The Black Swan

I borrowed this book from

sw_aadisht

some six months back. It was only a month or so back that I finally started reading it. And after several false starts, and stoppages, I’m nearing the end. It’s a truly amazing book. Contains several insights about several seemingly unrelated things. And it’s extremely well-written and easy to read. Let me quote a few paragraphs from the book

American culture encourages the process of failure, unlike the cultures of Europe and Asia where failure is met with stigma and embarrassment.
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In Japanese culture, which is ill-adapted to randomness and badly equipped to understand that bad performance can come from bad luck, losses can severely tarnish someone’s reputation. People hate volatility, thus negage in strategies exposed to blowups, leading to occasional suicides after a big loss.
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Dictatorships that do not appear volatile, like, say, Syria or Saudi Arabia, face a larger risk of chaos than, say Italy, as the latter has been in a state of continual political turmoil since the Second War.

I learned about this problem from the finance industry, in which we see “conservative” bankers sitting on a pile of dynamite

And all these quotes are from a single page! And this is not all. I’m not sure when exactly in 2007 the book was released but Taleb talks about the fact that even a small negative impact to the world financial system can lead to huge losses. He says there has been way too much consolidation in the financial industry, and that a small number of banks are sitting on large risks.

I urge you to pick up the book and read it. Oh, and if this helps, I intend to return the book to aadisht this weekend.