You can’t reliably pick the winner of a horse race, you have no clue about what Wall Street is going to do, and go ahead, give me your predictions for the next war zone. Future activity based on past performance doesn’t even work for foretelling the outcome of a heads or tails coin toss.
What really happens is there is an extreme impact of certain kinds of rare and unpredictable events and humans have a tendency to find simplistic explanations for these events retrospectively. This theory has since become known as the black swan theory. The way you deal with this is not by trying to predict when the black swan will glide into view, but by building a way to survive the negative black swans, and take great advantage of the positive ones.
This is essentially a long, one-note essay, on basically diversifying, not putting all your eggs in one flimsy hopeful basket. He examines the concepts of cause and effect, or rather, cause and what we cheerfully believe is effect because we are hardwired along those lines for survival in the jungle/desert/plains, but in today’s world, the cause of any given effect is not always clear, and the effect of what we might think would be a cause is not always, if ever, what would be expected.
It is a screed against smugness, and the phenomenon of unintended consequences. It is a clear presentation of our arrogance in our beliefs about immutability and the law of averages, and how we humans tend to create a narrative — a story — around everything, so have to need to have a beginning and an ending, a cause and an effect, and how we dislike very much the idea of randomness, and will do all that we can to avoid dealing with that concept. It is a treatise on the improbable and what we tend to do about it.
The term black swan was a Latin expression: Its oldest reference is in the poet Juvenal expression that “a good person is as rare as a black swan” (“rara avis in terris nigroque simillima cygno”. Catchy, no? It was a common expression in 16th century London as a statement that describes impossibility, deriving from the old world presumption that ‘all swans must be white’, because all historical records of swans reported that they had white feathers.
Good read. Kind of long, if one is sliding into one’s Golden Years, because I grasped the principle early on. Well, hell, he tells you right out what the book is about:
The central idea of this book concerns our blindness with respect to randomness, particularly the large deviations: why do we, scientists or nonscientists, hotshots or regular Joes, tend to see the pennies instead of the dollars? Why do we keep focusing on the minutiae, not the possible significant large events, in spite of the obvious evidence of their huge influence? And if you follow my argument, why does reading the newspaper actually decrease your knowledge of the world?
You will see that, contrary to social-science wisdom, almost no discovery, no technologies of note, came from design and planning — they were just Black Swans.
If you want to know more about why you suck at being said hotshot, give the book a go. Easy reading style, thoughts nicely lined up in easily graspable reach, marching neatly down the length of the book to a properly defined conclusion. I like properly defined conclusions.