It is now time for a few last words.
Half the time I am a hyperskeptic; the other half I hold certainties and
can be intransigent about them, with a very stubborn disposition. Of
course I am hyperskeptic where others, particularly those I call bildungsphilisters,
are gullible, and gullible where others seem skeptical. I am
skeptical about confirmation—though only when errors are costly—not
about disconfirmation. Having plenty of data will not provide confirmation,
but a single instance can disconfirm. I am skeptical when I suspect
wild randomness, gullible when I believe that randomness is mild.
Half the time I hate Black Swans, the other half I love them. I like the
randomness that produces the texture of life, the positive accidents, the
success of Apelles the painter, the potential gifts you do not have to pay
for. Few understand the beauty in the story of Apelles; in fact, most people
exercise their error avoidance by repressing the Apelles in them.
Half the time I am hyperconservative in the conduct of my own affairs;
the other half I am hyperaggressive. This may not seem exceptional, except
that my conservatism applies to what others call risk taking, and my
aggressiveness to areas where others recommend caution.
I worry less about small failures, more about large, potentially termi2
9 6 THE END
nal ones. I worry far more about the "promising" stock market, particularly
the "safe" blue chip stocks, than I do about speculative ventures—
the former present invisible risks, the latter offer no surprises since you
know how volatile they are and can limit your downside by investing
smaller amounts.
I worry less about advertised and sensational risks, more about the
more vicious hidden ones. I worry less about terrorism than about diabetes,
less about matters people usually worry about because they are obvious
worries, and more about matters that lie outside our consciousness
and common discourse (I also have to confess that I do not worry a lot—
I try to worry about matters I can do something about). I worry less about
embarrassment than about missing an opportunity.
In the end this is a trivial decision making rule: I am very aggressive
when I can gain exposure to positive Black Swans—when a failure would
be of small moment—and very conservative when I am under threat from
a negative Black Swan. I am very aggressive when an error in a model can
benefit me, and paranoid when the error can hurt. This may not be too interesting
except that it is exactly what other people do not do. In finance,
for instance, people use flimsy theories to manage their risks and put wild
ideas under "rational" scrutiny.
Half the time I am intellectual, the other half I am a no-nonsense practitioner.
I am no-nonsense and practical in academic matters, and intellectual
when it comes to practice.
Half the time I am shallow, the other half I want to avoid shallowness.
I am shallow when it comes to aesthetics; I avoid shallowness in the context
of risks and returns. My aestheticism makes me put poetry before
prose, Greeks before Romans, dignity before elegance, elegance before
culture, culture before erudition, erudition before knowledge, knowledge
before intellect, and intellect before truth. But only for matters that are
Black Swan free. Our tendency is to be very rational, except when it comes
to the Black Swan.
Half the people I know call me irreverent (you have read my comments
about your local Platonified professors), half call me fawning (you have
seen my slavish devotion to Huet, Bayle, Popper, Poincaré, Montaigne,
Hayek, and others).
Half the time I hate Nietzsche, the other half I like his prose.
HALF AND HALF, OR HOW TO G E T E V E N WITH THE BLACK SWAN 2 9 7
WHEN MISSING A TRAIN IS PAINLESS
I once received another piece of life-changing advice, which, unlike the advice
I got from a friend in Chapter 3,1 find applicable, wise, and empirically
valid. My classmate in Paris, the novelist-to-be Jean-Olivier Tedesco,
pronounced, as he prevented me from running to catch a subway, "I don't
run for trains."
Snub your destiny. I have taught myself to resist running to keep on
schedule. This may seem a very small piece of advice, but it registered. In
refusing to run to catch trains, I have felt the true value of elegance and
aesthetics in behavior, a sense of being in control of my time, my schedule,
and my life. Missing a train is only painful if you run after it! Likewise, not
matching the idea of success others expect from you is only painful if
that's what you are seeking.
You stand above the rat race and the pecking order, not outside of it, if
you do so by choice.
Quitting a high-paying position, if it is your decision, will seem a better
payoff than the utility of the money involved (this may seem crazy, but
I've tried it and it works). This is the first step toward the stoic's throwing
a four-letter word at fate. You have far more control over your life if you
decide on your criterion by yourself.
Mother Nature has given us some defense mechanisms: as in Aesop's
fable, one of these is our ability to consider that the grapes we cannot (or
did not) reach are sour. But an aggressively stoic prior disdain and rejection
of the grapes is even more rewarding. Be aggressive; be the one to
resign, if you have the guts.
It is more difficult to be a loser in a game you set up yourself.
In Black Swan terms, this means that you are exposed to the improbable
only if you let it control you. You always control what you do; so
make this your end.
THE END
But all these ideas, all this philosophy of induction, all these problems
with knowledge, all these wild opportunities and scary possible losses,
everything palls in front of the following metaphysical consideration.
I am sometimes taken aback by how people can have a miserable day
or get angry because they feel cheated by a bad meal, cold coffee, a social
rebuff, or a rude reception. Recall my discussion in Chapter 8 on the dif2
9 8 THE END
ficulty in seeing the true odds of the events that run your own life. We are
quick to forget that just being alive is an extraordinary piece of good luck,
a remote event, a chance occurrence of monstrous proportions.
Imagine a speck of dust next to a planet a billion times the size of the
earth. The speck of dust represents the odds in favor of your being born;
the huge planet would be the odds against it. So stop sweating the small
stuff. Don't be like the ingrate who got a castle as a present and worried
about the mildew in the bathroom. Stop looking the gift horse in the
mouth—remember that you are a Black Swan. And thank you for reading
my book.
Epilogue
YEVGENIA'S WHITE SWANS
Yevgenia Krasnova went into the long hibernation that was necessary for
producing a new book. She stayed in New York City, where she found it
easiest to find tranquillity, alone with her text. It was easiest to concentrate
after long periods during which she was surrounded by crowds, hoping to
run into Nero so she could make a snide remark to him, perhaps humiliate
him, possibly win him back. She canceled her e-mail account, switched
to writing longhand, since she found it soothing, and hired a secretary to
type her text. She spent eight years writing, erasing, correcting, venting her
occasional anger at the secretary, interviewing new secretaries, and quietly
rewriting. Her apartment was full of smoke, with papers strewn on every
surface. Like all artists she remained dissatisfied with the state of completion
of her work, yet she felt that she had gone far deeper than with her
first book. She laughed at the public who extolled her earlier work, for she
now found it shallow, hurriedly completed, and undistilled.
When the new book, which was aptly called The Loop, came out, Yevgenia
was wise enough to avoid the press and ignore her reviews, and
stayed insulated from the external world. As expected by her publisher,
the reviews were laudatory. But, strangely, few were buying. People must
be talking about the book without reading it, he thought. Her fans had
been waiting for it and talking about it for years. The publisher, who now
owned a very large collection of pink glasses and led a flamboyant
lifestyle, was presently betting the farm on Yevgenia. He had no other hits
3 0 0 EPILOGUE
and none in sight. He needed to score big to pay for his villa in Carpentras
in Provence and his dues on the financial settlement with his estranged
wife, as well as to buy a new convertible Jaguar (pink). He had been certain
that he had a good shot with Yevgenia's long-awaited book, and he
could not figure out why almost everyone called it a masterpiece yet no
one was buying it. A year and a half later, The Loop was effectively out of
print. The publisher, now in severe financial distress, thought he knew the
reason: the book was "too f***ing long!"—Yevgenia should have written
a shorter one. After a long but soothing lachrymal episode, Yevgenia
thought of the characters in the rainy novels of Georges Simenon and
Graham Greene. They lived in a state of numbing and secure mediocrity.
Second-rateness had charm, Yevgenia thought, and she had always preferred
charm over beauty.
So Yevgenia's second book too was a Black Swan.
ACKNOWLEDGMENTS
I derived an unexpected amount of enjoyment in writing this book—in
fact, it just wrote itself—and I want the reader to experience the same. I
would like to thank the following friends.
My friend and adviser Rolf Dobelli, the novelist, entrepreneur, and voracious
reader, kept up with the various versions of this text. I also built
up a large debt toward Peter Bevelin, an erudite and pure "thinking doer"
with extreme curiosity who spends his waking hours chasing ideas and
spotting the papers I am usually looking for; he scrutinized the text.
Yechezkel Zilber, a Jerusalem-based idea-starved autodidact who sees the
world ab ovo, from the egg, asked very tough questions, to the point of
making me ashamed of the formal education I received and uncomfortable
for not being a true autodidact like him—it is thanks to no-nonsense people
that I am grounding my Black Swan idea in academic libertarianism.
The scholar Philip Tetlock, who knows more about prediction than anyone
since the Delphic times, went through the manuscript and scrutinized
my arguments. Phil is so valuable and thorough that he was even more informational
with the absence of comments than he was with his comments.
I owe a big debt to Danny Kahneman who, in addition to the long
conversations on my topics of human nature (and noting with horror that
I remembered almost every comment), put me in contact with Phil Tetlock.
I thank Maya Bar Hillel for inviting me to address the Society of
Judgment and Decision Making at their annual meeting in Toronto in No3
0 2 ACKNOWLEDGMENTS
vember 2005—thanks to the generosity of the researchers there, and the
stimulating discussions, I came back having taken away far more than I
gave. Robert Shiller asked me to purge some "irreverent" comments, but
the fact that he criticized the aggressiveness of the delivery, but not the
content, was quite informational. Mariagiovanna Muso was the first to
become conscious of the Black Swan effect on the arts and sent me along
the right lines of research in sociology and anthropology. I had long discussions
with the literary scholar Mihai Spariosu on Plato, Balzac, ecological
intelligence, and cafés in Bucharest. Didier Sornette, always a phone
call away, kept e-mailing me papers on various unadvertised, but highly
relevant, subjects in statistical physics. Jean-Philippe Bouchaud offered a
great deal of help on the problems associated with the statistics of large
deviations. Michael Allen wrote a monograph for writers looking to get
published, based on the ideas of Chapter 8—I subsequently rewrote Chapter
8 through the eyes of a writer looking at his lot in life. Mark Blyth was
always helpful as a sounding board, reader, and adviser. My friends at the
DoD, Andy Marshall and Andrew Mays, supplied me with ideas and
questions. Paul Solman, a voracious mind, went through the manuscript
with severe scrutiny. I owe the term Extremistan to Chris Anderson, who
found my earlier designation too bookish. Nigel Harvey guided me
through the literature on forecasting.
I plied the following scientists with questions: Terry Burnham, Robert
Trivers, Robyn Dawes, Peter Ayton, Scott Atran, Dan Goldstein, Alexander
Reisz, Art De Vany, Raphael Douady, Piotr Zielonka, Gur Huberman,
Elkhonon Goldberg, and Dan Sperber. Ed Thorp, the true living owner
of the "Black-Scholes formula" was helpful; I realized, speaking to
him, that economists ignore intellectual productions outside their club—
regardless how valuable. Lorenzo Perilli was extremely generous with his
comments about Menodotus and helped correct a few errors. Duncan
Watts allowed me to present the third part of this book at a Columbia
University seminar in sociology and collect all manner of comments.
David Cowan supplied the graph in the Poincaré discussion, making mine
pale by comparison. I also benefited from James Montier's wonderful brief
pieces on human nature. Bruno Dupire, as always, provides the best walking
conversations.
It does not pay to be the loyal friend of a pushy author too close to his
manuscript. Marie-Christine Riachi was given the thankless task of reading
chapters in inverse order; I only gave her the incomplete pieces and, of
A C K N O W L E D G M E N T S 3 0 3
those, only the ones (then) patently lacking in clarity. Jamil Baz received
the full text every time but chose to read it backwards. Laurence Zuriff
read and commented on every chapter. Philip Halperin, who knows more
about risk management than anyone (still) alive, offered wonderful comments
and observations. Other victims: Cyrus Pirasteh, Bernard Oppetit,
Pascal Boulard, Guy Riviere, Jo?lle Weiss, Didier Javice, Andreea
Munteanu, Andrei Pokrovsky, Philippe Asseily, Farid Karkaby, George
Nasr, Alina Stefan, George Martin, Stan Jonas, and Flavia Cymbalista.
