Black Swan author on the limits of statistics

Turkey -- day 1002

An excellent and accessible on-line article by Nassim Taleb (author of The Black Swan) about how to protect against improbable events.  It is always refreshing to see a stats expert warning of the discipline’s limits. 

A lot of his focus is on the current financial mess, which of course has at least some of its roots in the misuse of statistics.  Even worse, when everyone uses the same half-baked statistical analyses to assure themselves that there is little risk, they are unknowingly and unwittingly increasing the likelihood and magnitude of the pesky risk events. 

Taleb also has a way with the colorful metaphor:

A turkey is fed for a 1000 days—every day confirms to its statistical department that the human race cares about its welfare “with increased statistical significance”. On the 1001st day, the turkey has a surprise.

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