The Black Swan (Nassim Nicholas Taleb)

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Illustration around 1790

The Black Swan: The Power of Highly Unlikely Events is a book by writer and stockbroker Nassim Nicholas Taleb . According to Taleb, a "black swan" is an event that is rare and highly unlikely . The author deals with the often extreme consequences of these rare and improbable events (outliers) as well as the human trait of finding simple and understandable explanations for these events afterwards .

Taleb first used the term "black swan" in his 2001 book Fooled By Randomness , which refers to events in financial history. In 2007 he published his own book under the title The Black Swan with considerations beyond the stock market.

Taleb refers to essential discoveries, historical events and artistic achievements as black swans . These events include the discovery of the antibacterial properties of penicillin and the discovery of America in search of a new route to India. Taleb attributes these events to a chance observation of something not originally sought, which turns out to be a new and surprising discovery ( serendipity ). The use of metaphor in Taleb's interpretation has now further use in the so-called "black swan theory" and "Black Swan presumption" (English: Black Swan conjecture ) found.

background

Mourning swan with cubs

The image of the “black swan” as a completely unexpected event goes back to the satirist Juvenal . In (Satiren VI, 161) he names a faithful wife rara avis in terris, nigroque simillima cygno (a rare bird in all countries, most like a black swan). Black swans were unknown in Europe at that time. In the following, Juvenal (Satiren VII, 202) also speaks of the “white raven”: Felix illegally tamen corvo quoque rarior albo (such a lucky guy is rarer than a white raven).

But after Willem de Vlamingh actually saw black swans in Western Australia in 1697 and other travelers reported about Australia's black swans, the English language of speech became a metaphor for an unlikely but possible event. With John Stuart Mill and later Karl Popper the black swan served as an example of deductive falsification .

content

The “Black Swan” is - like other Taleb books - in the form of essays with all kinds of autobiographical allusions and cross-references. First, he discussed his thesis with his youth in the Levant and historiography in general. He also posits a triplet of opacity , a trinity of misunderstanding about history and its impact on the present:

  1. the illusion of understanding current events
  2. the retrospective distortion of historical events and
  3. the overestimation of factual information combined with an overestimation of the intellectual elite.

Taleb regards it as pointless trying to foresee black swans. They are characterized precisely by their unexpected appearance. Taleb is concerned with achieving stability and robustness (derived from the concept of robust estimation methods ) in relation to negative black swans and, with positive black swans, making better use of these. Taleb assumes that banks and stock traders are highly vulnerable to black swans.

In the further course, Taleb reports on a neurologist named Yevgenia Nikolayevna Krasnova and her book A Story of Recursion , which is said to have become a world best seller from a web publication, in the sense of a positive black swan . Her second, long-awaited book, The Loop , has been labeled a masterpiece. However, it hardly sold at all. It thus represents a negative black swan . Taleb attributes a number of his own character traits to his fictional heroine. Krasnova contradicts the separation between narrative and factual report.

The author differentiates between the fictional countries Extremistan and Mediokristan . In Mediokristan there is a mediocrity “with few extreme successes or failures”. A single observation cannot meaningfully affect the whole. This property of non-scalability of events is reflected in the Gaussian bell curve (see also the article Normal Distribution ). In Extremistan , a single observation can have a major impact on the whole ( scalability ).

The assumption of a normally distributed probability distribution is suitable, according to Taleb, for a small number of areas such as crime statistics , mortality rates and things from Mediocristan. For historical data with unknown attributes and things from Extremistan, however, the normal distribution is not suitable. Many economic models, such as the Black-Scholes model criticized by Taleb, are based on the assumption of normally distributed data .

Taleb sees one way of reducing the effects of black swans in the fractal randomness according to Benoît Mandelbrot . Taleb refers to black swans, which can be expected to some extent, as gray swans . The author “Earthquakes, blockbusters in books and stock market crashes” is one of these gray swans. However, the characteristics of gray swans can "not be fully determined". Likewise, the gray swans or their properties cannot be precisely calculated.

In addition, Taleb sees the interpretation of an event as a black swan as dependent on the observer . If a turkey is slaughtered, it may be a black swan for the turkey while the associated butcher is simply doing his job. With that in mind, it is important to avoid the turkey position in order to whitewash a black swan.

Taleb believes that most people - firmly convinced that there are only white swans - ignore "black swans" because it is more pleasant to see the world as orderly and understandable. Taleb calls this blindness a " platonic fallacy" and states that it leads to three cognitive distortions :

  • Narrative fallacy : the subsequent creation of a narrative to give an event a plausible reason;
  • Ludic distortion (ludic fallacy) : The belief that the structured coincidence as it is to be found in games like the unstructured chance in life. Taleb objects to the unreflective application of models of modern probability theory such as the random walk ; and
  • Statistical regressive bias (statistical regress fallacy) : The belief that the essence of a random distribution can be deduced from a series of measurements .

According to Taleb, counterfactual thinking is a way of protecting yourself from black swans, i.e. from unknown ignorance . Financially, the author recommends putting around 90% of the available investment volume in extremely safe investments such as government bonds and around 10% in several highly speculative forms of investment such as venture capital . With this methodology, Black Swans could have a much smaller negative impact on investment success.

Applications and reception

Taleb's book became a popular science bestseller, reprinted several times and translated into various languages. There are also a number of scientific applications to his considerations, such as the 2011 Fukushima nuclear disaster .

The psychologist and Nobel laureate Daniel Kahneman attributed the book to a significant influence on his world of thought and explained this in his book Fast Thinking, Slow Thinking , published in 2011 . Taleb's criticism of statistical models was contradicted insofar as statistics also make it possible to identify threatening black swans. The term itself was less questioned. Taleb's style and his narrative lecture are seen as scientifically inadequate in comparison to the original essay as a stylistic form.

expenditure

  • Nassim Nicholas Taleb: The Black Swan: The Power of Most Unlikely Events, (Original title: The Black Swan , translated by Ingrid Proß-Gill). Hanser, Munich 2008, ISBN 978-3-446-41568-3 ; Paperback edition: dtv, Munich 2010, ISBN 978-3-423-34596-5 .
    • English original edition: The Black Swan: The Impact of the Highly Improbable . Random House , New York 2007, ISBN 978-1-4000-6351-2 . The book was completed in 2010 with a 2nd edition including the longer essay "On Robustness and Fragility" in the appendix.
  • The Black Swan: The Power of Highly Unlikely Events . Albrecht Knaus Verlag , Munich 2015, ISBN 978-3-8135-0686-0 . The previously published volumes “The Black Swan: The Power of Highly Unlikely Events” (2008) and “The Black Swan: Consequences of the Crisis” (2010) are summarized in this edition and introduced with a new essay by Taleb.
  • Antifragility: Instructions for a World We Don't Understand . Albrecht Knaus Verlag , Munich 2013, ISBN 978-3-8135-0489-7 .

Web links

Individual evidence

  1. ↑ The Black Swan - Consequences of the Crisis / Nassim Nicholas Taleb. From the English by Ingrid Proß-Gill Verleger, Dt. Taschenbuch-Verlag., Munich 2012, ISBN 9783423347341
  2. ^ NN Taleb: Prologue . In: The Black Swan , Second. Edition, Penguin, 2010.
  3. ^ Encyclopaedia Perthensis, Vol. 22, Edinburgh 1816, p. 25. Online
  4. ↑ Review of the FAS What can go wrong, somehow go wrong. October 12, 2008 · A former stock trader has an unusual view of risk. His book is a bestseller in America.
  5. ↑ Niklas Möller & Per Wikman-Svahn (2011): Black Elephants and Black Swans of Nuclear Safety, Ethics, Policy & Environment, 14: 3, 273-278, doi : 10.1080 / 21550085.2011.605853