Selected Passages from The Black Swan
8 min read

Selected Passages from The Black Swan

I wrote a book review for The Black Swan by Nassim Taleb that includes my opinions about the book. This post is not that. This post is a list of passages that stood out to me.


"We build toys. Some of those toys change the world."

See: personal computers, The Bus Ticket Theory of Genius

"The Web's bottom-up feature is also making book reviewers more accountable.

While writers were helpless and vulnerable to the arbitrariness of book reviews, which can distort their messages and, thanks to the confirmation bias, expose small irrelevant weak points in their text, they now have a much stronger hand. In place of the moaning letter to the editor, they can simply post their review of a review on the Web. If attacked ad hominem, they can reply ad hominem and go directly after the credibility of the reviewer, making sure that their statement shows rapidly in an Internet search or on Wikipedia, the bottom-up encyclopedia."

See: Taleb’s website and his list of ad hominem attacks on people that gave him bad reviews.

"I am most often irritated by those who attack the bishop but somehow fall for the securities analyst-those who exercise their skepticism against religion but not against economists, social scientists, and phony statisticians."

"You can afford to be compassionate, lax, and courteous if, once in a while, when it is least expected of you, but completely justified, you sue someone, or savage an enemy, just to show that you can walk the walk."

See above: Taleb’s list of cranks and liars

"People were suddenly brainwashed to believe in the nation-state as an entity. It is remarkable how fast and how effectively you can construct a nationality with a flag, a few speeches, and a national anthem."

See: Seeing Like A State and my corresponding book review

"The library should contain as much of what you do not know as your financial means, mortgage rates, and the currently tight real-estate market allow you to put there.

You will accumulate more knowledge and more books as you grow older, and the growing number of unread books on the shelves will look at you menacingly. Indeed, the more you know, the larger the rows of unread books. Let us call this collection of unread books an antilibrary."

See: Umberto Eco, How To Travel With A Salmon

"What I call Platonicity, after the ideas (and personality) of the philosopher Plato, is our tendency to mistake the map for the territory, to focus on pure and well-defined "forms," whether objects, like triangles, or social notions, like utopias (societies built according to some blueprint of what “makes sense"), even nationalities. When these ideas and crisp constructs  inhabit our minds, we privilege them over other less elegant objects, those with messier and less tractable structures (an idea that I will elaborate progressively throughout this book)."

"I don't particularly care about the usual. If you want to get an idea of a friend's temperament, ethics, and personal elegance, you need to look at him under the tests of severe circumstances, not under the regular rosy glow of daily life. Can you assess the danger a criminal poses by examining only what he does on an ordinary day? Can we understand health without considering wild diseases and epidemics? Indeed the normal is often irrelevant."

"Then, during the summer of 1998, a combination of large events, triggered by a Russian financial crisis, took place that lay outside their models. It was a Black Swan. LTCM went bust and almost took down the entire financial system with it, as the exposures were massive. Since their models ruled out the possibility of large deviations, they allowed themselves to take a monstrous amount of risk."

See: Peter Thiel on Financial Markets and the Singularity

"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."

See: Stephen Wolfram’s cellular automata

"This kind of erudition impressed my father far more than scientific assembly-line work."

"The traditional Gaussian way of looking at the world begins by focusing on the ordinary, and then deals with exceptions or so-called outliers as ancillaries. But there is a second way, which takes the exceptional as a starting point and treats the ordinary as subordinate."

"I said earlier that randomness is bad, but it is not always so. Luck is far more egalitarian than even intelligence. If people were rewarded strictly according to their abilities, things would still be unfair-people don't choose their abilities. Randomness has the beneficial effect of reshuffling society's cards, knocking down the big guy."

See: Scott Alexander’s review of The Cult of Smart

"When I started trading foreign exchange, I befriended a fellow named Vincent who exactly resembled a Brooklyn trader, down to the mannerisms of Fat Tony, except that he spoke the French version of Brooklynese. Vincent taught me a few tricks. Among his sayings were "Trading may have princes, but nobody stays a king" and "The people you meet on the way up, you will meet again on the way down."

"Much of the perception of the importance of precocity in the career of researchers can be owed to the misunderstanding of the perverse role of this effect, especially when reinforced by bias. Enough counterexamples, even in fields like mathematics meant to be purely a “young man's game," illustrate the age fallacy: simply, it is necessary to be successful early, and even very early at that."

"Know how to rank beliefs not according to their plausibility but by the harm they may cause."

"The Black Swan asymmetry allows you to be confident about what is wrong, not about what you believe is right."

"Alas, one cannot assert authority by accepting one's own fallibility.

Simply, people need to be blinded by knowledge-we are made to follow leaders who can gather people together because the advantages of being in groups trump the disadvantages of being alone. It has been more profitable for us to bind together in the wrong direction than to be alone in the right one. Those who have followed the assertive idiot rather than the introspective wise person have passed us some of their genes. This is apparent from a social pathology: psychopaths rally followers."

"Humans will believe anything you say provided you do not exhibit the smallest shadow of diffidence; like animals, they can detect the smallest crack in your confidence before you express it. The trick is to be as smooth as possible in personal manners. It is much easier to signal self-confidence if you are exceedingly polite and friendly; you can control people without having to offend their sensitivity.

The problem with business people, Nero realized, is that if you act like a loser they will treat you as a loser-you set the yardstick yourself. There is no absolute measure of good or bad. It is not what you are telling people, it is how you are saying it."

"I will rapidly present Nero's idea. His premise was the following trivial point: some business bets in which one wins big but infrequently, yet loses small but frequently, are worth making if others are suckers for them and if you have the personal and intellectual stamina. But you need such stamina. You also need to deal with people in your entourage heaping all manner of insult on you, much of it blatant. People often accept that a financial strategy with a small chance of success is not necessarily a bad one as long as the success is large enough to justify it. For a spate of psychological reasons, however, people have difficulty carrying out such a strategy, simply because it requires a combination of belief, a capacity for delayed gratification, and the willingness to be spat upon by clients without blinking. And those who lose money for any reason start looking like guilty dogs, eliciting more scorn on the part of their entourage.

Against that background of potential blowup disguised as skills, Nero engaged in a strategy that he called "bleed." You lose steadily, daily, for a fong time, except when some event takes place for which you get paid disproportionately well. No single event can make you blow up, on the other hand-some changes in the world can produce extraordinarily large profts that pay back such bleed for years, sometimes decades, sometimes even centuries."

"So from a narrowly defined accounting point of view, which I may call here "hedonic calculus," it does not pay to shoot for one large win.

Mother Nature destined us to derive enjoyment from a steady flow of pleasant small, but frequent, rewards. As I said, the rewards do not have to be large, just frequent-a little bit here, a little bit there. Consider that our major satisfaction for thousands of years came in the form of food and water (and something else more private), and that while we need these steadily, we quickly reach saturation."

"Every morning you leave your cramped apartment in Manhattan's East Village to go to your laboratory at the Rockefeller University in the East Sixties. You return in the late evening, and people in your social network ask you if you had a good day, just to be polite. At the laboratory, people are more tactful. Of course you did not have a good day; you found nothing. You are not a watch repairman. Your finding nothing is very valuable, since it is part of the process of discovery-hey, you know where not to look. Other researchers, knowing your results, would avoid trying your special experiment, provided a journal is thoughtful enough to consider your "found nothing" as information and publish it."

"People in professions with high randomness (such as in the markets) can suffer more than their share of the toxic effect of look-back stings: I should have sold my portfolio at the top; I could have bought that stock years ago for pennies and I would now be driving a pink convertible; et cetera. If you are a professional, you can feel that you "made a mistake," or, worse, that "mistakes were made," when you failed to do the equivalent of buying the winning lottery ticket for your investors, and feel the need to apologize for your "reckless" investment strategy (that is, what seems reckless in retrospect).

How can you get rid of such a persistent throb? Don't try to willingly avoid thinking about it: this will almost surely backfire. A more appropriate solution is to make the event appear more unavoidable. Hey, it was bound to take place and it seems futile to agonize over it. How can you so? Well, with a narrative. Patients who spend fifteen minutes every day writing an account of their daily troubles feel indeed better about what has befallen them. You feel less guilty for not having avoided certain events; you feel less responsible for it. Things appear as if they were bound to happen.

If you work in a randomness-laden profession, as we see, you are likely to suffer burnout effects from that constant second-guessing of your past actions in terms of what played out subsequently. Keeping a diary is the least you can do in these circumstances."

"This, perhaps, is true self-confidence: the ability to look at the world without the need to find signs that stroke one's ego."

"a. We focus on preselected segments of the seen and generalize from it to the unseen: the error of confirmation.

b. We fool ourselves with stories that cater to our Platonic thirst for distinct patterns: the narrative fallacy.

c. We behave as if the Black Swan does not exist: human nature is not programmed for Black Swans.

d. What we see is not necessarily all that is there. History hides Black Swans from us and gives us a mistaken idea about the odds of these events: this is the distortion of silent evidence.

e. We "tunnel": that is, we focus on a few well-defined sources of certainty, on too specific a list of Black Swans (and not at the others that do not easily come to mind)."

"Sextus represented and jotted down the ideas of the school of the Pyrrhonian skeptics who were after some form of intellectual therapy resulting from the suspension of belief. Do you face the possibility of an adverse event? Don't worry. Who knows, it may turn out to be good for you.

Doubting the consequences of an outcome will allow you to remain imperturbable. The Pyrrhonian skeptics were docile citizens who followed customs and traditions whenever possible, but taught themselves to systematically doubt everything, and thus attain a level of serenity. But while conservative in their habits, they were rabid in their fight against dogma.

Among the surviving works of Sextus's is a diatribe with the beautiful title Adversos Mathematicos, sometimes translated as Against the Professors. Much of it could have been written last Wednesday night!"