The Black Swan


The Black Swan

Book Overview of The Black Swan compiled by Nassim Nicholas Taleb The Black Swan is one of the most fascinating, most challenging and most thought-prevoking books I’ve ever read. Let me point out, before going any further, that my desire for this book started as a trendy thing, because it seems this is a popular book to read by investors and investors.

However, that quickly faded, and I became very interested in the actual arguments and material that Taleb was making. One of the best things about this book is that every page is challenging (for me personally, at least). It isn’t challenging to follow (in fact, it’s very simple), but the materials is individually challenging just, because it will make you completely change the right path of nearing a topic without you even great deal of thought. Taleb is a Wharton-trained quant with trading floor experience.

Now, he encourages himself as more philosopher than finance guru, although, rumor has it he’s still fairly involved in investing activities. He also advises corporations, as well as the U.S. DOD and the State Department. My recommendation for this book has nothing to do with the fact that it has become a fad within investor circles and the financial/hedge fund world. My recommendation for The Dark Swan is dependant on its ability to transcend regular and traditional means of thinking, while at exactly the same time, stay enjoyable as the topic matter gets deeper and deeper. Enjoy this reserve review? Read a few more at our Investment Book Reviews Directory.

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  • Investment Date: 1/1/17
  • Total Funding: $10,000,000

As discussed above, today’s pension personal debt represents underpayment of benefit costs over the past 30 or more years. Given the size of most governments’ pension debt, it is acceptable to spread the price of paying it down over the next 20 to 30 years. However, money for hard times, pension programs should adopt more aggressive amortization schedules that ensure that any pension personal debt is paid in fewer than 15 years, consistent with the SOA BRP suggestions. Since 1970, the common gap between recessions has been around five years, and to avoid a potential ratcheting up of personal debt over time, government authorities should plan to make significant headway in paying off personal debt between market dips.

Lowering special discounts, extending life expectancy, and tightening amortization schedules will all increase necessary annual pension efforts. For many jurisdictions the increase would be substantial. In order to make the budget math work, governments might need to negotiate with employees and taxpayers to devise a shared-sacrifice solution that amounts the contribution of both groups.

Over the last 2 decades, many jurisdictions have made changes with their pension systems, but few have fixed pension funding comprehensively. Many jurisdictions have lowered benefits for new workers, and several have reduced benefits for current workers and retirees even. But benefit reductions will never be sufficient to repair public-pension funds only. Governments do not generally face a pension-generosity problem but rather an underpayment problem. Benefit reductions without comprehensive reforms to handle funding only serve to raise the ire of public employees and doom governments to increasing budgetary pressure and seemingly endless pension-reform debates.

The city of Houston’s 2017 pension reforms will be the best recent exemplory case of a comprehensive approach to the problem. 8 billion in pension personal debt owed to its three pension programs for law enforcement, firefighters, and municipal employees. Within the solution, the town lowered the assumed return for all three plans, tightened amortization policy, and focused on placing more income into the plans significantly.

In return, the city asked public employees to give a too to make the increased budgetary cost manageable little. 2.5 billion in benefit reductions. Since both workers and taxpayers contributed to the negotiated solution, chances are to be more durable than reforms where one group or the other bears the bulk of the cost. Houston’s reform legislation also capped future city efforts, and specified clear guidelines for how benefits and efforts would be cut back into positioning if costs ever increase above the cover.