The book is a chronicle of events before and around the financial crisis of 2008. It is attempting to tell the story of the financial crisis in a similar fashion to the author’s best book, "When Genius Failed: The Rise and Fall of Long-Term Capital Management ". Unfortunately, this book does not come close. If you’re looking for a book similar to the story of LTCM, you’ll be sorely disappointed. The span of the coverage is so vast that inevitably leads to a shallow coverage of the events. Unlike the LTCM book, this book lacks characters and the real people. The reader never gets to know anybody beyond the media headlines.
Throughout the book, the author, perhaps intentionally, avoids passing a definitive judgment on any government official or most of Wall Street Execs. It appears, however, that he is more willing to blame free markets for the crisis. He does point out that government was partly responsible for the meltdown by forcing Fannie and Freddie to lend freely in pursuit of universal home ownership (as if credit worthiness can somehow be legislated). In many ways the book is balanced, perhaps too balanced, to the point that it feels like the author did not want to make enemies.
At the end, like many other books written about the financial crisis of 2008, it declares the end of capitalism as we know it. I’ll just remind the readers that this claim has been made many times in the past. To blame free markers for crises is to blame free will for human crimes. It’s only an excuse to avoid accepting responsibility for risky/culpable behavior.
As an unabashed supporter of free markets, I have looked everywhere for a book to provide an argument for alternatives. This is the first book I’ve encountered that provides an intellectually solid and potent argument in favor of limited government interventions where markets have arguably failed to provide optimal solutions, if any at all.
In and of itself, this is a great feat and the reason why everybody should read this book. However, the book does not offer any solution for times when government interventions have gone wrong. In my view, that is a core weakness.
Government policies can arguably influence markets to provide good solutions, even perhaps, for a long time. The issue has always been, once they’re no longer useful, it’s hard to overturn those policies. Constituencies have formed that benefit from them at the expense of general public and fiercely resist any change. Nevertheless, the book is a fun listen and has a great narration. I highly recommend it.
Previous reviewer said everything needed to be said about this book very concisely and very accurately. The below review, however, is a bit of a critique:
This is a great book about new developments in physics. It goes over the Super String Theory and Loop Quantum Gravity sufficiently for the users to grasp their relative importance and their strengths and weaknesses (for standard model read Brian Greene’s excellent book "The Fabric of the Cosmos"). The second half of the book mostly deals with the politics of the academia, particularly, in physics departments. The author is disturbed by the internal politics of these so called institutions of science. He wants to change all that so it’s a more balanced atmosphere and helpful to the progress of physics as a science.
He’s observations are right on. The only issue is that he thinks he can, or worse, should do something about this. He is asking the prominent members of String Theory community who control most physics departments in distinguish universities to be more open to other post-doc researchers that are not working on String Theory. He believes String theory is in crisis, or perhaps, the entire science of physics is in crisis.
This is certainly overblown. Many times in the past in all fields of science, most notably medicine and physics, established scientists of the field have been protective of the accepted science of the day despite all the evidence to the contrary. The right science will ultimately prevail as it always has, but to expect that String theorist heavyweights such as Leonard Susskind embrace anything other than Super-String Theory is like to expect a father stop helping his own son get into college in favor of a stranger who appears to be smarter. This is their livelihoods after all. Yes, you may expect a few people do the right thing for a few years (assuming we can even say for sure what it is), but expecting everybody to act against their self-interest at all times is being naive at best.
I guess this book is okay if it's your first book on business development, but somewhat boring if you've already read a few good books on the subject. The narrator's monotone voice is not helping either. At times you'd feel like somebody's literally going down a bullet point list of a power point presentation. The relationship between chess and business is weak at best and perhaps non-existent. Who knew a classic "support from behind" in chess means you let a group of engineers loose in an organization to be creative and come up with the next big idea. This kind of vague links can be made with just about any sport. The overall high rating by other readers is baffling to me. Maybe they saw something in the book that I didn't. Ultimately, this book isn't either enlightening or entertaining. It failed to provide a new way of looking at the marketplace and the business world as the title suggested it might.
In this book, among other things, Taleb tries too hard to prove that he's personally made it, perhaps, as an evidence of his "hyper conservative" approach to investing. I'm sure he knows that had he started his carrier in early 1930s, he would be broke before he had the opportunity to write a book about hyper conservatism. His obsession with randomness to the point of elevating it to "the reason" for almost anyone's success is border line absurd. He argues that a group of incompetent investors (20% win, 80% loss) can produce a few winners by pure luck, but he seems to ignore the other side of the argument. A group of highly competent investors (80% win, 20% loss) will produce the same results over time. The end result can not be used to label everybody a lucky fool. A competent investor will be the victim of own success since everybody will imitate his strategy causing opportunists to diminish hence requiring ever greater risk taking to match previous earnings. This endless re-use of the same formula for success is what ultimately will do him in.
In another example, he sees Microsoft vs. Apple dominance in personal computers as another random luck. Perhaps he despises economists so much he's forgot to apply basic economics to the situation. Apple didn't succeed not because people didn't know how great it was, it didn't because it was too expensive and people, myself included, couldn't afford it.
If you see randomness everywhere you look, stop looking. Making fun of business people because they're too uptight is not too convincing when it comes from somebody who has the luxury of pondering philosophical points while sipping latte in a cafe near by a Swiss ski resort. He just needs to be thankful for how lucky he is, period.
I read this book as someone in favor of free trade looking for counter arguments from someone who is not. This book, however, failed to change my view. The author makes several good arguments, but ultimately fails to see practical implication of his own views. He repeatedly uses the success of Japan and S. Korea as best evidence that protectionist policies work. In another attempt, he compares an infant industry to a human infant and argues just as an infant needs care until reaches self-sufficiency, infant industries need protection until they are capable of withstanding foreign competitions.
I see several things wrong here. First, the protectionist policies are successful precisely because other countries are not protectionists. If protectionism were to be adopted as a wholesale policy by all countries, it would certainly bring about economic disaster as companies will be squeezed to sell only to their own nationals.
Second, the comparison of infant industries to infants has some validity, but it is too simplistic to be meaningful. Trying to prove a general point using one example is dangerous since often the opposite point can be proved using a counter example.
At last, the author argues for a dynamic protectionism. That is to protect different industries at different periods for different length of times. To pretend to know where, when and for how long help must be provided is sheer madness. Governments can't plan for much simpler things, let alone, the whole economy. Besides, once a company obtained protection, it will devise everything in its power to keep it. It will choke off other potential candidates for help. In long-run, country will have only few companies or industries that will benefit from this policy and other companies or industries are choked off at their infancies. Perhaps, this is why countries like S. Korea (Samsung, Hyundai) or Finland (Nokia) have only a few companies accounting for most of their exports.
I decided to write a review after listening to the book twice and enjoying it greatly both times. I didn’t think readers were getting a fair representation of this book’s contents by just reading the previous reviews.
Perhaps this book doesn’t strike a cord with everybody. The concepts are presented intertwined with personal stories and often come across as strongly stated opinions. One will certainly appreciate the book much more if one has had his or her own fair share of struggles with the concepts of knowledge, our perception of truth, our biases in framing the truth, and ultimately the false sense of confidence that we often have as to why things are the way they are.
Unless you thought about, for example, why financial markets are ridden with extremes, or why beginners seem to be lucky, why intelligence does not seem to matter much, why some risk taking pays off, and you didn’t like the typical answers given to these questions, you probably won’t enjoy the book a whole lot.
No book can truthfully tell you how to make money. This one is no exception. The greatest benefit of this book, if it stays with you, is to make you conscious of how little you know about the reality, and how little statistics can be trusted. Hopefully, this in turn, will make you a better decision maker especially when stakes are high.
Taleb’s genius is to provide a single framework for understanding of many of our observations in mostly unrelated disciplines. He (or his narrator) may sound angry or condescending at times. Perhaps he shouldn’t, but most people would, if they subscribed to his school of thoughts and examined events around them as skeptical empiricists.
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