I read this book a few months ago, but it resonated with me. In particular the book critiques using the bell curve and other standard statistical techniques as if they are infallible. Many issues in our world deal in exponential or extraordinary events. Our most recent economic crisis was a series of unlikely things all conspiring to create a recession. All of this leads one to consider black swans.
A black swan is a seemingly impossible thing that occurs and causes great ruin to those who bet against it. A simple example of this is if a bank is making loans to farmers and only farmers. While it is unlikely that the bank won't make money, if all the topsoil were to simply blow away the bank would almost certainly fail. A good black swan is making it as a muscian, making it as a reality TV star, and getting on the NY Times bestseller list.
So, things to take away (in the style of the book)
Is this a measure that lives in mediocrastan?
Does this thing benefit from Black Swans?
Can one maintain a bleed strategy? (Many small losses, few HUGE wins)
Absence of proof =/=> proof of absence
Scaleability => fractals and similarity (NOT normality)
hyper-conservative "risk-taking" (reduce exposure to negative black swans)
hyper-aggressive in areas "needing caution" (Maximizing exposure to positive black swans)
skeptical about confirmations
no-nonsense/practical about academic matters
intellectual about practical matters
"Don't run for trains" It is more difficult to lose at games you set up.
Using a measure (profits) as a cause for survival is circular. (Post-ante selection bias is bad!)
Imagine the million failed people. 'I'd rather be lucky than good'
