The book discusses the concept of "Black Swan" events - highly improbable occurrences with large impacts that are only predictable after the fact. It argues that humans have a tendency to underestimate uncertainty and ignore rare events. The book is divided into four parts - the first two discuss psychological biases that prevent awareness of Black Swans, while the second two apply these concepts to business, science and complexity. The main idea is that rather than trying to predict Black Swans, systems should be made more robust to negative ones and able to benefit from positive ones.

1. Book Review
Black Swan: The Impact of the Highly Improbable
By
Syed Shabbier Hussain Naqvi

2. What is a BLACK SWAN?
A BLACK SWAN is a highly improbable
event with three principal characteristics: It
is unpredictable; it carries a massive
impact; and, after the fact, we concoct an
explanation that makes it appear less
random, and more predictable, than it was.

3. Why Do We Not Acknowledge The
Phenomenon of Black Swans Until After
They Occur?
• Part of the answer, according to Taleb, is that humans are hardwired
to learn specifics when they should be focused on generalities.
• We concentrate on things we already know and time and time again
fail to take into consideration what we don't know.
In This Revelatory Book, Taleb Explains?
• Everything we know about what we don't know. He offers
surprisingly simple tricks for dealing with Black Swans and benefiting
from them.

4. Three Attributes of Black Swan as an
Event
• First, it is an outlier, as it lies outside the realm of regular
expectations, because nothing in the past can convincingly point to
its possibility. (RARITY)
• Second, it carries an EXTREME IMPACT.
• Third, in spite of its outlier status, human nature makes us concoct
explanations for its occurrence after the fact, making it explainable
and predictable., RETROSPECTIVE (though not prospective)
PREDICTABILITY

5. Something About The Book
• Author: The essayist, scholar and statistician Nassim Nicholas Taleb.
• Release: It was released on April 17, 2007 by Random House.
• Theme: The book focuses on the extreme impact of certain kinds of
rare and unpredictable events (outliers) and humans' tendency to
find simplistic explanations for these events retrospectively. This
theory has since become known as the “Black Swan Theory”.
• Crux: The book also covers subjects relating to knowledge, aesthetics,
and ways of life, and uses elements of fiction in making its points.
• Editions: The book first edition appeared in 2007 and was a
commercial success. It spent 36 weeks on the New York Times best-
seller list. The second, expanded edition appeared in 2010.

6. About Author
• Born in 1960, is a Lebanese-American essayist, scholar, statistician,
and risk analyst.
• MBA from Wharton School and a Phd. from the University of Paris
• Twenty years experience as a derivatives trader and quant before
pursuing scholarly inquiries into the nature of risk and probability full
time.
• Currently a Distinguished Professor of Risk Engineering at New York
University’s Polytechnic Institute, a scientific adviser at Universa
Investments and the International Monetary Fund and co-editor in
chief of the academic journal Risk and Decision Analysis.

7. Comments
• The book's layout follows "a simple logic" moving from literary
subjects in the beginning to scientific and mathematical subjects in
the later portions.
• Mathematics professor David Aldous argued that "Taleb is sensible
(going on prescient) in his discussion of financial markets and in some
of his general philosophical thought, but tends toward irrelevance or
ridiculous exaggeration otherwise

8. Key Points
• Predicting the future is, in many cases, impossible.
• People significantly underestimate the significance of extreme events
(Black Swans) when considering the future.
• There is a tendency to give explanations to largely random successes
or failures after the fact.
• Rare events occur much more often than we expect. Our minds are
programmed to deal with what we’ve seen before, to “expect the
expected”.
• Our tendency to discard rare events happens in part because people
underestimate their ignorance. There is a great deal we don’t know,
but since feeling ignorant isn’t pleasant, we tend to put it out of our
minds.
• We tend to invent stories where there are none. In other words, after
the fact, we like to invent explanations for why things happened the
way they did, which is much more comforting than staring at sheer
randomness.

9. • Platonicity is what makes us think that we understand more than
we actually do.
• The Platonic fold is the explosive boundary where the Platonic
mindset enters in contact with messy reality, where the gap
between what you know and what you think you know becomes
dangerously wide. It is here that the Black Swan is produced.
• What You Do Not Know? Black Swan logic makes what you don't
know far more relevant than what you do know.
• Experts and ‘Empty Suits’: The inability to predict outliers implies
the inability to predict the course of history
• Disproportionate Payoff by Black Swans: Indeed, in some domains
such as scientific discovery and venture capital investments, there is
a disproportionate payoff from the unknown, since you typically
have little to lose and plenty to gain from a rare event.

10. • Top-down Planning: The strategy for the discoverers and
entrepreneurs is to rely less on top-down planning and focus on
maximum tinkering and recognizing opportunities when they present
themselves.
• Learning to Learn
– We tend to learn the precise, not the general.
– We don't learn that we don't learn
– Our minds do not seem made to think and introspect
– We do much less thinking than we believe we do
• A New Kind of Ingratitude
– The feeling of uselessness on the part of the silent hero
– Our intuitions are made for an environment with simpler causes
and effects and slowly moving information, but
– We live in an environment where information flows too rapidly,
accelerating such epidemics
– You need more prevention than treatment, but few reward acts of
prevention.
– Recognition can be quite a pump

11. • Life is Very Unusual: The rare event equals uncertainty.
• Plato and The Nerd: The Platonic fold is the explosive boundary
where the Platonic mindset enters in contact with messy reality,
where the gap between what you know and what you think you
know becomes dangerously wide. It is here that the Black Swan is
produced.
• The Bottom Line
– It is the drive to "focus" on what makes sense to us.
– We lack imagination and repress it in others.
– The Black Swan idea is based on the structure of randomness in
empirical reality
• Something Unusual But True: It is also naïve empiricism to provide,
in support of some argument, series of eloquent confirmatory
quotes by dead authorities. By searching, you can always find
someone who made a well-sounding statement that confirms your
point of view— and, on every topic, it is possible to find another
dead thinker who said the exact opposite. Almost all of my non-Yogi
Berra quotes are from people I disagree with.

12. Summary by Author
• The sequence of this book follows a simple logic; it flows from what
can be labeled purely literary (in subject and treatment) to what can
be deemed entirely scientific (in subject, though not in treatment).
• Psychology will be mostly present in Part One and in the early part of
Part Two;
• Business and natural science will be dealt with mostly in the second
half of Part Two and in Part Three.

13. Part-wise Summary by Author
• Part One, "Umberto Eco's Antilibrary," is mostly about how we
perceive historical and current events and what distortions are
present in such perception.
• Part Two, "We Just Can't Predict," is about our errors in dealing with
the future and the unadvertised limitations of some "sciences"—and
what to do about these limitations.
• Part Three, "Those Gray Swans of Extremistan," goes deeper into the
topic of extreme events, explains how the bell curve (that great
intellectual fraud) is generated, and reviews the ideas in the natural
and social sciences loosely lumped under the label "complexity."
• Part Four, "The End," will be very short.

14. The Main Idea
• It is not to attempt to predict Black Swan events, but to build
robustness to negative ones that occur and being able to exploit
positive ones.
• Taleb contends that banks and trading firms are very vulnerable to
hazardous Black Swan events and are exposed to losses beyond those
that are predicted by their defective financial models.
• A Black Swan event depends on the observer

15. Executive Summary
• Nassim Nicholas Taleb refers to the book variously as an essay or a
narrative with one single idea: "our blindness with respect to
randomness, particularly large deviations."
• It is Taleb's questioning of why this occurs and his explanations of it
that drive the book forward.
• Part One and the beginning of Part Two delve into psychology. Taleb
addresses science and business in the latter half of Part Two and Part
Three. Part Four contains advice on how to approach the world in the
face of uncertainty and still enjoy life.
• ‘Social scientists’, who, for over a century, have operated under the
false belief that their tools could measure uncertainty.
• The occurrence of a highly improbable event is the equivalent of the
nonoccurrence of a highly probable one.
• The central idea of this book concerns our blindness with respect to
randomness, particularly the large deviations

16. • Black Swan logic makes what you don't know far more relevant than
what you do know. Consider that many Black Swans can be caused
and exacerbated by their being unexpected.
• The payoff of a human venture is, in general, inversely proportional
to what it is expected to be.
• The inability to predict outliers implies the inability to predict the
course of history,
• What is surprising is not the magnitude of our forecast errors, but our
absence of awareness of it.
• Black Swans being unpredictable, we need to adjust to their existence
• Among many other benefits, you can set yourself up to collect
serendipitous Black Swans (of the positive kind) by maximizing your
exposure to them.
• We will see that, contrary to social-science wisdom, almost no
discovery, no technologies of note, came from design and planning—
they were just Black Swans.
• Another related human impediment comes from excessive focus on
what we do know: we tend to learn the precise, not the general.

17. • The problem lies in the structure of our minds: we don't learn rules,
just facts, and only facts.
• Everybody knows that you need more prevention than treatment,
but few reward acts of prevention. This is a book about uncertainty;
to this author, the rare event equals uncertainty.
• The first is to rule out the extraordinary and focus on the "normal."
• To understand a phenomenon, one needs first to consider the
extremes— particularly if, like the Black Swan, they carry an
extraordinary cumulative effect. I
• Indeed the normal is often irrelevant.
• Almost everything in social life is produced by rare but consequential
shocks and jumps;
• Bell curve ignores large deviations, cannot handle them, yet makes
us confident that we have tamed uncertainty. Its nickname in this
book is GIF, Great Intellectual Fraud.

18. Detailed Summary: Part one
• First Chapter: The Black Swan theory is discussed in relation to
Taleb's coming of age in the Levant. The author then elucidates his
approach to historical analysis. He describes history as opaque,
essentially a black box of cause and effect. One sees events go in
and events go out, but one has no way of determining which
produced what effect. Taleb argues this is due to The Triplet of
Opacity.
• Second Chapter: Taleb discusses a neuroscientist named Yevgenia
and her book A Story of Recursion. She published her book on the
web and was discovered by a small publishing company; they
published her unedited work and the book became an international
bestseller. The small publishing firm became a big corporation, and
Yevgenia became famous. This incident is described as a Black Swan
event. Taleb goes on to admit that the Yevgenia is a work of fiction.

19. • Third Chapter: Taleb introduces the concepts of Extremistan and
Mediocristan. He uses them as guides to define how predictable is
the environment one's studying. Mediocristan environments safely
can use Gaussian distribution. In Extremistan environments, a
Gaussian distribution is used at one's peril.
• Chapter Four: It brings together the topics discussed earlier in the
narrative, about a turkey. Taleb uses it to illustrate the philosophical
problem of induction and how past performance is no indicator of
future performance. He then takes the reader into the history of
skepticism.
• Chapter Five: Taleb introduces the round-trip fallacy, the human
tendency to conflate two similar-sounding statements that are in fact
convey very different information. Taleb uses the round-trip fallacy
primarily to underscore his point that no evidence of something --
say, a black swan -- is not the same as evidence of no black swans.
Lack of precedent for an occurrence (an earthquake hitting
Washington, D.C., perhaps) is not the same thing as evidence that
that thing will not occur. “our natural tendency to look only for …

20. • … corroboration.” It is an idea that is always readily abundant, and
by focusing on those things that support it we ignore a wealth of
information that do not support it. It is more valuable and yields
more conclusive findings to look for evidence that does not support
our line of reasoning rather than that which does.
• Chapter Six: It explores the human inclination to assign a narrative of
causality to a collection of otherwise random occurrences. “The
narrative fallacy addresses our limited ability to look at sequences of
facts without weaving an explanation into them... Explanations bind
facts together. They make them all the more easily remembered;
they help them make more sense.” The predisposition to impose
narratives, is an ingrained, biologically-based behavior that helps the
brain assimilate information. By creating patterns and, by extension,
narratives, we are able to condense a collection of individual details
into a single, unified story. But condensing something often results in
loss. By assigning a narrative to these events we oversimplify them
and discard information that does not appear to support our
narrative. Details deemed irrelevant are lost, …….

21. • …. effectively changing our memory of what’s happened. By eliminating we
trick ourselves into believing that life is easier to understand and explain
than it really is. Further hindering our ability to overcome the narrative
fallacy is our tendency to rely on what cognitive psychologists refer to as
System 1 thinking in which we make instinctive, immediate assumptions
based on experience. This system is advantageous in that it is quick and
automatic, but it is also error-prone. System 2 thinking, by contrast, is slow,
reasoned, and self-aware, better suited to the classroom than to a life-or-
death scenario. The problem, Taleb notes, is that we often mistake System 1
thinking for System 2 thinking. Because we are generally unaware of our
System 1 processes, we assume that the conclusions we’ve drawn from our
data is the result of reasoned analysis rather than reflexive assumptions. As
a result of our predisposition toward the narrative fallacy, Taleb argues, we
blind ourselves to the possibility of Black Swans and often misinterpret their
significance when they occur. We base assumptions about the future on
experiential and anecdotal information rather than on statistical or
empirical information, often exaggerating the likelihood of certain Black
Swans while ignoring entirely the potential for others.

22. • Chapter Seven: In Chapter Seven, Taleb explores the often painful
contradiction between pursuing activities that depend on Black
Swans -- endeavoring to become a bestselling novelist, for example --
and what Taleb asserts is a biological need for tangible, regular
results. Taleb further posits that a series of small rewards often brings
greater happiness than a single, extreme reward. Here Taleb also
draws the distinction between linear, incremental results and
nonlinear results that occur in leaps and bounds. While we might
prefer to believe that the world operates in a linear fashion, Taleb
assures us this is not so. Says Taleb, “Nonlinear relationships are
ubiquitous in life. Linear relationships are truly the exception; we
focus on them in classrooms and textbooks because they are easier
to understand (89).”

23. • Chapter Eight: In Chapter Eight, Taleb introduces the concept of
silent evidence. Like the antilibrary, silent evidence emphasizes what
is not known over what is. Essentially, silent evidence are those
instances which do not produce a Black Swan and thus do not receive
acknowledgement. As an example, Taleb points to the many, many
talented writers who never get their big break and whose work,
therefore, is never inducted into the literary canon. Since such works
are generally inaccessible, we tend to discount their relevance and
focus solely on the Black Swan works that did, through some
combination of talent and good fortune, secure their place in
literature. In essence we tend to give disproportionate weight to the
stories of those who succeed in some manner or another -- by
making a medical breakthrough, by becoming a millionaire, or, in
some cases, by simply surviving. The tendency to ignore silent
evidence (the failures), Taleb says, results in a distortion bias, “the
difference between what you see and what is there (102).”

24. • Chapter Nine: Taleb outlines the multiple topics he previously has
described and connects them as a single basic idea. In Chapter Nine,
Taleb takes this line of reasoning a step further to assert that all of
the topics discussed in Part One are essentially the same; concepts of
confirmation bias, narrative fallacy, silent evidence, etc., all
underscore the same basic point that human thinking
overemphasizes the visible and discounts that which is not
immediately obvious. Says Taleb, “It is why we do not see Black
Swans: we worry about those that happened, not those that may
happen but did not (131).” The ludic fallacy refers to the misguided
application of classroom reasoning to a world that is considerably
messier and more random the sterile classroom setting.

25. Part Two
Part II continues to explore the mental processes which inhibit our
ability to understand and prepare for Black Swans. While Part One
mainly investigates our inability to perceive Black Swans, Part II focuses
on our inability to assess the limits of our own knowledge, which, in
turn, limits our ability to prepare for the unexpected.

26. Chapter Ten
• Taleb introduces readers to the concept of epistemic arrogance, “Our
hubris concerning the limits of our knowledge, we are demonstrably
arrogant about what we think we know”.
• The result of epistemic arrogance is a limited ability to account for
the unforeseeable. “Epistemic arrogance bears a double effect: we
overestimate what we know, and underestimate uncertainty, by
compressing the range of possible uncertain states... Our human race
is affected by a chronic underestimation of the future straying from
the course initially envisioned.” Taleb frequently refers to the instinct
to compress the range of possible outcomes as tunneling, an inability
to account for factors outside of a pre-defined set of parameters.
• Taleb warns against trusting the predictions of so-called experts, who
are especially susceptible to the double effect. His assessment of the
value of expertise can be neatly summed up by a quote by Zen
master Suzuki who noted, “In the beginner’s mind there are many
possibilities, but in the expert’s there are few.”

27. Chapter Eleven
• Taleb emphasizes the importance of serendipity. “The classic model
of discovery is that you search for something you know (say, a new
way to reach India) and find something you didn’t know was there
(America).” He argues that remaining aware of the possibility of the
unintended, serendipitous results of our activities can help us
recognize and take advantage of positive Black Swans.
• The element of serendipity present in most major discoveries
illustrates a fundamental problem in attempting to predict the future,
known in statistics as the law of iterated expectations, which
essentially states that the expectation of knowledge is equivalent to
the knowledge itself. “If you know about the discovery you are about
to make in the future, then you have almost made it.”
• Taleb explores the massive amounts of data that need to be
accounted for in order to predict something. Such predictions, do not
even need to factor in trickier elements such as free will. All of these
observations ultimately serve to underscore for the futility of
attempting to predict the future.

28. Chapter Twelve
• Taleb describes his vision of utopia as an epistemocracy, “[A] society
governed from the basis of awareness of ignorance, not knowledge.”
He reiterates his cautions against assuming the past or present is
somehow an indicator of the future and explores the concept of
future blindness.
• Our future blindness is, in part, a symptom of our blindness of the
past. Taleb notes that interpretation of the past relies on a backward
process in which we attempt to reconstruct the past based on its
outcome, which is difficult compared to forward process.
• Finally, Taleb distinguishes between “true randomness” and
“deterministic chaos,” a system without predictable properties and a
system with properties that are difficult to identify, respectively. In
practice, Taleb argues, the two are indistinguishable, as they both
result in incomplete knowledge. The fact that something is possible
to predict is not useful if we do not know how to predict it.

29. Chapter Thirteen
• Taleb offers some practical guidelines for coping with life’s
randomness. Taleb encourages readers to focus on the potential
consequences of the unexpected rather than on the perceived
probability of the unexpected occurring. Taleb advises readers to
“[k]now how to rank beliefs not according to their plausibility but to
the harm they may cause.”
• Instead of putting your money in “medium risk” investments (how
do you know it is medium risk? by listening to tenure-seeking
“experts?”), you need to put a portion, say 85 to 90 percent, in
extremely safe instruments, like Treasury bills -- as safe a class of
instruments as you can manage to find on this planet. The remaining
10 to 15 percent you put in extremely speculative bets … preferably
venture capital-style portfolios. That way you do not depend on
errors of risk management; no Black Swan can hurt you at all, beyond
your “floor,” the nest egg that you have in maximally safe
investments.

30. Chapter Thirteen
• In essence, the barbell strategy advocates for, “taking maximum
exposure to the positive Black Swans while remaining paranoid about
the negative ones.”
• At its core, Taleb’s advice is to keep an open mind about both
negative and positive possibilities, and to not discount the possibility
of something happening just because it seems unlikely. He
encourages readers to maximize their exposure to potential positive
Black Swans by putting themselves in situations (like social
gatherings) that have the potential to produce fortuitous encounters.
While he advocates skepticism toward any definitive (or even
generalized) predictions of the future, Taleb advises readers against
trying to deter those making the predictions; such endeavors are a
waste of energy.

31. Part Three
• In the introduction to Part III, Taleb prepares readers for a
exploration into the nitty-gritty details behind his central themes.
Such details, he acknowledges, are not essential to the reader’s
understanding of his key principles, and he gives the practical reader
his blessing to skip straight to Part IV. Readers would be remiss in
heeding this advice, however, as some of Taleb’s most chilling
insights reside in Part III, most notably an apparent foreshadowing
of the 2008 financial crisis.

32. Chapter Fourteen
• Taleb explores preferential-attachment theories which deal with
inequalities that result from a cumulative effect. Sociologist Robert K.
Merton proposed a model called the Matthew Effect, noting that
those at the top are more likely to continue to gain resources,
accolades, or whatever advantage is relevant to the scenario.
• Taleb points out that these models fail to take into account the role
of luck in one’s ascent to the top and “do not account for the
possibility of being supplanted by newcomers.” Not so in
Extremistan, Taleb says, where everyone is vulnerable to the effects
of the Black Swan which can manifest itself as a stroke of extremely
good or extremely bad luck, depending on one’s perspective.
• The discounting of Black Swans becomes a more dire problem in
today’s globalized economy. It is here that Taleb’s insights borderline
on prophetic.

33. Chapter Fourteen
• [Globalization] creates interlocking fragility … Financial institutions
have been merging into a smaller number of very large banks. Almost
all banks are now interrelated … When one falls, they all fall. The
increased concentration among banks seems to have the effect of
making financial crisis less likely, but when they happen they are
more global in scale and hit us very hard.
• There is a footnote to this paragraph in which Taleb cites previous
recklessness by J.P. Morgan and describes Fannie Mae as, “sitting on
a barrel of dynamite .”

34. Chapter Fifteen
• Here Taleb fleshes out his revulsion for the bell curve or the practice
of applying the bell curve to scenarios that fall within the realm of
Extremistan randomness i.e., those scenarios that define our lives.
• As per Taleb “The main point of the Gaussian (bell curve)… is, that
most observations hover around … the average; the odds of a
deviation decline faster and faster (exponentially) as you move away
from the average.”
• Taleb’s main qualm with the bell curve is that it “allows you to ignore
outliers” by reducing their likelihood to nearly zero. With
Mediocristan matters, such as human height, weight, etc, the bell
curve is applicable. But applying the same principle to Extremistan
matters, such as finances, carries considerable danger. In these
matters, outliers carry significant consequences and ignoring the
possibility of such outliers can have disastrous results. Moreover,
what occurs on average in Extremistan is not a reliable indicator of
what might occur tomorrow; outliers may not be as unlikely as the
bell curve would lead us to believe.

35. Chapter Sixteen
• Taleb introduces us to Benoit Mandelbrot, whom he has made
reference to throughout the text. Mandelbrot introduced the idea of
fractals.
• Fractality is the repetition of geometric patterns at different scales,
revealing smaller and smaller versions of themselves. Small parts
resemble, to some degree, the whole … This character of self-affinity
implies that one deceptively short and simple rule of iteration can be
used, either by a computer or, more randomly, by Mother Nature, to
build shapes of seemingly great complexity … The shapes are never
the same, yet they bear an affinity to one another, a strong family
resemblance.
• Fractals contradict the traditional concept of circles and squares, neat
geometric shapes that rarely occur in nature.

36. Chapter Sixteen
• To demonstrate the relevance of fractal randomness to the Black
Swan problem, Taleb explains, “the fractal has numerical or statistical
measures that are (somewhat) preserved across scales -- the ratio is
the same, unlike the Gaussian [bell curve] .”
• Fractal randomness, is imprecise. Its usefulness lies in the fact that,
unlike the bell curve, it does not reduce the likelihood of a dramatic
event to outlier status. To be extremely simplistic, it implies that
future events will mimic -- though not repeat -- past ones. If
something has occurred before then there is a possibility that
something of a similar nature will occur in the future.
• By emphasizing what is possible over what is likely, fractal
randomness can help us be better prepared for Black Swans. And
since these events are no longer inconceivable, they are no longer
true Black Swans; they are gray swans.

37. Chapter Seventeen
• Here Taleb laments the problems of domain specificity and how
quickly Black Swan lessons are forgotten. He recalls how, following
the stock market crash of 1987, an event that illustrated the
inappropriateness of applying the bell curve to economic matters,
“people accepted that rare events take place and are the main source
of uncertainty. They were just unwilling to give up on the Gaussian as
a central measurement tool.”
• Taleb also expounds on his disdain for the Nobel Prize in economics,
which he derides on numerous occasions throughout the book. He
notes how many winners of the prize have based their ideas on the
Gaussian model and essentially blames the prize for the widespread
application of the bell curve to business and economic matters.
• Taleb recounts the satisfaction he’s derived from needling so-called
experts and devoted supporters of Gaussian economics.

38. Chapter Eighteen
• Taleb proposes that the most easily recognizable trait of a phony is
that he attempts to take models of uncertainty that apply to one
domain -- such as the behavior of subatomic particles -- and apply
them to other domains, such as finances, that do not resemble the
models’ original purpose.
• Taleb observes a similar problem of domain specificity in those who
can ponder and find fault with theological matters but blindly accept
standard models of uncertainty as presented to them by the
“experts” (tunneling revisited). He argues that philosophers have an
additional responsibility to question any and all accepted standards,
including those which govern statistics and finances, because, “These
people are professionally employed in the business of questioning
what we take for granted”

39. Part Four
Chapter Nineteen
• Taleb sums up his guiding principles in line with regards to skepticism
and uncertainty and offers readers some final words of advice.
Namely, he advocates for taking control of one’s life saying, “You are
exposed to the improbable only if you let it control you. You always
control what you do; so make this your end.”

40. Epilogue: Yevgenia’s White Swans
Taleb concludes the story of Yevgenia Nikolayevna Krasnova,
whose second book is well-reviewed but sells poorly, much to
her publisher’s dismay. Says Taleb, “So Yevgenia’s second book
too was a Black Swan.”

41. Quoted Influentials
(In Order of Appearance)
• In the prologue, Taleb makes a case against quoting experts to
support one’s point. As he explains in a footnote on page xxvii, “It is
… naive empiricism to provide, in support of some argument, a series
of eloquent confirmatory quotes be dead authorities. By searching,
you can always find someone who made a well-sounding statement
that confirms your point of view -- and, on every topic, it is possible
to find another dead thinker who said the exact opposite.”
• But despite his stated disdain for the invocation of dead authorities,
Taleb frequently references the work of thinkers and doers in a
variety of fields whom he admires and whose work supports Taleb’s
main points. He also explores the work of those with whom he
disagrees, though perhaps not as frequently as the aforementioned
quote might lead one to believe.

42. • It would be tedious and not terribly useful to compile a list of
everyone Taleb makes passing reference to, but the following figures
are discussed in some depth. We also meet occasional abstractions as
well as fictional characters, usually (though not exclusively) of Taleb’s
invention.
• Plato: Allusions to the fourth century B.C. philosopher and his
teachings appear as early as the prologue and are referenced
repeatedly throughout the course of the book. While Taleb makes no
real assault on Plato’s character, he is highly critical of what he dubs
Platonicity, described in the introductory section of this companion
text.
• Umberto Eco: While the work of the influential Italian writer doesn’t
receive much attention from Taleb, Part I of The Black Swan bears his
name, and thus he seems worth mentioning. A contemporary writer
of fiction and essays, Eco’s work explores numerous philosophical
constructs. Taleb describes him as belonging, “to that small class of
scholars who are encyclopedic, insightful, and nondull. He has a
famously extensive library containing roughly 30,000 books.

43. • `Yevgenia Nikolayevna Krasnova: A fictional neuroscientist-turned-
author created by Taleb. Yevgenia’s hybrid manuscript confuses
publishers who frequently advise her to express herself in a more
traditional fashion and universally refuse to publish her work.
Eventually the manuscript is picked up by an unknown publisher and
becomes an unexpected hit. Readers are introduced to Yevgenia
(whose hybrid work bears some resemblance to Taleb’s own
manuscript) in Chapter Two, and she and her cohorts resurface
occasionally throughout the text.
• David Hume: An 18th century Scottish-born philosopher, Hume
argued for an empirical approach to the investigations of human
nature and moral philosophy over traditional methods of
observation and speculation. Hume’s skepticism toward traditional
philosophical approaches, as well as the anti-religious sentiments
expressed his work (sentiments he attempted to self-censor, to no
avail), elicited hostility from many of his contemporaries. Today he is
credited with being a forefather to the field of cognitive psychology.

44. • Karl Raymond Popper: A 20th century Austrian philosopher who, like
Hume, favored empirical processes of investigation over inductive
methods. Popper argued that the most conclusive evidence about a
given hypothesis can be obtained by attempts to falsify or disprove
that hypothesis rather than attempts to corroborate it. He is hailed
by Taleb and others as being of a rare breed of philosophers whose
work has tangible, practical application.
• Nero Tulip: One of Yevgenia Nikolayevna Krasnova’s lovers, Nero is a
trader who engages in a strategy he dubs “bleed” in which he loses
money at a slow, steady, predictable rate with the anticipation that
he will eventually reap enormous returns from a Black Swan event. In
addition to demonstrating Taleb’s concept of asymmetry --
maximizing the potential effect of positive Black Swans while
minimizing the potential effects of negative ones -- Nero’s narrative
also exemplifies how such tactics, while often successful, runs
counter to the biological need for consistent rewards.

45. • Fat Tony/Brooklyn Tony -- Another character in the Yevgenia
Krasnova saga. Fat Tony (or, more politely, Brooklyn Tony) is an
associate of Nero Tulip. Brooklyn Tony has made a rather lucrative
living off of giving small business loans and flipping properties. His
success is due largely to his acquired street-smarts and thinking
outside the box.
• Non-Brooklyn John/ Dr. John -- A foil to Brooklyn Tony, Dr. John is a
meticulous insurance actuary who thinks exclusively within the box.
He is the sort of person that is most vulnerable to Black Swans
because he is unable to see beyond textbook-style parameters.
Moreover, since such people are often in a position to advise others,
Taleb alleges that they are often the cause of Black Swans.
• Yogi Berra: Taleb frequently quotes the legendary baseball player
asserting, “Berra can claim to know something about randomness.” In
addition to his impressive record as a baseball player and coach,
Berra was known for his amusing and insightful quotes,
affectionately known as Yogi-isms.

46. • Henri Poincare: The famous French thinker published extensively in a
variety of scientific and mathematical disciplines. Poincare’s work on
the three body problem is considered by many to be the genesis of
chaos theory. Taleb uses this work to demonstrate how a future
events are dictated by an almost infinite array of variables. Poincare is
also credited as co-discoverer of the theory of relativity.
• Adolphe Quetelet: Taleb describes Quetelet as “one of the most
destructive fellows in the history of thought,” crediting Quetelet
with promoting widespread use of the bell curve and with promoting
homogeneity, an approach which both shunned deviations from the
norm and ignored their potential impact. Quetelet, however, limited
primarily to his Mediocristan variables. One of the statistician’s most
well known publication deals with averages in human physical
characteristics such as height, weight, chest size, etc. His observations
concerning social trends, such as suicide rate or marriage rate among
various demographics are considered a foundation for the
development of modern sociology.

47. • Benoit Mandelbrot: Polish-born mathematician best known for his
work with fractals, described in Chapter Sixteen. Taleb describes
Mandelbrot as being a close personal friend and intellectual kindred
spirit. Mandelbrot died in 2010.