The Black Swan…

Since there is so much work to do these days, particularly in finance, the masochist in me made me venture beyond my myopic world to find some intellectual stimulus.  While I have read Fooled by Randomness, I can’t say I particularly understood it very well, and frankly most of the arguments left me with a familiar feeling I first experienced when reading Noam Chomsky.

I think part of the development of mankind involves a level of existentialism, for economics & finance this however seems to be more a description of the science’s natural disposition; just as theories are hailed as revolutionary they come tumbling down and people change admiration into contempt.  I remember as an undergraduate, the most appealing thing to me about economics, was having the ability to fundamentally question some of the principles, laws etc taught in class (basically be the wise ass who sat in class dissecting philosophies, not because I cared but because I could).  Here was a field that taunted the renegade in me.  Finally after years of being intellectually oppressed under the Indian education system, where my core function was learning and regurgitating, the gauntlet was thrown down and people dared you to disprove them.  No one theory ever seemed fool proof and everything you wanted to believe required a leap of faith.  Sound familiar?  seems like a religion doesn’t it? (thetas another topic for another day…maybe).

So Nassim Taleb’s book last year called the Black Swan is now creating bigger waves cause apparently according to some of the intellectual hippies it foresaw the fundamental problem in the methodology of analysing economic markets, society…life in general.  I haven’t read the book, and frankly I will with great skepticism, I do this not to feed an anarchist nature in me but I believe if any scholar or author should truly be given adulation and admiration you must judge him from as unbiased a position as possible; for me this is usually going to the opposite extreme of what I think of individual.  So in some convoluted manner, I guess I am saying Taleb is probably onto a fundamental way of thinking which could potentially change the way we see the world and our very nature.

So what has made me take an interest in yet another renegade in a field which seems to thrive on everyone considering themselves different and truly novel?  The clinical approach with which Taleb dissects the differences between real life and what we actually do versus statistically tests, and analysing all human actions on a normal probability, assuming people are rational, blah blah blah (read as, stuff that you hear that acts as a better sedative than a horse tranquilizer).

If you care to (the article is long) read the part somewhere in the middle on “What Is Fundamentally Different About Real Life” Interesting stuff, lets see what the book is like.

I recently read Tipping Point, which was an entertaining read, I don’t know how much I got out of the book, but it definitely made me look at certain things differently and at times question my impulsive rationale about certain occurrences in life.  I hope at some level Taleb’s book doesn’t leave me, as seems to be the norm with most of these books, more questions and less answers.  Frankly if that was all I wanted then I would stick to the greats like Sartre and Nietzsche, they have said all that can be said without ever providing an answer or a means of deriving one.

[This is funny, I just noticed that on Taleb's website he says that in his new book he is working on 'domesticating the unknown'.  Hopefully Black Swan will peak my interest enough to give some legitimacy to this gargantuan task Taleb has embarked on, and frankly if he is successful, he would undoubtedly have to be acclaimed as one of the most influential people in shaping society for the future...when you look at it like that it seems overambitious doesn't it?]