Taleb is an economist who fancies himself an outsider and disruptor, and this 400 page book is his long explanation of a fairly simple idea that he fancies himself as having come up with: that we don’t properly assess the risk of ‘unlikely’ events in our financial system. He characterizes patterns into two categories: those where we can accurately assess the outlying instances (ie: human height on a graph will never exceed a certain figure- it would be impossible- vs the gap between rich and poor, which can be infinite and cannot be scaled the same way). The frustrating part as a middle-class non-financial analyst is that he gives solutions for what he would do with his hedge-fund instead of how Wall Street does it (a ‘barbell-style’ risk apportionment across his portfolio, with a bunch of very safe, scale-able risks and a few wild swings betting on the next big thing)- not particular helpful for a layperson. Should I just keep most of my cash in a jar under my bed and throw 10% at crypto? What would you suggest us peons do Taleb?
Beyond being way too long and written in language that isn’t easy to follow for non-statisticians, the biggest critique I have is that Taleb is unlikeable. My first real flag that I wasn’t going to like his voice was when he fabricates an example early on (a one-in-a-million bestseller book), but presents it in the same vein as the other factual and historical anecdotes he is relating. A few chapters later he tells you that this bestseller example was a fabrication, but it impacted my willingness to trust his narration (there was no need to make up an example and pretend it was truth- you could just tell us you’re creating an example). From this start he goes on to bad-mouth and make fun of financial and statistical experts and professionals, living and dead- they’re all so dumb, you see!
I had the unfortunate luck of having picked up the anniversary edition, to which Taleb had added an additional (long) chapter. I should have called time at the original ending but my completist nature led me to read the additional 100 pages. Not worth my time, or yours.
I also didn’t agree with Taleb’s opinion that whole fields of expertise- finance, statistics, law- are useless and populated with idiots. Unfortunately for Taleb, humans have created a complex world, it won’t disappear overnight and ‘common sense’ is actually not common, or able to catch the nuance of what solving a situation might require (the simplest solution that any person off the street might see might be unworkable for any number of factors- just because its simple doesn’t make it the best). There were strains in his book that I see in modern conservative movements, which distrust experts and leave us more exposed to all sorts of complex risks (think of Borat trying to whack the coronavirus with his frying pan). I am prepared to accept that the financial system as we have it structured currently is not ideal and could use a lot of reform but dismissing the whole system as dumb out of hand does nothing to solve the problem.