‎fooled By Randomness On Apple Books

My guess is that it is intentional, because stories seem to impress us deeper than the facts. This chapter is about how a small advantage in life can translate into a highly disproportionate payoff, or, more viciously, how no advantage at all, but a very, very small help from randomness, can lead to a bonanza. One vicious attribute is that the longer these animals can go without encountering the rare event, the more vulnerable they will be to it.

Drawing on his own groundbreaking work, Silver examines the world of prediction, investigating how we can distinguish a true signal from a universe of noisy data. This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized Fooled by Randomness as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent.

Other Books In This Series

Taleb emphasizes how we tend to only accept randomness in our failures, never in our successes. He discusses concepts like Monte Carlo math, Russian roulette, the Pólya process, nonlinearity and the human brain, and Buridan’s donkey. Our tendency to favor the visible, narrated, and neat models, leads us to being fooled by randomness.

• Things you might not realize were randomness and how you deal with it in your life.
• Consider those hair-splitting decisions you fret over, looking for more rationale, more data, support from colleagues.
• I went into this book seeking to be enlightened and came back out depressed.
• We all know markets rise and fall, but when should you pull out, and when should you stay in?
• He could have enlightened us about financial trading by giving us examples of how traders think on specific trades.
• This website uses cookies to improve your experience while you navigate through the website.
• In any given cycle, certain places will be dangerous, certain trading strategies will be fruitful, etc.

There is a lot I have still to learn, but his work has been very helpful in setting me on a path. The business of the news is to entertain, not to present the accurate and well-balanced picture of the world; and most “experts” have the abysmal track records of failed predictions. Even more, behind the glamorous façade, they may struggle with life-threatening challenges. The best of us are not the infallible ones, but those who are acutely aware of their fallibility, and always take it into consideration in their decision making. From this perspective, Nassim Taleb is one of the smartest public intellectuals of our time. His thought is able to cut through deep piles on nonsense and get to the essence of things, even though some critics seem to be offended by his outspokenness.

Fooled By Randomness Summary

People tend to underestimate the probability of black swan events and make themselves vulnerable when such events occur. The book contains many interesting examples of common biases and logical fallacies, but it’s buried in a lot of bluster and fluff about how smart the author 8 Stocks You Will Want To Own Forever is. While it was likely groundbreaking when it was published in 2004, its ideas have since permeated into the mainstream. Reading it in 2018, the ideas feel neither novel nor original. Thinking Fast and Slow covers the same material with more depth and better writing.

They make them at the dinner table, or in a meeting room, where personal history, your own unique view of the world, ego, pride, marketing, and odd incentives are scrambled together. In The Psychology of Money, award-winning author Morgan Housel shares 19 short stories exploring the strange ways people think about money. If nothing else, you will certainly know a lot about Nassim Nicholas Taleb when you have finished reading the book.

More Books By Nassim Nicholas Taleb

A common criticism in reviews is that the book is way too long; suggestions are somewhere between a paragraph , a New Yorker article and 50 pages. In the preface, Taleb writes that he « hates books that can be easily guessed from the table of contents « . And so it is a bit obscure what kind of book Taleb wants this to be.

An example would be personal relationships or being at the right place at the right time. For me, the issue isn’t so much that Mr. Taleb is wrong in his analysis. Taken to its logical extreme — something Mr. Taleb is happy to do — his stance strongly implies that it’s pointless to even try to forecast things like stock prices or economic trends. Nor, he seems to be saying, should we even bother attempting risk management, since we always miss the big thing that winds up really mattering. As a person ages, their life expectancy increases based on the fact that they haven’t died. When people talk about life expectancy being 73, that’s the unconditional life expectancy at birth.This number is based on the average of the entire population.

Friend Reviews

Most decisions are not risk-based, they are uncertainty-based and you either know you are ignorant or you have no idea you are ignorant. Probability is not a mere computation of odds on the dice or more complicated variants; it is the acceptance of the lack of certainty in our knowledge and the development of methods for dealing with our ignorance. Outside of textbooks and casinos, probability almost never presents itself as a mathematical problem or a brain teaser.

According to Taleb, most of this price activity is purely random, pointless to predict and futile to explain. The flip side is the tendency of markets to exhibit extreme, unusual behaviour that confounds conventional theory. If Taleb has a core belief, it is that `I may be a fool, but my edge is that I know I am’.

Reading Suggestions

The only thing that could be useful in this book for value investors is its emphasis of trying to estimate the probability of future expectations of the prospective security. worth the read, if you after a pithy introduction to math and probability. Things you might not realize were randomness and how you deal with it in your life. If you want someone with true mastery to comprehensively guide you through better decision making, read Daniel Kahneman’s Thinking Fast and Slow. As someone who reads a lot of books on this and other subjects, I found this to be a waste of time and not deserving of the praise it received. Taleb’s master work and must read is The Black Swan and it’s amazing.

Taleb writes incredibly smart, yet refreshingly informal, in his personal treatise on the role of randomness in life and business. Eye-opening, independent-minded and insightful – if Fooled by Randomness does its job, then you’ll walk away convinced that you know even less about how the world works than before. The tone of the book is dismissive and i-am-intelligent-you-are-stupid pedantic. The author lacks clearly the skills of providing an captivating narrative.

Editions

And as I read I had the growing feeling that the book could have been conveniently summarised in a dozen and a half bullet points with a few anecdotes tacked on for amusement. This naturally led me to resent both the time I spent reading it and the author for stretching a good magazine article into book length. He could have enlightened us about financial trading by giving us examples of how traders think on specific trades.

The other books in the series are The Black Swan, Antifragile, Skin in the Game,and The Bed of Procrustes. The humble message is that we are all Fooled by Randomness, but few of us know it. Eventually the aim is not to become a cold, rational human calculator , but to learn how to live with our humane weaknesses and perhaps every now and then make better decision than other people who have not read books like this one.

Wow Academic At Times, But Very Thought

But generally speaking, I think you should be able to live out the ideas you share. It’s better to value old, distilled thoughts than “new thinking” because for an idea to last so long it must be good. One common theory for why people pursue leadership is because of “social emotions” which cause others to be influenced by a person due to small, almost imperceptible physical signals like charisma, gestures, and gait. This is my book summary of Fooled by Randomness by Nassim Nicholas Taleb.

Reviewed by: Jesse Pound