The Black Swan: The Impact of the Highly Improbable, by Nassim N. Taleb.
Chris Anderson, editor-in-chief of Wired magazine, commenting about this book, writes that “Our brains are wired for narrative, not statistical uncertainty. And so we tell ourselves simple stories to explain complex thing we don’t–and, most importantly, can’t–know. The truth is that we have no idea why stock markets go up or down on any given day, and whatever reason we give is sure to be grossly simplified, if not flat out wrong.”
A Black Swan, as defined by the author, “is [first] an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. 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.”
Taleb’s book is highly opinionated. His writing style makes it hard to follow some of his arguments, and some people find the self-references through the book arrogant and pompous. Nonetheless, that doesn’t invalidate Taleb’s arguments. I think this book is a must-read for anybody interested in improving his or her thinking processes and pondering information prior to making decisions.
Find The Black Swan: The Impact of the Highly Improbable on Amazon.