Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
by Nassim Nicholas Taleb
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Read in August, 2007
"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 marke...more
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 marke...more
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Read in January, 2008
recommends it for:
investors and 'traders'
just downloaded from audible.com
This was a very thought provoking and enjoyable audiobook. Anyone who invests is the stock market or thinks they are a trader should read it. It is also of general interest to people who would like to understand the impact of randomness on life.
Narrator: Sean Pratt
Publisher: Gildan Media Corp, 2008
Length: 10 hours and 1 min.
What the Critics Say
"[Taleb is] Wall Street's principal dissident....[Fooled by Randomness] is to conventional...more
This was a very thought provoking and enjoyable audiobook. Anyone who invests is the stock market or thinks they are a trader should read it. It is also of general interest to people who would like to understand the impact of randomness on life.
Narrator: Sean Pratt
Publisher: Gildan Media Corp, 2008
Length: 10 hours and 1 min.
What the Critics Say
"[Taleb is] Wall Street's principal dissident....[Fooled by Randomness] is to conventional...more
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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...more
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Read in February, 2008
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...more
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...more
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Read in June, 2008
How can you not love a book in which the author has this to say about himself as a successful Wall Street trader:
"We are a bunch of idiots who know nothing and are mistake-prone, but happen to be endowed with the rare privalege of knowing it."
Not only does this fully illustrate the knowledge to be gained from a book that illustrates, often in technical mathematical and financial terms that are difficult for laymen like me to understand, the role in which randomness plays in m...more
"We are a bunch of idiots who know nothing and are mistake-prone, but happen to be endowed with the rare privalege of knowing it."
Not only does this fully illustrate the knowledge to be gained from a book that illustrates, often in technical mathematical and financial terms that are difficult for laymen like me to understand, the role in which randomness plays in m...more
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Read in April, 2008
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 mys...more
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Read in July, 2008
This is a book that has and will continue to irritate many readers, both in its content, which argues with a lot of mainstream economic theory and practice, and in its style, which is sometimes arrogant or abrasive. And I think it's safe to say that the book's author would be perfectly well pleased to have those irritated readers shut the book and ignore what he has to say. Taleb comes across like a lot of polymath autodidacts -- he's obviously very smart, doesn't suffer fools lightly, and is h...more
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Read in September, 2007
recommends it for:
anyone thinking life is unfair
If last week somebody told me a stock market trader/mathematician can write a thrilling non fiction, I would think he is crazy. Not anymore. 'Fooled' gives me rushes as much as Dan Brown's Angels and Demons or the last chapter of Tom Clancy's Sum of All Fears, you just can't put it down. All this from a finance/maths geek!
The premise of the book is simple, and can be both humbling/alleviating at the same time. In this life we probably have underrated randomness/luck/'hokkie' by too much. We ...more
The premise of the book is simple, and can be both humbling/alleviating at the same time. In this life we probably have underrated randomness/luck/'hokkie' by too much. We ...more
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Read in April, 2008
recommended to Sophie by:
Boyfriend
I am not an economist or a trader so I had to spend a great deal of time and effor to actually understand the book. I know that this book has mixed reviews; many feel the author is too arrogant while some feel that he has made some salient points about today's investment traders.
Since I am no expert on trading, I do not want to make any strong comments about the book. All I can say is that from a non-trader's point of view, the book has only one idea ; and that is clearly stated in the title...more
Since I am no expert on trading, I do not want to make any strong comments about the book. All I can say is that from a non-trader's point of view, the book has only one idea ; and that is clearly stated in the title...more
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Read in July, 2008
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 care...more
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 care...more
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Read in February, 2008
Locks of good anecdotes in this book that are buried in terribly boring text. I couldn't read more than 3 pages without my eyes glazing over.
Overall, the theme of the book is that most events are random. Though people think things happen for a reason, in truth there may not be a reason.
A few exerps that I found interesting:
"Imagine a donkey equally hungry and thirsty placed at exactly equal distances from sources of food & water. In such a framework, he would die of both thi...more
Overall, the theme of the book is that most events are random. Though people think things happen for a reason, in truth there may not be a reason.
A few exerps that I found interesting:
"Imagine a donkey equally hungry and thirsty placed at exactly equal distances from sources of food & water. In such a framework, he would die of both thi...more
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Read in December, 2006
I just finished rereading this book. I liked it much more the first time than this time.
A lot of good points are made in this book, such as people are innately unable to grasp the amount that randomness/chance plays in their lives unless they really think about it; that emotions play a necessary but sometimes unfortunate role in making decisions; and that even rational people aren't as rational as they think.
The book takes a long time to make these points and throws in a lot of frustrati...more
A lot of good points are made in this book, such as people are innately unable to grasp the amount that randomness/chance plays in their lives unless they really think about it; that emotions play a necessary but sometimes unfortunate role in making decisions; and that even rational people aren't as rational as they think.
The book takes a long time to make these points and throws in a lot of frustrati...more
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Read in July, 2007
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 b...more
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 b...more
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Read in May, 2007
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 genera...more
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 genera...more
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Read in June, 2002
recommends it for:
awesome book on investments
Taleb as an amused observer analyzing on the life, personalities and events/happenings of the financial markets and wall street is breath taking..
its a sheer delight for some one who wants to go deep into understanding the concepts of what makes some one or something tick..be it a successful millionaire or a failure..
Taleb's irreverant way of writing on the markets and people are pretty good read..
The deliberate usage of mathematical formulae to relate life, philosophy, events and f...more
its a sheer delight for some one who wants to go deep into understanding the concepts of what makes some one or something tick..be it a successful millionaire or a failure..
Taleb's irreverant way of writing on the markets and people are pretty good read..
The deliberate usage of mathematical formulae to relate life, philosophy, events and f...more
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Read in June, 2007
Many people think that they can make a fortune trading forex, commodities, shares, whatever. They can't. Sure, some people are wheeled out by brokers having 'bet the shop' at unimaginable leveraged levels and hit 6 winners in a row. Some people win the lottery.
Even among the 'professionals', people get ahead of themselves, viewing themselves as hugely successful, when they just happened to be at the right place at the right time. The point is, that you can't break the laws of probability.
...more
Even among the 'professionals', people get ahead of themselves, viewing themselves as hugely successful, when they just happened to be at the right place at the right time. The point is, that you can't break the laws of probability.
...more
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Taleb does not suffer fools gladly, which is to say that he's a bit of a pompous ass, which, admittedly, is better than a pompous idiot.
Taleb doesn't speak about options in detail, but he does go into detail about his Monte Carlo generator explorations and, more importantly, how people, particularly in the financial world, are convinced that they are infallible based largely on what they consider to be scientific work.
Taleb points out again and again the unscientific nature of economic...more
Taleb doesn't speak about options in detail, but he does go into detail about his Monte Carlo generator explorations and, more importantly, how people, particularly in the financial world, are convinced that they are infallible based largely on what they consider to be scientific work.
Taleb points out again and again the unscientific nature of economic...more
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Read in March, 2007
It is noteworthy that randomness has occupied (at best) a secondary place to predictability ever since Aristotle began to tease out the distinction between the two concepts. (Giorgio Agamben has done much to reconstruct and elucidate this historical trajectory.)
Taleb, a stock trader-cum-philosopher, attempts to upend this conceptual bias. You are likely to disagree with him here and there, but the overall thrust of his argument seems irrefutable: chance events play a much larger role in ou...more
Taleb, a stock trader-cum-philosopher, attempts to upend this conceptual bias. You are likely to disagree with him here and there, but the overall thrust of his argument seems irrefutable: chance events play a much larger role in ou...more
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Read in October, 2007
recommends it for:
finance gurus, economists, those wishing to expand their vocabulary
Taleb takes a playful walk through his mind to let us in on many years of experience. unfortunately this reads as a little disconnected and wandering, and the soap box gets old. The first few examples of undervaluing randomness drive the point home, and then it becomes a little trite, and certainly leaves his area of expertise. Granted, in the forward he claims precisely that. An amusing read and a good principle to add to your world view, but I would not recommend subscribing to this new re...more
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Read in March, 2007
A very interesting take on what can be attributed to skill vs. what is truly random. He gets a bit preachy at times, and is a bit full of himself (probably necessarily to write such a book and make the decisions that he has made), but he does a good job explaining his points and making a convincing argument in an understandable manner.
My favorite part is the quote from an economist named Popper, who said essentially that you can't prove a theory to be true, you can just prove it to be false...more
My favorite part is the quote from an economist named Popper, who said essentially that you can't prove a theory to be true, you can just prove it to be false...more
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