The Black Swan by Nassim Taleb

A Black Swan is an event or situation that is impossible to predict. Once it occurs, the consequences are devastating. A black swan can be positive, too. But they usually arrive with negative effects.

No matter how many sophisticated models and systems we invent, randomness has the ultimate say. More than ever, the impact of a black swan is deadly now. All thanks to government interventions. When you are trying to even out and make the economy smoother, out of the blue, a black swan pops out and turns things up and down.

Instead of letting nature take its course, we humans are playing the role of God. Bailing out companies and ‘sophisticating’ systems to eliminate randomness altogether push us to the rock bottom, where recovery becomes a rumor. Think of the economy crashes of the dot-com bubble, the 2008 housing crisis, and the Covid economic slowdown.

What can be done, then? Should we give up predicting completely? At any given point, there are so many things influencing each other that you cannot know. They are undercurrents. If you are predicting based on past data, chances are that you will be likely wrong.

The problem is that you absolutely have no idea how many variables influenced the data in the past. Good luck with finding what those variables are. We humans suffer from narrative fallacy; we weave a story based on random points. And we believe we know what caused what.

Just like we cannot see the future, we cannot ‘predict’ our past either. We shouldn’t just limit ourselves to the stories but investigate the random points and how they are connected. And we should also keep in mind that some random points don’t have any connections. In other words, not everything has a cause.

Of all, stop listening to economics and other predictions. Although they are entertaining, if we base our decisions on these, we are dooming ourselves. Predictors don’t have skin in the game, meaning they don’t face consequences for their predictions, but we do if we follow them blindly.

Nassim Taleb is one of my favorite writers and thinkers. He influenced me to get interested in probability. I feel so much comfort and feel heard when I read his books. The Black Swan made me smile and feel acknowledged.

The Black Swan is a great read. One of the best books out there. Nassim doesn’t sugarcoat. He doesn’t give a damn what you think. He gives you a reality check. He offends you (and dismisses you if you are an economist). Even if you are not interested in this subject, you should read the book for structure and how the contents are presented. I highly recommend it.