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14 July 2008

Book Review: The Black Swan

The Black Swan: The Impact of the Highly Improbable

by Nassim Nicholas Taleb

This book is definitely a useful read for anyone who has a job where they need to plan for the unexpected. This is a look at statistics and how they can fool people into believing they can safely predict future occurrences. Mr. Taleb takes examples from science and finance like the titular discover of the black swan in the 17th century and the stock market collapse in 1987 and delves into why they were not predictable.

From a business analysis and project management perspective, this book is an excellent way to get you started thinking about risks and risk management. It reminds you that past performance is not necessarily an indicator of future performance. It also explains why statistics are not sufficient for fully predicting possible risks.

For me, this book got me thinking about the unexpected occurrences that can ruin a project. You can only plan for as much as you know. There is always a risk of a Black Swan showing up to throw a monkey-wrench into your project and somehow you have to account for that possibility.