The Strategy for Discoverers and Entrepreneurs

From The Black Swan by Nassim Nicholas Taleb:

”[…] Contrary to social-science wisdom, almost no discovery, no technologies of note, came from design and planning—they were just Black Swans. The strategy for the discoverers and entrepreneurs is to rely less on top-down planning and focus on maximum tinkering and recognizing opportunities when they present themselves. […] The reason free markers work is because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or “incentives” for skills. The strategy is, then, to tinker as much as possible and try to collect as many Black Swan opportunities as you can.”

Can I get an amen? The Black Swan concept is central to his book. For a long time it was believed “beyond a shadow of doubt” that only white swans existed… until a black one was spotted. So much for “scientific”, “undeniable” theories.

About the book

I have also read Mr. Taleb’s previous book, Fooled by Randomness, which I enjoyed so much more. Fooled by Randomness is a rebellion against the Wall Street establishment and against financial mathematical models, forecasting and any kind of quackery which promises an accurate forecast of market performance based on analysis of the past.

No need to break a sweat looking for an example. A recent issue of Kiplinger’s Personal Finance magazine has a “top 10” list of index funds “slated” to beat the market. At the same time, Fortune Magazine is screaming “What were they smoking?” from the cover. Read the story if you’re curious “how the best minds on Wall Street lost billions.”

Mr. Taleb is a person of admirable erudition and he leaves no stone unturned. However, in The Black Swan the author is unbearably snobbish. I understand he wants to come across as a philosopher rather than a trader, but this time he went too far. I couldn’t even finish the book.