Tuesday, 18 November 2008

Fooled by Randomness

Title: Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

Author: Nassim Nicholas Taleb

Number of pages: 316

Started: 8 November 2008

Finished: 18 November 2008

Opening words:

“This book is about luck disguised and perceived as non-luck (that is, skills) and more generally randomness disguised and perceived as non-randomness. It manifests itself in the shape of the lucky fool, defined as a person who benefited from a disproportionate share of luck but attributed his success to some other, generally precise reason.”

Plot summary:
If the prescriptions for getting rich that are outlined in books such as The Millionaire Next Door and Rich Dad Poor Dad are successful enough to make the books bestsellers, then one must ask, Why aren't there more millionaires? In Fooled by Randomness, Nassim Nicholas Taleb, a professional trader and mathematics professor, examines what randomness means in business and in life and why human beings are so prone to mistake dumb luck for consummate skill. This eccentric and highly personal exploration of the nature of randomness meanders from the court of Croesus and trading rooms in New York and London to Russian roulette, Monte Carlo engines, and the philosophy of Karl Popper. Part of what makes this book so good is Taleb's ability to make seemingly arcane mathematical concepts (at least to this reviewer) entirely relevant in evaluating and understanding everything from the stock market to the success of those millionaires cited in the aforementioned bestsellers. Here's an articulate, wise, and humorous meditation on the nature of success and failure that anyone who wants a little more of the former would do well to consider. Highly recommended.

Summary taken from Amazon.com

What I thought:
I enjoyed this book. I tend to like books that challenge the way we think about things or look at the world. I thought this book made some really good points about the way we view things and that we are often looking for certainty or to be able to predict the future etc when such things don’t necessarily exist.

However, I thought the author was incredibly arrogant and somewhat dismissive of anything or anyone that went against his view. It take a certain type of ego to write this sort of book an in that sort of way and whilst I enjoyed the subject matter, I found the author’s approach grating and unnecessary.

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