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

4.01 of 5 stars 4.01  ·  rating details  ·  14,267 ratings  ·  710 reviews
[Taleb is] Wall Street's principal dissident. . . . [Fooled By Randomness] is to conventional Wall Street wisdom approximately what Martin Luther's ninety-nine theses were to the Catholic Church.
--Malcolm Gladwell, The New Yorker

Finally in paperback, the word-of-mouth sensation that will change the way you think about the markets and the world.This book is about luck: more...more
Paperback, 368 pages
Published August 23rd 2005 by Random House Trade Paperbacks (first published 2001)
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Yeah, you see. I’ve just checked and most of the other reviews of this book do pretty much what I thought they would do. They complain about the tone. This guy is never going to win an award for modesty and he probably thinks you are stupid and have wasted your life. And it gets worse – like that quote from Oscar Wilde that has tormented me for years: “Work is the refuge of people who have nothing better to do”, this guy reckons that if you work for more than an hour or so per day you are probab...more
Riku Sayuj

The modern world regards business cycles much as the ancient Egyptians regarded the overflowing of the Nile. The phenomenon recurs at intervals, it is of great importance to everyone, and natural causes of it are not in sight.

~ John Bates Clark, 1898

Yeah, right!

~ Nassim Nicholas Taleb, 2001
Renowned statistician George Box once said, “All models are wrong, but some are useful.” The author of Fooled by Randomness is all over the first part of this statement, but apparently doesn’t consider it part of his job as an iconoclast to say anything about the second. Taleb goes to great lengths to point out how some of the original assumptions made in investments and finance have blown up in people’s faces. Yes, unusual events do happen more often than a normal distribution suggests. Yes, re...more
I love the theses that he has in the book, but jesus christ, this is horribly written.

I think the powerful ideas could have been condensed down to a New Yorker length article:
1. We tend to see the "survivors"; by hiding those who have failed, our understanding of many systems is skewed.
2. Leveraged betting on conventional wisdom provides consistent returns in the short run, but can explode when something weird happens (his "black swan idea").
3. You can reproduce the results of many systems by s...more
"Expect the unexpected" -- an aphorism that almost completely summarises the book. Cliches exist for a reason, but 196 pages later I feel the point has been well made.

Taleb is a stock market trader. As a trader, he believes that there is no way in general to predict the stock market -- that there are so many variables that the resulting stock price is indistinguishable from pure noise. Unfortunately, his profession is filled with people who believe that they *can* predict the market. In fact, so...more
Dec 14, 2008 Carolyn rated it 5 of 5 stars Recommends it for: everyone. The concepts in this book are invaluable for those developing critical thinking skills.
Shelves: economics
This is the best book I have read all year, closely followed by his other book, The Black Swan. Fooled by Randomness is one of that select group of books that changes your mind entirely. Once I read it I could never look at the world the same again, nor could I take my old assumptions for granted.

We are so accustomed to looking at the world and seeing patterns that we do not always understand that we may be seeing randomness and imposing a pattern where none belongs. Taleb talks about the variou...more
One of my business school professors raved about this book. I expected to get an entertaining and informative investment professional's take on how our irrational tendencies keep us from applying basic probabilities that would help us make better decisions.

Instead, this book read like a pretentious, ranting diary. In the introduction, the author brags that he ignored nearly all of the suggested changes his book editors made (he labels book editors along with journalists, MBAs, and most social sc...more
Kai Schreiber
A nice thesis (humans are unable to correctly assess risk and probability and therefore fall into all kinds of traps) wrapped in pompous and befuddled writing. At times the logic and flow is so jumpy and flawed that I thought there was something wrong with my copy.

There is something wrong almost constantly, but the biggest WTF moment came for me, when Taleb, who constantly reminds the reader that everybody else is a fool and it's just him who has insight and the tools to master probability, talk...more
This is a book by a trader with an intellectual streak -- although he might say he’s an intellectual with a trading streak. Nassim Taleb's book is highly idiosyncratic and personal, which is both what lends it a lot of its interest and what occasionally makes it irritating. Overall, he does not seem like a likeable man, and in fact is probably proud of that fact. But, it does get kind of tiresome to be told for the 5th or 10th time how unimpressed by wealth he is. In fact, he is clearly impresse...more
Sarah Clement
This book is a lot of painful reading for little reward, as there was nothing truly remarkable or revelatory about Taleb's insights. Most of what can be said of this book has already been said by other reviewers on GoodReads, so I will just briefly recap here: he is incredibly unlikeable, and infuses the book with anecdote and a general disdain for most of humanity, while exemplifying many of the characteristics he rails against. His insights will not be news to anyone who has read even a little...more
Marvin chester
You can't learn anything from this book; it's just a rant. The author's message is an incessant din of, 'I'm smart. They're stupid'

"trading rooms were populated by people ..devoid of any introspection, flat as a pancake..." p28

"these scientists ... devoid of the smallest bit of practical intelligence" p 30

The author likes the word 'devoid'.

"I was saved from the conversation of MBAs."

"but i could not conceal my disrespect ... as he could not make out the nature of my conversation" p.31

"a journal...more
Tony Cohen
This is one of the best books I have ever read. It has everything in a book that I yearn for....interesting ideas...some of which I don't grasp because hey are too clever for me...a smug narrator who seemingly knows more than everyone else...and a well-written and pleasing style.

Here is the crux of the book. Brokers have a very common weakness. They fail to appreciate that the likelihood of an event can not be the only factor one looks at when deciding to make a move. The likelihood, and the cos...more
Steve Bradshaw
Nassim Taleb has to be a strong contender for the title of Most Pretentious Author of the 21st century. Despite his obnoxious writing style, he has created an interesting synthesis of existing ideas that speak powerfully to societies inability to appreciate the role of chance when looking back at events, and to underweight the probability of extremely unlikely outcomes.

Unfortunately these ideas come littered with classical references, none of them properly explained, that do little to strengthe...more
Mar 31, 2014 Stefanos rated it 4 of 5 stars
Recommended to Stefanos by: Trevor
Shelves: philosophy, science
While reading this book some odd prejudices from my childhood, a long gone and forgotten, came to mind. Wearing a particular t-shirt made my basketball team lose; crossing my fingers the night before a test and going to school from a particular hidden route helped me score higher; or that whenever i learned a new word i noticed that many people started using it as well, as if they just learned it themselves or probably copying me.
Idiotic as these ‘observations’ were, looking back at them some y...more
In his witty, informative, sober yet often ludicrous and sarcastic tone, Taleb expounds on the simple yet unsolvable problem of inference. This problem is as old as Solon at least, who already warned against the human tendency to infer from little empirical evidence rules and predictions expected to apply in general context, especially in the future. The echo of Solon's warning comes across the book and is embodied by Popper's (naive, as some say) falsificationism and his suggestion not to take...more
Greg Linster
Using his trademark aphoristic bent, Friedrich Nietzsche wrote: “Arrogance in persons of merit affronts us more than arrogance in those without merit: merit itself is an affront”. I’ve come to realize that some people find Nassim Taleb’s arrogance quite repugnant, but, personally, I find it rather charming. I suspect that the same people who find Taleb’s arrogance off-putting are the people who wish they possessed a shred of his erudition. Nietzsche was certainly on to something; it’s hard to av...more
This is a reread of Taleb's first discourse on probability and markets, which I wanted to reread after reading The Black Swan earlier this year. I still found the ideas important and well organized. There was just a hint of the author's attitude that literally permeated the second book, making this a much more effective read.

Anyone reading both books might get the impression that this guy is an infalible trader. He is, if there are regular market catastrophes. He started his own fund based larg...more
The author says right at the beginning in his 20+ page preface that the book is intentionally left unstructured so that it may resemble the flow of his thoughts as and when they popped up. And that I believe is the problem. He seems to go around in circles repeating his ideas and thoughts, coming back to the same points, pulling in unrelated anecdotes while already inside one, leaving thoughts hanging without any form of closure, and generally ensuring you end up doing exactly what he says you s...more
Well, if you can get beyond the fact that Nicholas T Taleb most likely hates you, his arguments are valuable. The idea of the book is that we discount the true probablistic picture of most situations and make decisions that we think are smarter than they are... we are lucky enough just not to get caught. He hates people who think they made wise decisions but were, in fact, just fortunate not to experience the bad outcomes. Hates them. They are so incredibly stupid. The neat idea I found myself c...more
May 17, 2007 CJ rated it 3 of 5 stars Recommends it for: people who think they are better than journalists, pundits, economists, or sociologists
The book is an easy read and most of what it offers can be gleaned from undergraduate level statistics and psychology classes. Specifically: a catalog of unintuitive statistical results, and explanations/anecdotal examples of many psychological biases, and a lecturer with a swollen ego.

I read a used copy of this book lent to me by a friend who peppered it with wonderful marginalia. My favorite of these captured the narrative tone well in response to the author making a fairly mild generalizatio...more
Colin Bendell
The bottom line is that our brains are really hyper active pattern matchers. We see patterns where they don't really exist and we have an over tendancy to see causation where it isn't (aka "hind-sight" / "survivor" bias). Put another way, our brains are ill equipped to handle probability and decision making in uncertainty. We tend to believe stupid things and make poor decisions because of these deficiencies. It takes a lot of extra work to overcome our own propensities toward silliness.
Vasil Kolev
Увлекателна и приятна книга. Основната и идея може да се повтаря твърде много из нея, но поне според мен авторът не е прекалил и всичките примери са пходящо направени. Винаги може да се намери човек за какво да се заяде, но като цяло изводите и идеите са си съвсем правилни.

Препоръчвам я на всички, които са им интересни икономиката, финансите и като цяло ролята на случайността в живота. Книгата би подействала и доста приземяващо на хора, които се взимат твърде насериозно.
Shehab Hamad
nassim nicholas taleb, the improbable best selling author of the black swan believes that success is illusionary (at times it seems he believes everything is illusionary – it’s all random, all luck!). his main thesis is that luck is often behind what we normally perceive to be success and that humans are hard-wired to under-estimate the role that randomness plays via various biases:

sample bias. (over-generalizing or generalizing based on unsuitable data sets, winners only for instance). hindsigh...more
The author continually pontificates that random events happen in life. But he neither uses actual events or statistics. He merely invents parables to expound on his points. He continues down this train of thought until he reaches the conclusion that the ultimate success and failure of some people can primarily be explained by luck. The author’s most famous exclamation is that the 40 years of investment success experienced by Warren Buffett, "may be by chance." He claims that with the number of i...more
I would have given the book 5 stars but there were some grammatical and syntax errors that bothered me. I guess I am used to editors who fix that kind of thing. But maybe that's not a good thing, maybe language irregularities are the way a language grows, so what one person calls an error another could call progress. But hey, don't we need some kind of standard, I mean where is the stability?
Aha - that is one of the issues this book tackles - the randomness of events that shakes us up. We expec...more
The problem I had in reading this book was that I couldn't remove two comedy characterisations from my mind. The first was that the narrative voice reading the text in my head was that of Artie Ziff, he of the "busy hands" on The Simpsons.
The second was the Harry Enfield character who is "Considerably Richer Than You". If you bumped into Mr Taleb at a dinner party, you'd be expecting him to quickly interrupt your conversation with the observation, "Excuse me, I couldn't help but noticing that I...more
The main point of this book is this: people assign meaning, and find patterns, in phenomenon that are simply random. The author himself says the basic framework of his idea is this: We favor the visible, the embedded, the personal, the narrated, and the tangible; we scorn the abstract.

The majority of the book focuses on specific examples of people assigning purposeful meaning to random results. The author's favorite examples are taken from his career as a financial trader.

Some of the stories are...more
Lars J. Nilsson
A really enjoyable book although somewhat idiosyncratic and un-even. The author does not apologize though and have even refused to even it out for the later editions. That way it stays personal and interesting. Another word on the style, it is easy to misread it as an attack and only see the snark, whereas the author is failry clear about his goals, he puts them clearly down, but it's easy to loose them on the way. I didn't care though, as I found it hilarious at times.

The content is about the r...more
Two years ago, I happened upon "The Black Swan" by Nassim Nicholas Taleb when I was wandering around a Barnes & Noble bookstore perusing various tables. I had been looking for material on the role chance plays in our life, and I accidentally came across Taleb’s book, about how randomness permeates our life, at a sale table. The details of my acquisition of the book lent credibility to its thesis.
Taleb is influenced by Karl Popper and spends many pages in "The Black Swan" and a book written...more
Jeremy Lyon
Some authors' personalities suffuse their books. This can be both good and bad: Steven Johnson, for example, seems like the kind of guy that I'd love to sit next to at a dinner party: funny, smart, interesting and amiable.

Nassim Taleb, on the other hand, seems like the kind of guy I'd rather avoid. In this book he tells us how little he is impressed by people with money, while carefully enumerating how many people with money he knows. His detailed descriptions of his own maverick path stink of...more
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A little repetitive? 3 34 Jul 09, 2013 10:44PM  
  • The (Mis)Behavior of Markets
  • Irrational Exuberance
  • The New Market Wizards: Conversations with America's Top Traders
  • When Genius Failed: The Rise and Fall of Long-Term Capital Management
  • Against the Gods: The Remarkable Story of Risk
  • Fooling Some of the People All of the Time: A Long Short (and Now Complete) Story
  • Security Analysis: Principles and Technique
  • Stocks for the Long Run: The Definitive Guide to Financial Market Returns and Long-term Investment Strategies
  • Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street
  • Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor
  • Devil Take the Hindmost:  A History of Financial Speculation
  • More Money Than God: Hedge Funds and the Making of a New Elite
  • Reminiscences of a Stock Operator
  • Common Stocks and Uncommon Profits and Other Writings
  • A Random Walk Down Wall Street
  • The Most Important Thing: Uncommon Sense for the Thoughtful Investor
  • One Up On Wall Street: How To Use What You Already Know To Make Money In The Market
  • Manias, Panics, and Crashes: A History of Financial Crises
Taleb has devoted his life to problems of uncertainty, probability, and knowledge. He spent two decades as a trader before becoming a philosophical essayist and academic researcher in probability theory. Although he now spends most of his time either working in intense seclusion in his study, or as a flâneur meditating in cafés across the planet, he is currently Distinguished Professor of Risk Eng...more
More about Nassim Nicholas Taleb...
The Black Swan: The Impact of the Highly Improbable Antifragile: Things That Gain from Disorder The Bed of Procrustes: Philosophical and Practical Aphorisms Dynamic Hedging: Managing Vanilla and Exotic Options Force Et Fragilitéréflexions Philosophiques Et Empiriques

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“Heroes are heroes because they are heroic in behavior, not because they won or lost.” 38 likes
“Those who were unlucky in life in spite of their skills would eventually rise. The lucky fool might have benefited from some luck in life; over the longer run he would slowly converge to the state of a less-lucky idiot. Each one would revert to his long-term properties.” 11 likes
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