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The tipping point for the black swan
June 2, 2008
Getting the title of your book into common parlance - as Malcolm Gladwell did with The Tipping Point and Sebastian Junger did with The Perfect Storm - is a good way to measure success in the publishing industry.
Nassim Nicholas Taleb has now joined these luminaries with his bestseller The Black Swan: The Impact of the Highly Improbable. According to Bryan Appleyard in The Sunday Times, Taleb has secured a $4m advance for his next work, which is pretty good for a man who specialises in statistics and probability.
The title comes from the surprise dealt to Europeans when black swans were found in Australia. Guided by induction, they had believed that all swans were white. He uses this example to point out that unusual events do occur, despite the human propensity to discount them, and that some have a huge impact.
Taleb is also scornful of almost all professionals and specialists - from economists to bankers and journalists. He tells Appleyard that he would not employ Ben Bernanke, the Federal Reserve chairman, “to drive my car”.
David Wighton, my former FT colleague, reports that Taleb is more likeable in the flesh than on paper.
Anyway, nice guy or not, Taleb has unquestionably broken through to the popular consciousness. Two people have used the phrase “a black swan” to me recently in contexts other than finance.
In fact, the phrase “black swan” seems to be in danger of suffering a similar fate to “perfect storm” in being banded about inappropriately to cover all kinds of things that do not really fall into the category. It could well overtake the latter as the catch-all phrase for “something bad and a bit unusual”.
Taleb himself points out that he does not just mean a rare or unexpected event but one that that is rare and has a big impact, financial or otherwise. But misquotation is a small price to pay for fame and fortune.
I read the Black Swan piece, quite inciteful I thought tbut then being an engineer I understood it. I think he was 100% correct in saying that people simply don’t understand the complex world we live in and that just around the corner disaster or opportunity awaits and as ever the choice is ours. If we fight the wave we will be gone, well engineers won’t but as for the rest I’m not nearly so sure, who really needs economists in a world of 3-D plagiarism? Google the words Shell Boffin Sinclair and choose “I’m feeling lucky” ….. maybe after reading it you will read about Black Swans on ponds in a slightly different light. Funnily enough the ideas came from watching the waters of “Swanny Ponds” in Dundee. I don’t think Nassim comprehends the concept of what is possible with infinity either if that makes you feel any better. Of course we will need economists to plan how to change from the present way economies run to the new way but you’d better start thinking about these things pretty quick and you’d better start looking for a new profession soon after. Have you ever considered engineering? Best Regards John
Posted by: John Sinclair | June 2nd, 2008 at 7:52 am | Report this commentLooking for the next black swan on the horizon? My guess is that it will be buyouts of pension funds. What is “finance” anyway? The art of passing money from hand to hand until it finally disappears?
Capital is the ideal target for dishonesty and scams. Do some people (Americans?) basically lack respect for capital and fail to realize how dire the consequences of the destruction (or loss) of capital can be?
Posted by: J.J. | June 2nd, 2008 at 10:16 am | Report this commentIn fact “The Black Swan” already exists in common parlance - in Yorkshire, England, where there is an historical old hostelry in Wetherby called The Black Swan”, in common parlance always referred to as The Mucky Duck. JFI in case anyone is ever up that way.
Posted by: J.J. | June 2nd, 2008 at 2:45 pm | Report this comment