the past, analyze their condition and actions already committed. Our consciousness is blocked, we are blind, and that is why we rarely turn to previous experience.
In theory, every event has the property of randomness, but in practice this is incomplete information, our ignorance.

To minimize the consequences of the influence of Black Swans, you need to think outside the box. Knowledge must be turned into action, and one must think about what it is worth. Swans will attack only when they are allowed to do so. But if a person creates something himself, he manages it himself. This should be your goal! By the way, your birth is also to some extent an accident, which means you yourself are a Black Swan!

Nassim Nicholas Taleb

The Impact of the Highly Improbable

Nassim Nicholas Taleb

Black Swan

Under the sign of unpredictability

Prologue. About bird plumage9

Part I Anti-library of Umberto Eco,

or About searching for confirmations28

Chapter i. Years of teaching as an empiricist-skeptic31

Chapter 2. Eugenia's Black Swan59

Chapter h. Speculator and prostitute63

Chapter 4. A thousand and one days,

or How not to be a sucker81

Chapter 5. Proof-smacking proof!100

Chapter 6: Narrative Distortion117

Chapter 7. Life on the Threshold of Hope153

Chapter 8. Fortune's Favorite Giacomo Casanova:

problem of hidden evidence174

Chapter 9. Game error,

or the uncertainty of the "nerd"207

Part II. It is not given to us to foresee225

Chapter 10. Predictive paradox228

Chapter 11. Discovery based on bird droppings271

Chapter 12. Epistemocracy, dream310

Chapter 13. Painter Apelles,

or How to live in conditions of unpredictability 326

Part III. Gray swans of Extremistan 343

Chapter 14. From Mediocristan to Extremestan and back 345

Chapter 15. Normal distribution curve,

great intellectual deception 366

Chapter 16. Aesthetics of chance 402

Chapter 17. Locke's Madmen,

or "Gaussian curves" are out of place 432

Chapter 18. "Linden" uncertainty 449

Part IV, final 459

Chapter 19. The middle is half, or How to make ends meet

ends with the Black Swan 459

End 464

Epilogue. White swans of Eugenia 466

Dictionary 469

Bibliography 474

Dedicated to Benoit Mandelbrot, a Greek among the Romans

PROLOGUE. About bird plumage

About bird plumage

D O After the discovery of Australia, the inhabitants of the Old World were convinced that all swans were white. Their unshakable confidence was fully confirmed by experience. The sighting of the first black swan must have been a big surprise to ornithologists (and indeed anyone who is in any way sensitive to the color of a bird's feathers), but the story is important for another reason. It shows within what strict boundaries of observation or experience our learning occurs and how relative our knowledge is. A single observation can negate an axiom that has been developed over several millennia, when people admired only white swans. To refute it, one (and, they say, rather ugly) black bird was enough*.

I go beyond this logical-philosophical question into the realm of empirical reality, which has interested me since childhood. What we will call a Black Swan (with a capital B) is an event that has the following three characteristics.

Firstly, it is anomalous, because nothing in the past predicted it. Secondly, it has enormous impact. Third, human nature forces us to come up with explanations for what happened after it has happened, making an event that was initially perceived as a surprise understandable and predictable.

Let's stop and analyze this triad: exclusivity, impact and retrospective (but not forward) predictability**. These rare Black Swans explain almost everything that happens in the world, from the success of ideas and religions to the dynamics of historical events and the details of our personal lives. Since we emerged from the Pleistocene - approximately ten thousand years ago - the role of Black Swans has increased significantly. Its growth was especially intense during the Industrial Revolution, when the world began to become more complex, and everyday life - the one we think about, talk about, which we try to plan based on the news we read from newspapers - went off the beaten path.

<*Распространение камер в мобильных телефонах привело к тому, что читатели стали присылать мне изображения черных лебедей в огромных количествах. На прошлое Рож-дество я также получил ящик вина "Черный лебедь" (так себе), видеозапись (я не смотрю видео) и две книги. Уж лучше картинки. (Здесь и далее, за исключением особо оговоренных случаев, - прим. автора.)

** The expected absence of an event is also a Black Swan. Please note that according to the laws of symmetry, an extremely improbable event is the equivalent of the absence of an extremely probable event. >

Think how little your knowledge of the world would help you if, before the war of 1914, you suddenly wanted to imagine the further course of history. (Just don't fool yourself by remembering what your boring school teachers filled your head with.) For example, could you have foreseen Hitler's rise to power and a world war? And the rapid collapse of the Soviet bloc? And the outbreak of Muslim fundamentalism? What about the spread of the Internet? And what about the market crash in 1987 (and a completely unexpected revival)? Fashion, epidemics, habits, ideas, the emergence of artistic genres and schools - everything follows the “Black Swan” dynamics. Literally everything that has any significance.

The combination of low predictability and power of impact turns the Black Swan into a mystery, but that’s not what our book is about. It's mainly about our reluctance to admit that it exists! And I don’t mean just you, your cousin Joe and me, but almost all representatives of the so-called social sciences, who for more than a century have been flattering themselves with the false hope that their methods can measure uncertainty. Applying vague science to real world problems has a ridiculous effect. I have seen this happen in economics and finance. Ask your “portfolio manager” how he calculates risks. He will almost certainly give you a criterion that excludes the possibility of a Black Swan - that is, one that can be used to predict risks with about the same success as astrology (we will see how intellectual fraud is dressed up in mathematical clothes). And so it is in all humanitarian spheres.

The main point this book makes is our blindness to randomness, especially on a large scale;

Nassim Nicholas Taleb

The Impact of the Highly Improbable

Nassim Nicholas Taleb

Black Swan

Under the sign of unpredictability

Prologue. About bird plumage9

Part I Anti-library of Umberto Eco,

or About searching for confirmations28

Chapter i. Years of teaching as an empiricist-skeptic31

Chapter 2. Eugenia's Black Swan59

Chapter h. Speculator and prostitute63

Chapter 4. A thousand and one days,

or How not to be a sucker81

Chapter 5. Proof-smacking proof!100

Chapter 6: Narrative Distortion117

Chapter 7. Life on the Threshold of Hope153

Chapter 8. Fortune's Favorite Giacomo Casanova:

problem of hidden evidence174

Chapter 9. Game error,

or the uncertainty of the "nerd"207

Part II. It is not given to us to foresee225

Chapter 10. Predictive paradox228

Chapter 11. Discovery based on bird droppings271

Chapter 12. Epistemocracy, dream310

Chapter 13. Painter Apelles,

or How to live in conditions of unpredictability 326

Part III. Gray swans of Extremistan 343

Chapter 14. From Mediocristan to Extremestan and back 345

Chapter 15. Normal distribution curve,

great intellectual deception 366

Chapter 16. Aesthetics of chance 402

Chapter 17. Locke's Madmen,

or "Gaussian curves" are out of place 432

Chapter 18. "Linden" uncertainty 449

Part IV, final 459

Chapter 19. The middle is half, or How to make ends meet

ends with the Black Swan 459

End 464

Epilogue. White swans of Eugenia 466

Dictionary 469

Bibliography 474

Dedicated to Benoit Mandelbrot, a Greek among the Romans

PROLOGUE. About bird plumage

About bird plumage

D O After the discovery of Australia, the inhabitants of the Old World were convinced that all swans were white. Their unshakable confidence was fully confirmed by experience. The sighting of the first black swan must have been a big surprise to ornithologists (and indeed anyone who is in any way sensitive to the color of a bird's feathers), but the story is important for another reason. It shows within what strict boundaries of observation or experience our learning occurs and how relative our knowledge is. A single observation can negate an axiom that has been developed over several millennia, when people admired only white swans. To refute it, one (and, they say, rather ugly) black bird was enough*.

I go beyond this logical-philosophical question into the realm of empirical reality, which has interested me since childhood. What we will call a Black Swan (with a capital B) is an event that has the following three characteristics.

Firstly, it is anomalous, because nothing in the past predicted it. Secondly, it has enormous impact. Third, human nature forces us to come up with explanations for what happened after it has happened, making an event that was initially perceived as a surprise understandable and predictable.

Let's stop and analyze this triad: exclusivity, impact and retrospective (but not forward) predictability**. These rare Black Swans explain almost everything that happens in the world, from the success of ideas and religions to the dynamics of historical events and the details of our personal lives. Since we emerged from the Pleistocene - approximately ten thousand years ago - the role of Black Swans has increased significantly. Its growth was especially intense during the Industrial Revolution, when the world began to become more complex, and everyday life - the one we think about, talk about, which we try to plan based on the news we read from newspapers - went off the beaten path.

I read another book by Nassim Taleb:

Nassim Nicholas Taleb. Black Swan. Under the sign of unpredictability. M.: KoLibri, 2009. – 528 p.

Previously, I introduced you to a book by this author -. I am close to Taleb's ideas, especially our inability to plan and the exaggeration of the importance of cause-and-effect relationships, so I enjoyed reading The Black Swan. The book is written in good literary language [and well translated], and is read in one breath. I recommend!

Download a short summary in format, examples in format

Prologue. About bird plumage

A rare event, a Black Swan, has three characteristics:

• Abnormally
• Has enormous impact power
• We come up with explanations after an event has happened, making an event that was initially perceived as a surprise explainable and predictable.

The main thing that the book talks about is our blindness to randomness, especially on a large scale. Black swans appeared in the world and shocked it precisely because no one was expecting them. …The success of human endeavors, as a rule, is inversely proportional to the predictability of their results.

I disagree with the followers of Marx and Smith: the free market works because it allows everyone to “catch” luck through gambling trial and error, and not to receive it as a reward for diligence and skill.

...what hinders us is that we are too focused on what is known, we tend to study details rather than the big picture. ...we don't train. The problem is in the structure of our consciousness: we do not comprehend the rules, we comprehend the facts, and only the facts. We despise the abstract, and we despise it passionately.

Hidden heroes. Who gets the reward – the head of the Central Bank who prevented a recession, or the one who “corrects” the mistakes of his predecessor by being in his place during the economic recovery? ...Everyone knows that prevention should be given more attention than therapy, but few people give thanks for prevention.

Platonism I call our tendency to mistake the map for the terrain, to concentrate on clear “forms” at the expense of understanding diversity [induction, simplification].

In this book I stick my neck out and make a demand against many of our thinking habits, against the fact that our world is dominated by neglect of the unknown, and the very improbable (improbable according to our current knowledge). And we spend all our time measuring, focusing on what we know and what repeats.

This implies the need to use the emergency as a starting point and not view it as an exception that we will push aside.

I also make the bold (and even more annoying) claim that, despite the growth of our knowledge, or even because of this growth, the future will be less and less predictable, while human nature and social "science" seem to , are secretly plotting to hide this idea from us.

PartI. The Anti-Library of Umberto Eco, or the Search for Evidence

Books read are much less important than books not read. The library should contain as much unknown as your finances allow you to fit into it...

Chapter 1. Years of teaching as an empiricist-skeptic

The human mind suffers from three diseases when it tries to grasp history, and I call them Triad of eclipse:

1. The illusion of understanding. That is, everyone thinks they know what's going on in a world that is actually more complex (or random) than they think.
2. Retrospective bias, or the fact that we can only evaluate events after the fact. History seems clearer and more organized in history books than in reality.
3. The tendency to exaggerate the significance of a fact, aggravated by the harmful influence of scientists, especially when they create categories, that is, “platonize”.

...our mind is an excellent explanatory machine that can find meaning in almost anything, interpret any phenomenon, but is completely unable to accept the idea of ​​unpredictability.

History and societies do not crawl. They make leaps. They go from fracture to fracture. Between fractures, almost nothing happens in them. Yet we (and historians) like to believe in predictable, small, gradual changes. ...you and I are nothing more than an excellent retrospection machine, and people are great masters of self-deception.

Categorization always simplifies reality. Categorization is necessary for people, but it turns into disaster when the category begins to be seen as something final, excluding the fragility of boundaries - not to mention the revision of the categories themselves.

I was struck by the idea of ​​market rationality - the idea that there is no way to make a profit from the securities sold, since the price of them automatically includes all available information, that is, the market "knows" the real price of the shares. Generally known information is therefore useless, especially for a businessman, because the price already “includes” all such information, and news that is seen by millions does not give you any real advantage.

Chapter 2. Eugenia's Black Swan

Chapter 3. Speculator and prostitute

The most important advice [that later turned out to be bad] I received from a second-year student at the Wharton School of Business. He recommended that I get " scalable» profession, in the sense that you are not paid per hour of work, and thus you are not limited to the total number of hours you work. This was the simplest way to separate one profession from another and thus generalize the differences between types of unpredictability, and it led me to a fundamental philosophical problem - the problem of induction [the technical name of the Black Swan]. I drew a line between a man of “ideas,” who sells an intellectual product in the form of a business transaction or a work, and a man of “labor,” who sells his own labor. In one category of professions, mediocrity, mediocrity, and the golden mean dominate. Efficiency in them is achieved by mass. In the other there are only giants and dwarfs - or rather, a very small number of giants and a huge number of dwarfs. ...a few get almost everything; the rest are crumbs.

Mediocristan [physical, etc. characteristics of a person]. When the sample population is large, no single incident will make a significant difference to the mean or total. Extremistan [social phenomena, e.g. income]. A single example may add a disproportionately large amount to the total or average. Extremistan produces Black Swans because only a handful of events have had a defining impact on history. This is the main idea of ​​the book.

If you are dealing with extreme values, it is very difficult to get an average from a given sample, because a single observation may be decisive. That's the whole idea of ​​the book - nothing complicated.

In the average country we are forced to endure the tyranny of the collective, the routine, the obvious and the predictable; in extremity we are ruled by the tyranny of the individual, the random, the invisible and the unpredictable.

The table below summarizes the differences between the two types of dynamics:

Chapter 4. A thousand and one days, or how not to be a sucker

Induction Problem: How can we logically move from a particular assumption to general conclusions? How do we know what we know? How do we know that something we notice about given objects or events is enough to allow us to figure out their other properties? Any knowledge gained from observation contains pitfalls.

Rice. 1. One Thousand and One Days in History or the Turkey Effect

Turkey before and after Thanksgiving. The history of the process for more than 1000 days says nothing about what is about to happen. This naive projection of the past into the future is of no use.

We simply don't know how much information the past contains.

... erudition is important to me. It signals genuine intellectual curiosity. It accompanies an open mind and a desire to explore the ideas of others. First of all, a polymath may not be satisfied with his own knowledge, and such dissatisfaction is a wonderful shield against Platonism, the simplifications of the five-minute manager, or philistinism.

I am often asked: “How do you, Taleb, cross the road with your extreme awareness of risk?” or even more stupid: “You are asking us not to take risks.” I'm not advocating risk phobia (we'll see that I'm endorsing the aggressive type of risk taking): all I'll be showing you in this book is how to avoid crossing the road while blindfolded.

...it is extremely convenient for us to assume that we live in Mediocristan. Why? Because it allows you to rule out the Black Swan! In this case, the Black Swan problem either does not exist at all or has little consequences.

There are other points that arise from our lack of attention to the Black Swan:

Chapter 5. Smack proof!

Although belief in evidence has become part of our habits and our consciousness, it can be dangerously erroneous.

Flaw-shifter. Replacing the statement: “there is no evidence of the possibility of radical change” with “there is evidence of the impossibility of Black Swans.” Many people confuse the statement, “almost all terrorists are Muslims” with “almost all Muslims are terrorists.”

Any rule can be tested either directly, by looking at cases in which it works, or indirectly, by focusing on cases in which it does not work. Refuting examples are much more important in establishing the truth. But you don’t seem to know about this.

Chapter 6: Narrative Distortion

Explanations connect facts to each other; help you remember them; give them more meaning. This is dangerous because it strengthens us in the illusion of understanding. …narrativeness stems from an innate biological need to minimize multidimensionality. Information requires being simplified.

In the previous chapter, speaking about the problem of induction, we made assumptions about the invisible, that is, what lies outside the information field. Here we will deal with the visible, with what lies inside the information field, and we will understand the distortions that arise during its processing.

A little test. Read:

BETTER TIT IN
IN THE HANDS THAN A CRANE
IN THE SKY

Did you notice anything? …refusal to theorizing requires much more energy than theorizing! Theorizing occurs in us latently, automatically, without our conscious participation.

Our tendency to narration, that is, to build narrative chains, has a very deep psychological reason; it is associated with the dependence of information storage and availability on order. Unfortunately, the same thing that forces us to simplify also forces us to think that the world is less chaotic than it really is.

The assimilation (and imposition on the world) of narrative and causality is a symptom of the fear of multidimensionality.

If the level of uncertainty in your business is high, if you constantly punish yourself for actions that led to undesirable consequences, start by keeping a diary.

We love to rush around with certain and already familiar Black Swans, while the essence of randomness is in its abstractness.

Chapter 7. Life on the Threshold of Hope

We believe that there is a cause-and-effect relationship between the two variables. An increase in one value will necessarily entail an increase in another. The trouble is that the world is much less linear than we used to think and than scientists would like to believe. … linear progress, dear to platonists, is not the norm.

Chapter 8. Fortune's favorite Giacomo Casanova: the problem of hidden evidence

The Greek philosopher Diagoras, nicknamed the Atheist, was shown images of people who prayed to the gods and were saved from a shipwreck. It was understood that prayer saves from death. Diagoras asked: “Where are the images of those who prayed, but still drowned?” I call this the hidden evidence problem. This is the basis of almost all superstitions - in astrology, dreams, beliefs, predictions... By hiding evidence, events mask their randomness.

We neglect implicit evidence whenever it comes to comparing abilities, especially in winner-take-all fields. We can admire success stories, but we shouldn’t believe them unconditionally: we probably don’t see the full picture. ... if we want to study the nature and causes of success, then we must also study failure. Almost all books that aim to identify the skills an entrepreneur needs to thrive follow the following pattern. The authors select several famous millionaires and analyze their qualities. They look at what unites these “tough guys” - courage, willingness to take risks... - and conclude: these traits allow them to achieve success... Now look at the cemetery. It's not easy, because losers don't write memoirs. The very idea of ​​a biography is based on the assumption that there is a cause-and-effect relationship between certain personality traits and success. Success and the cemetery share one thing - luck. Ordinary luck.

The most non-charlatan book on finance, in my opinion, was written by Paul and Moynihan and is called “What I Learned from Losing a Million Dollars.” The authors had to publish this book at their own expense.

Previously, I advised against choosing a scalable profession because there are very few “lucky” people in such professions. The cemetery of losers is huge: there are many more poor actors than poor accountants...

We make decisions blindly because alternatives are hidden from us by a veil of fog. We see obvious and visible consequences, and not those that are invisible and not so obvious. However, these invisible consequences are much more important.

Confirmation bias: Authorities are good at saying what they did, but not what they didn't do. In reality, they are engaged in ostentatious “philanthropy”, that is, they help people so that everyone can see and sympathize, forgetting about the hidden cemetery of invisible consequences.

Suppose a medicine is invented that cures some serious illness, but in exceptional cases leads to the death of the patient, which is not significant on a social scale. Will the doctor prescribe this medicine to the patient? It's not in his best interest. If a patient suffers from side effects, his lawyers will hound the doctor like hunting dogs, and hardly anyone will remember the lives saved by the new drug. A life saved is a statistic; an injured patient is a scandalous incident. Statistics are invisible; incidents are being shouted about on every corner. The threat of the Black Swan is also invisible.

Survival bug: Don't judge the probability from the high vantage point of a lucky player, judge from the perspective of those who made up the original group.

All of the above completely devalues ​​the concept of “cause”... almost always misapplied by historians... it is easier for us to say “because” than to recognize the power of chance... do not put too much faith in reasons - especially when there is the possibility of significant hidden evidence.

Chapter 9. Game error, or “nerd” uncertainty

A “nerd” is a person whose thinking is extremely limited. Have you ever wondered why so many straight-A students achieve nothing in life, while those who lagged behind at school are raking in money?..

Game error: the type of risks that the casino deals with are almost never found outside the walls of this building and studying it is of little use in reality.

Humans are predisposed to certainty. It is necessary to learn the art of doubt, the art of remaining on the line between doubt and faith.

The “cosmetic”, the platonic, the light always floats on the surface... we are occupied with what has already happened, and not with what can yet happen... we become victims of the problem of induction... sadly, the current version of man is not created to understand abstract matters – Context is too important to her. And randomness and uncertainty are abstract. We rush around with what happened, ignoring what could have happened.

PART II. We are not allowed to foresee

Trying to look into the future, we “tunnel” - we imagine it as ordinary, free from Black Swans, but there is nothing ordinary in the future! This is not a Platonic category. ...the focus on the ordinary (ordinary), platonization force us to predict according to a template. What companies need is not precise plans, but the development of adaptation skills. The great baseball coach Yogi Berra said, “It’s not an easy thing to predict, especially the future.”

Chapter 10. Predictive Paradox

Forecasting without margin for error reveals three misconceptions generated by the same misunderstanding of the nature of uncertainty:

• The degree of uncertainty is not that important. At the same time, the errors are so large that they are more significant than the assumptions themselves.
• Failure to understand that the longer the time period, the more difficult it is to make an accurate forecast.
• Underestimation of the random nature of predicted variables

When choosing a strategy, the extreme limit of risk is extremely important - it is much more important to know the worst case scenario than the general forecast.

Chapter 11. Discovery based on bird droppings

So, earlier we made sure that

• We are prone to tunneling (limiting ourselves to boundaries, viewing the future as a continuation of the past) and narrow thinking (epistemic arrogance)
• The success of our predictions is greatly overestimated.

In this chapter we will try to understand something that is not usually advertised: the structural limitations of our ability to predict.

Poincaré introduced the concept of nonlinearity: small events can lead to serious consequences. Nonlinearity, according to Poincaré, is a serious argument that limits the limits of predictability.

In the 1960s, meteorologist Edward Lawrence made a discovery later called the “butterfly effect.” He simulated the weather and re-entered the same values ​​as input, but with different rounding...

Platonists are characterized by a “top-down” view, stereotypical and narrow thinking, fixation on their own interests, and impersonality. Non-Platonists are characterized by a bottom-up view, open-mindedness, skepticism and an empirical mindset.

The past can be confusing, and there are many degrees of freedom in our interpretations of past events. Look at a series of dots representing changes in a certain number over time (Fig. 2a). A series showing the apparent growth of the bacterial population (or sales figures, or the amount of feed eaten by the turkey from Chapter 4 (a). It is easy to fit into the trend (b): there is one, and only one, linear model that fits these data. You can extend it into the future. If you look into the future on a larger scale (c), other models also fit. The real "generative process" (d) is extremely simple, but has nothing in common with the linear model! Only some parts of the curve appear linear, and we fall into the trap of extrapolating them as a straight line.

These graphs illustrate the statistical version of the narrative fallacy—you find a pattern that fits the past. You can look at the linear part of the curve and brag about the high R-squared [trend line parameter], supposedly indicating that your model fits the data well and has great predictive power. All this is nonsense: it is only suitable for the linear segment. Remember that R-squared is not good for Extremistan.

Rice. 2. An example of a narrative error if the pattern is nonlinear.

Chapter 12. Epistemocracy, a dream

The one who Not is distinguished by epistemic arrogance and, as a rule, is not very noticeable to everyone. It is not customary for us to respect modest people who do not rush to judgment. They have epistemic modesty.

...in theory, randomness is an inherent property of events, but in practice, randomness is incomplete information, what I call the impenetrability of history.

Chapter 13. The painter Apelles, or How to live in conditions of unpredictability

The recommendation for every day is this: remain human. Accept that you are human, and in all your endeavors there is a share of epistemic arrogance. Don't forbid yourself to judge and evaluate. What should be avoided is unnecessary dependence on disastrous large-scale forecasts. The main thing: be prepared! Remember how intoxicating the magic of numbers is. Be prepared for any possible contingencies.

Know how to distinguish “good” accidents from bad ones, do not strive for accuracy and specificity, grab any opportunity or anything that looks like an opportunity, beware of developed government plans, do not waste time fighting with forecasters.

“There are people to whom you can’t explain anything if they haven’t already understood it,” Yogi Berra once said.

The essence of the asymmetry of outcomes: I will never know the unknown. But at the same time, I can guess how it will affect me, bad or good, and make decisions based on my own guesses and conclusions. To make decisions, you must focus on the consequences (which you can know) rather than on the probability of an event (the extent of which you cannot know) - this is the main rule of uncertainty. On this foundation, a general theory of decision making can be built.

The reasons for our inability to understand what is happening: epistemic arrogance, the Platonic desire to squeeze everything into categories - in other words, people willingly believe simplified models, unsuitable methods for constructing conclusions, especially those that completely do not take into account the emergence of the Black Swan, methods from Mediocristan.

PART III. Gray swans of Extremistan

Chapter 14. From Mediocristan to Extremistan and back

Matthew effect (money to money) or cumulative advantage.

Chapter 15. The Bell Curve, the Great Intellectual Hoax

The basic principle of the Gaussian curve is a sharp increase in the rate at which chances decrease with distance from the center, that is, from the average. There are two and only two paradigms: one that is not scalable (like Gaussian) and another (like Mandelbrot randomness). It is enough to get rid of the use of a non-scalable paradigm to get rid of a narrow view of the world.

The 80/20 rule is just a metaphor; This is not a general rule, much less a strict law; for example, 50/1.

As the size of the Srednestanskaya sample increases, its median component will look less and less dispersed - the distribution will narrow (Fig. 3). This is how everything actually works in statistical theory. Uncertainty in Mediocristan disappears when averaging. This is an illustration of the well-worn “law of large numbers.”

Rice. 3. Gaussian

The Gaussian family is the only class of distributions for which the standard deviation and the mean are sufficient to describe it. Nothing more is needed. The Gaussian curve is a godsend for those who like simplifications.

The omnipresence of the Gaussian is not a property of the world, but a problem that exists in our minds and arises from our view of the world.

Chapter 16. Aesthetics of chance

A fractal (Latin fractus - crushed, broken, broken) is a complex geometric figure that has the property of self-similarity, that is, composed of several parts, each of which is similar to the entire figure.

Year of issue: 2010
Nassim Nicholas Taleb
Series: No series
Genre: Textbooks
Number of pages: 680
Format: epub, fb2, rtf, txt
Note (status): Fully

Description

There are many different terms in the world of finance. It is almost impossible to remember them all. But there are some that immediately catch your eye. For example, "Black Swans". This concept was once introduced by the Lebanese financial guru Nassim Taleb. This is what he calls episodes that are impossible to predict, even in the modern world. And if you have connected your life with the financial environment, then you must be prepared for them. If you ignore even the slightest hint of the appearance of Black Swans, then ultimately everything will end in huge losses. Taleb proved this by his example when, after the publication of this book, a financial crisis occurred and his company, instead of incurring losses, as happened with its competitors, made a profit of half a billion dollars.

Read Black Swan. Under the sign of unpredictability (collection)

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