This book is extraordinary, but not for the faint-hearted. It made a massive impact on me, to the extent that I re-branded Findlay James Chartered Accountants, incorporating a black swan logo – see for yourself at http://www.findlayjames.co.uk.
Check out the reviews on Amazon:
My laymans review is this:
In a nutshell, all financial theory is wrong, markets are not perfect, they are not rational, they are rough, random, and subject to significant, shocking events.
The Black Swan metaphor, was borrowed from David Hume’s theory of induction, in which he asked the question , “How many white Swans do you need to see, and count, to prove that all Swans are white? The answer is, you don’t know. It only takes one Black Swan, to dis-prove the theory that all Swans are white.
Likewise stock market movements, what has happened in the past proves nothing, and as regards the future, be prepared for the unexpected.
Writing this, I am thinking I need to read it again. He is a massive intellect, and he doesn’t suffer fools gladly, but he makes me laugh.
He comments in the book that his investment strategy is based around making enough money to take every third year off to catch up with his reading, which is just about the coolest thing I ever heard.