Unpredictable Math

I am currently reading Taleb’s book the Black Swan (in German „Der Schwarze Schwan“). It is a book full of clever arguments, beautiful insights, and also new views. I recommend it. Read it! You will benefit from it. It will change your view about history and science. But keep your brain switched on, and trust nobody, especially not a trader and philosopher. I think this advice would be in the spirit of the author.

The book is about something the author calls „Black Swans“, which stand for rare, unpredictable, random events with big impact. I do not really like this phrase, but cannot offer a better one. The book explains on its 400 pages what Black Swans are, why we do not see them, not even in retrospect, and why we tend to narrate them away, making up causes for the unexplainable. The history of man, and the connected history of science are full of examples, the author says. Moreover, the book goes on, though we should know better from the past, we still try to predict the future in the same way, using „bell curves“, mathematical extrapolations, and simple reasoning. Because of this sort of math bashing, the book touches me personally.

I won’t start to critizise the book here.  It is a mixture of very wise insights, and extreme statements. Decide yourself!

Ein Gedanke zu „Unpredictable Math

  1. Canadian Money

    There is nothing at all wrong with bell curves, normal distributions, 3 segma etc. They are mathematically correct and do have their place.

    Their existance, in fact, helps the knowledgable person monitor and predict when a change is happening in an important „system“.

    I’m not sure if Taleb knows this or not. He is certainly smart enough to learn. However, Black Swans sell for a much higher price, especially during bear markets.

    Antworten

Schreibe einen Kommentar

Deine E-Mail-Adresse wird nicht veröffentlicht.

Diese Website verwendet Akismet, um Spam zu reduzieren. Erfahre mehr darüber, wie deine Kommentardaten verarbeitet werden.