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Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (Incerto #1)

4.03  ·  Rating Details  ·  25,719 Ratings  ·  1,029 Reviews
Fooled by Randomness is a standalone book in Nassim Nicholas Taleb’s landmark Incerto series, an investigation of opacity, luck, uncertainty, probability, human error, risk, and decision-making in a world we don’t understand. The other books in the series are The Black Swan, Antifragile, and The Bed of Procrustes.

“[Taleb is] Wall Street’s principal dissident. . . . [Foole
ebook, 256 pages
Published October 14th 2008 by Random House (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
May 15, 2014 Riku Sayuj rated it really liked it  ·  review of another edition
Shelves: r-r-rs

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
Oct 02, 2007 Steve rated it it was ok  ·  review of another edition
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'm not certain if it was this book I read or Black Swan by the same author. Importantly I was not convinced by the blurbs or the reviews that there is any great significance in which one, if any, of these two books you may read.

It is one of those books with an interesting premise that grows steadily less interesting as you read. 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 amu
Jan 01, 2009 Philip rated it liked it  ·  review of another edition
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
Jul 24, 2011 Tara rated it it was ok  ·  review of another edition
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
Marvin chester
Feb 26, 2013 Marvin chester rated it did not like it  ·  review of another edition
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
Dec 14, 2008 Carolyn rated it it was amazing  ·  review of another edition
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
"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
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
Mar 02, 2009 Gordon rated it really liked it  ·  review of another edition
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
Sep 28, 2014 Santhosh rated it it was ok  ·  review of another edition
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
Feb 17, 2016 Sujeet rated it liked it  ·  review of another edition
Success of some people is nothing but pure luck. Some people get elated when the find some kind of pattern in randomness, when there is none. Probabilities are misconstrued as certainties. And thus people get fooled by randomness and create theories of success. - This is precisely the belief of Nassim Taleb who goes on and on and on and on to prove it throughout the book.

The tone of the book is dismissive and i-am-intelligent-you-are-stupid pedantic. The author lacks clearly the skills of provi
Jul 13, 2015 Marin rated it it was amazing  ·  review of another edition
Случайността, или онова стечение на обстоятелствата, което не може да бъде предвидено от хората,(тъй като случайности няма, всяко нещо е резултат от закономерното развитие на породилите го явления) е основният обуславящ фактор в развитието на човека, обществото и природата. Това мисли Талеб, и има солидни основания, но манията му да придаде чутовна мощ но тезата си, я прави не съмсем здраво стъпила на земята.

Всъщност, случайността се ражда с появата на хората, тъй като за да съществува тя, трябв
Tony Cohen
Mar 02, 2008 Tony Cohen rated it it was amazing  ·  review of another edition
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
Greg Linster
Aug 08, 2013 Greg Linster rated it it was amazing  ·  review of another edition
Shelves: favorites
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
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
Apr 03, 2016 Salman rated it really liked it  ·  review of another edition
At times I didn't know what to make of it. I thought he was just randomly generating sentences to fill up the pages in places (which he shows to be possible using the dada engine, and gives an example of something he conjured up with a button in a second. I suspect he did do the same for bits of the book, if I'm honest). And stuff like that really annoys me. I just wish authors would get on with what they're saying, you know? And not only that but the book also lacks real structure. It's quite f ...more
May 19, 2016 Phillip rated it did not like it  ·  review of another edition
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
Jan 23, 2011 Mangoo rated it it was amazing  ·  review of another edition
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
Jul 14, 2007 todd rated it really liked it  ·  review of another edition
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
May 28, 2008 Kate rated it liked it  ·  review of another edition
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
Jayaprakash Satyamurthy
I've resisted reading Taleb for reasons he might approve of. I am suspicious of new gurus and of intellectual fads, especially when the word 'market' is factored in. I've finally read this book because a friend whose insights I give some weight to respects Taleb's ideas.

What I found is a witty, personable narrative about the dangers of pattern recognition, novelty addiction and overestimating our ability to be rational. Taleb draws on philosophy, mathematics, psychiatry and personal experience
May 17, 2007 CJ rated it liked it  ·  review of another edition
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
I love this book. It's like a course in critical thinking and the use of the scientific method to make important decisions instead of falling into a number of errors of logic that seem to be the defaults for the human mind throughout history. It's also frequently hilarious. I wish this book had existed, and I'd read it, when I was in high school, and if I had the power to do so, I'd make it a required course there now. Of course, that would never fly, given that it would equip people to see thro ...more
Colin Bendell
Feb 11, 2011 Colin Bendell rated it really liked it  ·  review of another edition
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.
Prachi Pande
Doesn't even attempt any semblance of scientific rigour, but throws together a collection of interesting counterintuitive ideas and references that seem to make sense. Definitely worth following up on, but on the other hand pretty useless if not followed up on.
Filip Miłoszewski
There are some very powerful ideas around misjudging risks and probabilities discussed in the book but overall it's too long-winded for my taste.
Maybe it should just have been a long-read magazine article.
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A little repetitive? 3 46 Jul 09, 2013 10:44PM  
  • The (Mis)Behavior of Markets
  • Against the Gods: The Remarkable Story of Risk
  • When Genius Failed: The Rise and Fall of Long-Term Capital Management
  • The New Market Wizards: Conversations with America's Top Traders
  • Irrational Exuberance
  • Fooling Some of the People All of the Time: A Long Short (and Now Complete) Story
  • Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street
  • The Little Book of Behavioral Investing: How Not to Be Your Own Worst Enemy
  • Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives
  • Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart
  • Devil Take the Hindmost:  a History of Financial Speculation
  • Reminiscences of a Stock Operator
  • Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger
  • A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation
  • Security Analysis: Principles and Technique
  • Bull!: A History of the Boom and Bust, 1982-2004
  • A Random Walk Down Wall Street
  • Why Smart People Make Big Money Mistakes And How To Correct Them: Lessons From The New Science Of Behavioral Economics
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...

Other Books in the Series

Incerto (4 books)
  • The Black Swan: The Impact of the Highly Improbable
  • The Bed of Procrustes: Philosophical and Practical Aphorisms
  • Antifragile: Things That Gain from Disorder

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“Heroes are heroes because they are heroic in behavior, not because they won or lost.” 71 likes
“Reality is far more vicious than Russian roulette. First, it delivers the fatal bullet rather infrequently, like a revolver that would have hundreds, even thousands of chambers instead of six. After a few dozen tries, one forgets about the existence of a bullet, under a numbing false sense of security. Second, unlike a well-defined precise game like Russian roulette, where the risks are visible to anyone capable of multiplying and dividing by six, one does not observe the barrel of reality. One is capable of unwittingly playing Russian roulette - and calling it by some alternative “low risk” game.” 24 likes
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