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

Incerto #1

by Nassim Nicholas Taleb

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.

Genres: Nonfiction, Economics, Business, Finance, Psychology, Philosophy, Science

368 pages, Paperback

First published November 3, 2001

About the author

Nassim Nicholas Taleb spent 21 years as a risk taker (quantitative trader) before becoming a flaneur and researcher in philosophical, mathematical and (mostly) practical problems with probability. 


Taleb is the author of a multivolume essay, the Incerto (The Black Swan, Fooled by Randomness, Antifragile, and Skin in the Game) an investigation of opacity, luck, uncertainty, probability, human error, risk, and decision making when we don’t understand the world, expressed in the form of a personal essay with autobiographical sections, stories, parables, and philosophical, historical, and scientic discussions in nonover lapping volumes that can be accessed in any order.

In addition to his trader life, Taleb has also written, as a backup of the Incerto, more than 50 scholarly papers in statistical physics, statistics, philosophy, ethics, economics, international affairs, and quantitative finance, all around the notion of risk and probability.

Taleb is currently Distinguished Professor of Risk Engineering at NYU's Tandon School of Engineering (only a quarter time position). His current focus is on the properties of systems that can handle disorder ("antifragile").

Taleb believes that prizes, honorary degrees, awards, and ceremonialism debase knowledge by turning it into a spectator sport.

See Wikipedia for more details.

Reviews

[Trevor · Rating 4 out of 5]

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 probably too stupid to know (or deserve) any better.

Do you hate him yet? I didn’t. I found him very amusing. Admittedly, I probably wouldn’t want to be stuck beside him on a long flight somewhere – but I don’t really go on long flights anywhere, so it doesn’t make too much sense using that as a criterion for anything.

Let’s make a proper start. I’m going to tell you something about Heraclitus. Probably best known for some pithy little quotes about change that he made up all by himself a very long time ago. “You can never stand in the same river twice” – “All is flux”. Heraclitus’s vision of the world was that what is important is change, everything else is transitory and impermanent.

Bertrand Russell claims that Heraclitus came from an aristocratic family that ended up dashed agains the rocks of change and not nearly so well off. The other thing you might need to know about Heraclitus was that he was known as ‘The Obscure’.

I was reminded constantly of Heraclitus while reading this book. The author was also from a well off family that lost everything in the Lebanese War. This also made him focus on change and the nature of unpredictable events. Hardly surprising then that Popper is his favourite philosopher – there is no ultimate truth, rationality is more or less prejudice, everything is awaiting falsification.

I have a love/hate relationship with Karl Popper. I can never work out if he is incredibly naïve (as Taleb proudly boasts that he is) or if he is terribly profound. I do like his idea that we should constantly seek to prove our most beloved theories wrong – but I also think that this level of scepticism is somewhat overstated. There is a line in this book in which we are informed (well, twice actually) that Newton was proven wrong by Einstein. Oh, was he just? I guess all those people shot through the head by guns aimed after the careful application of Newton’s laws of motion suddenly came back to life again then did they? I guess Neil Armstrong, who got to the moon on Newtonian physics, not on the front seat of one of Einstein’s light rays, might also have been a bit surprised at this remarkable over-throw.

Okay, I know, I’m nitpicking, but then again, Taleb does ask for it. He is so contemptuous of the ignorance and foolishness of others that it does become a bit of a sport for him. The one thing you can say about Taleb is that he is not like Heraclitus when it comes to being obscure. He is always very clear, very comprehensive and very interesting.

We should now do some of the people he particularly hates. And in the first rank of those he hates are probably Journalists. Now, it is hard not to agree with him there. He sees Journalism as basically part of the entertainment industry and believes they only really go ‘wrong’ when they start to think they serve some purpose beyond entertainment. Then there are business people, who he believes are mostly thick. One of the main contentions of his book is that successful people are often successful by pure chance. As such their abiding emotion should be gratitude. However, as he repeatedly points out, we all tend to believe our successes are proof of our own genius, and that it is only our failings that are the result of bad luck and chance.

This book gives a wonderful introduction to many of the fallacies we humans are all too prone to make. He makes a cogent argument that we can never be ‘purely rational’ because we need our emotions to short-circuit the endless decision loop that each ‘purely rational’ decision would involve. This book is also a great introduction to probability theory without too many numbers – to the theory without the calculus. Some of his verbal explanations of mistakes are remarkably clear – so clear they virtually jump from the page.

One of the constant themes that I found particularly interesting was that we all suffer from hindsight bias. This is something I will definitely be taking from this book. The idea is that because what has happened in the past has ‘happened’ we think it is the only thing that could have happened and then use it to predict what will happen in the future. We forget that events in the past were also the culmination of probabilistic situations that have resolved one way and not another. We forget that these events could just as easily have resolved in another equally probable outcome - one that merely did not occur. The range of fallacies that he shows spring from this one bias is quite remarkable.

Now, I was recommended this book by someone called Yuri and the funniest story in the book also starred someone called Yuri. It is when he is discussing Stock Market people applying for jobs with him. One of the things they tend to put on their CVs is that they play chess. They do this because playing chess means they are both ‘analytical’ and ‘strategic’. These are obviously good things to be - in fact, I think I would like to be both of these things. Since you can be both of these things just by declaring yourself to be them, we shall take it as read from now on that I am both of these. Taleb tends to prefer to associate with Russian Physicists, not just because they think like him, but also because they can give him lessons in chess and teach him to play piano. When one of these new stock market trader types applies for a job and says that they play chess – Taleb brings this up and then says, “And this is Yuri who will now continue the interview”. And here Yuri appears with a chess board in front of him…

I once watched a Russian playing a non-Russian at chess. The Russian spent the entire time laughing his head off after every move. I don't know if it was because the moves made by his opponent were so useless that he truly found them funny or because this was all part of the psychological warfare - but he did slaughter his non-Russian opponent, so perhaps a bit of both.

This is another book inspired by behavioural economics (like Freakonomics and Predictably Irrational - I'm becoming a bit of a fan of behavioural economics.

If you take this book in good humour, if you allow yourself to listen and not get worked up about his ‘inappropriate tone’ (god save us from those who complain about inappropriate tone) you will learn something from this book and maybe even have a good time.

And I can do a two word review of this book - Shit Happens!

[Marvin chester · Rating 1 out of 5]

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 journalist ... is merely to sound smart and intelligent to the hordes" p 35

He could have enlightened us about financial trading by giving us examples of how traders think on specific trades. Instead he reverts to generalization using fantasy scenarios. He deprecates losers without seeking to explain and understand those loser minds he excoriates. Nor does he explain winner thinking for that matter; except for the generality of praising caution.

I stopped reading this book because the probability of finding anything enightening was approaching zero as the pages I read increased.

[Liong · Rating 5 out of 5]

This is the first book I've read that suggests success is often more about luck than skill.

Can we create our luck? 🤔 I hope so..... 😅

We frequently mistake random chance for skill, particularly in life and financial markets.

The book highlights how unexpected events, like Black Swans, can lead to significant swings.

It's important not to be misled by short-term wins or losses because there are things we simply can't predict or control.

Humans tend to seek patterns and explanations even when events are purely random.

The first book in Nassim Nicholas Taleb's Incerto series (Incerto Book 1 of 5)

[Steve · Rating 2 out of 5]

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, relationships among securities can change in meltdown scenarios. And yes, people are regularly fooled into thinking luck is skill. However, some market participants are clear-sighted enough to see those shrouded risks for what they are and make better assumptions about how they should be traded off against expected returns. These more enlightened investors don’t get the print, though, since they’re not the straw men Taleb can knock down.

Don’t get me wrong. We all like debunking stodgy, established wisdom when we see the holes. If you’re like Taleb, though, and see only holes, what you’re left with is nothing. What might there be in its place? Some models, when tweaked, are still useful.

In a brief moment of modesty, Taleb confesses to psychological weaknesses that can lead him to mistake noise for signal. He seems rather smug about it all, though. It’s like he figures his ability to recognize himself as a fool puts him on a higher plane. For the most part, his ego is openly displayed. It’s also coupled with an axe to grind – an aggressive combination. His fund has consistently underperformed (though he would counter that he’s positioned just right for the coming holocaust). His investment strategy boils down to buying lots and lots of insurance contracts against rare occurrences that he thinks will be slightly less rare. (In actuality, he buys stock options, but the insurance metaphor illustrates the point.) The problem is he’s so firm in his belief that the insurance companies have underestimated risks that he thinks all premiums are too low. However, those selling options, armed with models that account for rare events appropriately, will charge more than enough to cover those risks.

Who will be fortune’s fool? Time will tell, but a provocateur like Taleb will in all probability be better known for his quasi-epistemological exposition on unanticipated variability than for any true investment success.

[Philip · Rating 3 out of 5]

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 simulating randomness. These simulations produce clear "winners" - winners that we would have a hard time believing are due to randomness alone.

#3 has a lot of implications for wall street: sets of investment vehicles as a whole underperform the averages after fees (which I was surprised that he didn't bring up...)

Another idea I really liked is how he describes opportunity sets. He talks about how, for instance, in an upscale neighborhood a janitor who won the lottery may live next to a dentist. Many of us take this information and attribute the likelihood for success as a janitor and a dentist to be closer than it actually is. But being a janitor provides an individual with an opportunity set, with, say a 1% chance of having a high standard of living and a 99% chance of having a low standard living. The dentist opportunity set may be 95% for high standard of living and 5% for low standard of living. But if there are many more janitors than dentists and you live in an upscale neighborhood (where you only see the survivors), that relationship becomes muddled.

Anyway, if you believe the preceding ideas, the book doesn't offer much else.

[Riku Sayuj · Rating 4 out of 5]

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

[Tara · Rating 2 out of 5]

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 scientists as dimwits). I think with significant editing, this book could have been quality. There are several good anecdotes that illustrate how we ignore rational information and simple probabilities in daily life. This would have been fun to read about without the author's smug self-absorption and his personal attacks (the author takes at least four pages to rant about the "incompetence" of journalist George Will and even takes a few punches at Warren Buffett... I mean Warren Buffett?).

I was barely able to bring myself to finish this book but did because I wanted to be able to give it a fair review. My advice - skip it!

[Navid · Rating 4 out of 5]

درباره‌ی نویسنده
آقای نسیم نیکلاس طالب را میتوان آماردان، معامله‌گر بازارهای مالی، و کمی اقتصاددان دانست، اما شهرت این نویسنده‌ی لبنانی/آمریکایی به خاطر معامله‌های مالی یا دانش اقتصادی‌اش نیست. او نظریه‌پردازی است که اگرچه ایده‌هایش قبلا هم توسط دیگران به صورت پراکنده مطرح شده‌اند، ولی او در کتاب‌هایش این ایده‌ها را به صورت منسجم و یکپارچه ارائه می‌کند.
طالب را بیشتر با مجموعه کتاب‌های Incerto (=uncertain-غیر قطعی) می‌شناسند. در این مجموعه که تاکنون ۵ جلد از آن منتشر شده، طالب درباره‌ی احتمالات و عدم قطعیت می‌نویسد.
بخشی از شهرت طالب نیز به خاطر این است که او نویسنده‌ای نسبتاً جنجالی است، معمولا بعد از چاپ هر کتاب او بحث و مجادله‌های زیادی درمی‌گیرد. به علاوه او عادت دارد به بسیاری از مشاغل، حرفه‌ها و اشخاص حمله کند یا اعتبارشان را زیر سؤال ببرد. حمله به دولت‌ها، رسانه‌ها، ریاضی‌دان‌ها، آماردان‌ها، معامله‌گر‌های بازار بورس، مدیر عامل‌ها، سیگنال فروش‌ها، مربی‌ها و نویسنده‌های ژانر موفقیت و خودیاری و ... کاریست که او بارها انجام داده است.
او حتی سابقه‌ی حمله‌ی لفظی به شخصیت‌های حقیقی را هم دارد، تصور کنید او از «بیل گیتس» شخصیتی بسازد که موفقیت و ثروتش تا حد زیادی نتیجه‌ی احتمالات و تصادف باشد، نه هوش یا پشتکار خارق‌العاده. (چیزی شبیه به یک میمون خوش‌شانس!)
با همه‌ی این اوصاف، به نظرم خواندن آثار نسیم طالب برای بیشتر افراد مفید و جالب باشد. او در بیشتر آثارش می‌کوشد به نقش تصادف و عدم قطعیت در جهان بپردازد و به درک بهتر خواننده از پدیده‌ی احتمالات در زندگی، کمک کند.
اگرچه هر کتابِ طالب معمولا حاوی یک نظریه‌ی کلی بیشتر نیست، اما نظریه‌های او را می‌شود در ابعاد و پدیده‌های مختلف بررسی کرد، از نگاه به جهان و فلسفه‌ی زندگی گرفته تا معامله‌های مالی، زیست‌شناسی، موفقیت، ارتباطات، نظریه‌های سیاسی، جامعه‌شناسی و ...
موضوعاتی که طالب به آن‌ها می‌پردازد احتمالاً در نگاه اول چندان برای خواننده جالب به نظر نرسد، اما کتاب‌های او همیشه پرفروش بوده‌اند، چون او توانسته این موضوعات خشک را به شیوه‌ای جذاب تعریف کند. خبری از نظریه‌های ریاضی یا مطالب حوصله‌سربر نیست. طالب روایتگری ماهر است که حرف‌هایش را با مثال‌ها و داستان‌های مختلف بیان می‌کند. طنز او در نوشتن نیز کمک کرده که خواننده از خواندن کتاب‌ها خسته نشود.
در عین حال کتاب‌های او را باید با تفکر نقادانه و هوش و حواس جمع خواند. بسیاری از مطالب گفته شده توسط طالب، راستی‌آزمایی نشده‌اند یا اصلا قابل راستی‌آزمایی نیستند. (گرچه خود طالب می‌گوید حرف‌هایش تئوری‌هایی‌اند که باید از نظر تئوری نقدشان کرد و نیازی به راستی آزمایی ندارند!)
فایده‌ی خواندنِ کتاب‌های نسیم طالب، گستردش دیدِ خواننده به مسائل مختلف، از نگاهی نو است.
طالب در رشته‌هایی که در آن تحصیل یا کار کرده، از جمله آمار و احتمال، و اقتصاد، حرف‌های جالبی دارد، اما وقتی به رشته‌هایی می‌رسد که تخصصی در آن‌ها ندارد (مثل زیست‌شناسی یا پزشکی) احتمالش هست که کمی پرت و پلا بگوید یا به قول معروف، به جاده‌خاکی بزند!

درباره‌ی کتاب
«فریب‌خورده‌ی تصادف» اولین کتابِ مجموعه‌ی incerto است.
ذهن ما انسان‌ها به دلایل تکاملی و زیست‌شناختی برای بررسی احتمالات و در نظر گرفتن تصادف‌های روزمره ساخته نشده است. ذهن انسان به در نظر گرفتن طیف احتمالات عادت ندارد. ما عادت به ساده‌سازی پدیده‌ها در حد «همه یا هیچ» و «سفید و سیاه» داریم. ما عادت کرده‌ایم که برای پدیده‌های همزمان، روابط علت و معلولی در نظر بگیریم:

انسان از فریب تصادف در امان نیست، تنها چاره‌ی ما این است که این فریب را به لذت‌های هنری محدود کنیم!

ذهن انسان نه برای پی بردن به ساز و کار جهان، که برای گریز سریع از خطرات و فرزندآوری ساخته شده است!

ایده‌ی اصلی این کتاب این است که «پیشامدها از آنچه خیال می‌کنیم تصادفی ترند»
نسیم طالب انسانی شکاک به پدیده‌ها و نظریه‌هاست، و شکاک بودن را نوعی شجاعت می‌داند..

به باور من مهم‌ترین سرمایه‌ای که باید در خودم حفظ و تقویت کنم حس عمیق تزلزل فکری است. شعار من این است: اصلی‌ترین فعالیتم دست‌انداختن کسانی است که خودشان و کیفیت دانششان را بیش از حد جدی می‌گیرند.

من به این موضوع آگاهم که فریب خوردن از تصادف بخشی از وجود انسانی من است. چیزی که شاید مرا از دیگران متمایز کند آگاهی من از این آسیب‌پذیری است.

نقد علوم تجربی
بخش بزرگی از دانش امروزی، حاصل روشی است که در فلسفه‌ی علم آن را «استقرا» (induction)می‌نامند. فرض کنید که شما به عنوان دانشمند ادعا می‌کنید که اگر لیوانی شیشه‌ای را به زمین بکوبید، خواهد شکست. برای اثبات این قضیه، شما روش اثبات علمی ندارید و باید دست به تجربه بزنید. ممکن است ده لیوان شیشه‌ای را به زمین بکوبید و همگی بشکند. آیا می‌توان به این روش «اثبات کرد» که هر لیوان شیشه‌ای بر اثر برخورد به زمین خواهد شکست؟ اگر هزار لیوان شیشه‌ای را آزمایش کنید چطور؟ از کجا معلوم که لیوان هزار و یکم سالم نماند؟ از کجا معلوم که هزار لیوان قبلی به طور تصادفی نشکسته باشد؟ چند لیوان برای شکستنن کافی است تا بتوانیم درباره‌ی شکستن لیوان‌ها نتیجه‌گیری کنیم؟ آیا هرگز راهی برای نتیجه‌گیریِ قطعی وجود دارد؟
ما در استقرا برای اثبات فرضیه‌ی خود دست به آزمایش و تجربه می‌زنیم، اما در این روش چیزی جز احتمال و آمار در دست نداریم. ما نمی‌توانیم بدون آزمایش اثبات کنیم که لیوان‌های بعد از هزارمین لیوان نخواهند شکست. فقط می‌توانیم بگوییم بعد از شکستن هزار لیوان احتمال کمی دارد بقیه نشکند.
ما در بسیاری از موارد، «قابلیت ابطال‌پذیری» را طبق گفته‌های پوپر را در فرضیه‌های خود نداریم.
بنابراین در اثبات‌های استقراییِ علوم تجربی، باید حواسمان باشد که از احتمال حرف می‌زنیم، و این احتمال چقدر است و چقدر می‌توان به نتایج تکیه کرد و چقدر ممکن است نتایجِ به دست آمده تصادفی باشد.

موفق‌های تصادفی
فرض کنید در یک جمعیت ۱۰۰۰ نفری ادعا می‌کنید کسی که ۱۰ بار پشت سر هم با سکه شیر بیاورد، برنده‌ی جایزه خواهد شد. طبق قوانین احتمالات، احتمال قابل قبولی وجود دارد که در این جمعیتِ ۱۰۰۰ نفری حداقل یک نفر برنده شود. توجه کنید که این یک نفر توانایی یا هوش خاصی ندارد و اگر آزمایش را تکرار کنیم احتمالاً شخص دیگری برنده خواهد شد.
در مورد افراد موفق و تاثیرگذار هم معمولا اثر تصادف را نادیده می‌گیریم، در جمعیت چند میلیارد نفری انسان طبق قوانین احتمالات، تعدادی می‌توانند تصادفی موفق شوند، اما ما معمولاً فقط بر جنبه‌های غیرتصادفی تأکید می‌کنیم و وقتی زندگی نامه‌ی این افراد نوشته می‌شود، فقط بر هوش یا پشتکار آن‌ها تاکید می‌شود.
البته نباید از حرف طالب این برداشت را کرد که همه‌ی موفق‌ها، احمق‌های خوش‌شانس‌اند، یا هوش و پشتکار و انضباط هیچ تاثیری در موفقیت ندارد:

صدالبته که شانس در خدمت کسانی است که آماده‌اند! سخت‌کوشی، سروقت بودن و ... روی موفقیت تاثیر دارد. این کارها قطعا لازم‌اند اما ممکن است کافی نباشند، چرا که علت موفقیت نیستند.

پس نباید از تأثیر احتمالات و تصادف غافل شد.

همینطور درمورد معامله‌گرهای اقتصادی بازارهایی مثل بازار سهام، بسیاری از تحلیل‌ها و پیش‌بینی‌های اقتصادی صرفاً توجیه‌هایی ریاضی هستند که از نظر نسیم طالب بیش از توهم نیستند.

سودمند بودن متغیرهای دانش اقتصاد در معامله‌گری ممکن است صرفاً تصادفی باشد. یا حتی بدتر، یعنی تحلیل‌های اقتصادی از اساس برای پنهان کردن عامل تصادف شکل گرفته باشند.

نسیم طالب در این کتاب، حرف‌ها و مثال‌های جالب بسیاری درباره‌ی تصادف و احتمالات می‌آورد که من بسیاری را اینجا ذکر نکردم. اگر موضوع برایتان جالب است خواندن کتاب خالی از لطف نیست.

[Ali Karimnejad · Rating 3 out of 5]

1)
فرض کنید که یک روز تلفن ناشناسی دریافت می‌کنید که به شما می‌گه "فردا فلان سهم، مثبته و به نفعته خریداری کنی!". مسلما شما این تماس رو خیلی جدی نمی‌گیری. هر چند فردای اون روز حتما بازار رو رصد می‌کنی و احتمالا کمی متعجب می‌شی از اینکه سهم مذبور، مثبت بود. دوباره روز بعد این قضیه تکرار می‌شه. "فردا فلان سهم مثبته" و باز هم درسته. مجددا، "فردا فلان سهم منفیه". و باز هم درست! قاعدتا بعد از چهار، پنج روز، شما مجاب می‌شی که مقداری پول به این بابا بدی تا همونطور که گفته، 50-50 با هم توی سود شریک بشین.

2)
میمونی رو فرض کنید که با پرتاب دارت به سمت یک صفحه که اسم 30 شرکت برتر بازار روی اون نوشته شده، 3 شرکت رو جهت خریداری سهام اونها انتخاب می‌کنه. سه سهم انتخاب شده در مجموع %12+ سود می‌ده در حالی که شاخص کل اون 30 سهم بزرگ بازار، در اون روز %10- بوده.

3)
بابایی رو فرض کنید که 29 سالشه و تونسته نه با رانت و انحصار واردات خودرو و این حرفا، که واقعا با تکیه بر زور بازوی خودش، 3 میلیون دلار پول در بیاره. رمز موفقیت؟ 3 بار شرط بندی توی "رولت روسی". هر بار یک میلیون دلار!

اصولا گونه انسان تمایل زیادی داره که الگوهای موفقیت اطرافش رو شناسایی کنه و از اونها جهت بقا و حفظ مزیت رقابتی خودش الگو برداری کنه. در خصوص سه مورد بالا، چیزی که موجب می‌شه توجه ما انسان‌ها، به عنوان یک گونه جانوری، بسیار جلب بشه، چیزی هست که اصطلاحا بهش می‌گن:
Survivorship Bias

اینو فعلا داشته باشین. از طرف دیگه، یک تمایل دیگه هم در انسان هست که میل داره محیط پیرامونش رو بشناسه، و اگرچه قادر نباشه کاملا روابط علت و معلولی رخدادهایی که مشاهده می‌کنه رو درک کنه، اما شدیدا نیاز داره روابطی برای اونها بسازه و اصطلاحا اون‌ها رو "رَشِنالایز" کنه

طی این سناریوهایی که گفتیم، ما فقط داریم فردی رو که موفق شده نگاه می‌کنیم و کسانی که همین رویکرد رو به کار گرفتند ولی موفق نشدند رو نمی‌بینیم. در حالی که در مورد بهترین عملکردها، اغلب مقدار قابل توجهی شانس دخیل بوده.

تا مادامی که فرد موفق صرفا در پی "رشنالایز" کردن رخداد و نسبت دادن نتیجه به عوامل احتمالا مربوط به خودش هست، میشه از گناهش صرف نظر کرد. اما مشکل زمانیه که این طرف شروع می‌کنه به نوشتن کتاب راجع به "رموز موفقیت در بورس" یا "چگونه میلیونر شویم" و آدم‌ها شروع می‌کنن از اونها الگو برداری کردن.

اصولا در بررسی هر شرایطی باید یک چیز رو در نظر گرفت. اینکه "خروجی‌های احتمالی" دیگه این پروسه‌ها می‌تونست چی باشه؟
توانایی ذهن ما در مواجه با احتمالات و پدیده‌های تصادفی اونقدر ضعیفه که بدون وادار کردن ذهن به در نظر گرفتن سایر "خروجی‌های احتمالی" نمی‌تونیم به درستی فکر کنیم. اگر 10 میمون رو در نظر بگیریم و جلوی هر کدوم یک ماشین تایپ بذاریم تا به صورت تصادفی شروع به تایپ کردن بکنن، در صورتی که یکی از اونها به طور تصادفی یک صفحه از کتاب "ایلیاد و ادیسه هومر" رو تایپ کنه، منطقا باید لحاظ بکنیم که با میمون خاصی مواجه هستیم. اما اگر به جای 10 میمون، ده‌ها میلیون میمون داشته باشیم چی؟ حتما چندتایی پیدا می‌شن.

با توجه به اونچه که تا به اینجا گفتیم می‌شه کل حرف نسیم طالب رو اینطور خلاصه کرد: ا
با توجه به حجم عظیمی از مردم که هر روز دارن در معاملات بورس فعالیت می‌کنن، قوانین احتمالات تضمین می‌دن که حتما یک "وارن بافت" ای وجود داره. و برای وجود داشتن چنین فردی، بر طبق قوانین احتمالات، نیازی به مشخصه‌های فردی بخصوصی نیست.
البته حالا ما کاری به شخص وارن بافت نداریم و در مثال هم نباید مناقشه کرد. ولی این مثالی که آوردیم دقیقا همون چیزی هست که نسیم طالب بهش میگه:
Fooled by randomness

ما عادت داریم که از روی انسان‌های موفق الگو بسازیم ولی متوجه نیستیم که فقط آدم‌های موفق دیده می‌شن و چه بسا کسانی هم بودن که همین کار رو کردن ولی شکست خوردن اما دیده نمی‌شن. سه مورد اولی که ابتدای ریویو آوردم هم موارد ساده‌تر همین موضوع بودن. و نسیم طالب معتقده این وجه "تصادفی بودن" رو در قبال هر مساله‌ای باید لحاظ کرد. اگرچه ذهن ما به این کار عادت نداره و برعکس برای کشف و خصوصا ابداع روابط علی و معلولی بهینه شده. (به یاد بیارید خرافاتی نظیر نحسی 13، زدن به تخته و ...)

در واقع نسیم طالب تا اونجا پیش میره که تمام مطالعات تاریخی رو به باد انتقاد می‌گیره. چرا که تماما حاصل "رشنالایز" کردن اونچه که اتفاق افتاده هستن. در واقع، صحبت کردن از گذشته آسونه چون "رندُم‌نِس" در اثر رخداد کاهش پیدا کرده. در حالی که مورخی جرات پیش‌بینی آینده رو نداره چون "رَندُم‌نِس" آینده بسیار بالاست. عینا همین ایراد رو البته با شدت خیلی بیشتر به اقتصاد‌دانان می‌گیره. حرف نسیم طالب فقط اینه: دست از "رشنالایز" کردن وقایع بکشید و اعتراف کنید که بخش عمده‌ای از اونچه که داره رخ می‌ده "رَندُم‌نِس" هست!! ا

سرجمع اگرچه خودم بشخصه آنچنان با نسیم طالب موافق نبودم ولی برغم همه پر حرفی‌هاش و زبون گزنده‌ و طنز بی‌مزه‌اش اقرار می‌کنم که نمی‌شه حرف‌های این مرد رو نادیده گرفت.


پ.ن: اگر احیانا هنوز متوجه مورد 1 نشدید بذارید براتون توضیح بدم: شما 160 تا شماره تصادفی انتخاب می‌کنی. یک سهم تصادفی هم انتخاب می‌کنی. به 80 تا میگی فردا مثبته. به 80 تا میگی فردا منفی. فردا که شد، یا مثبته یا منفی. 80 تا میرن کنار، باز از اونایی که باقی موندن به 40 تا میگی فردا مثبته، به 40 تا میگی فردا منفی. روز سوم 20، نفر، روز چهارم 10 نفر و روز پنجم، کلاه 5 نفر رو می‌تونی با اطمینان خاطر برداری! 😉ا

[Jan-Maat]

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 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.

What the author has to say is interesting at least at first, after a few repetitions it starts to get a bit stale and it has to be said that skill is required to repeat your ideas repetitively in repetition and to repeatedly stretch repetitively those repeated ideas that would have been enough for a ten or fifteen page article repetitively over three hundred plus pages of repetition. Having said that I did have a warm feeling of Schadenfreude at the plight of the broker who lost everything and was last seen in his string vest smoking a cigarette to death as his few unreprocessed chattels were loaded on to the back of a very small van.

The notion of the black swan sums up his argument ie until Europeans arrived in Australia none of them had any idea that there was such a thing as a black swan. In the same way in the markets, or more generally in any activity, you can't calculate the risk or probability of an event if it's never happened - or as in the case of a black swan, if you can't even conceive of the very possibility of the event, the kind of things famously described by Donald Rumsfeld as the 'unknown unknowns'.

Reading one gets the impression that Taleb is modestly impressed by his own brilliance, one could well believe that he talks about himself in the third person like Caesar in Asterix, and that he is something of what might be technically described as an arsehole.

Borrow don't buy. Even better - borrow the Reader's Digest version.

[Sarah Clement · Rating 2 out of 5]

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 bit about statistics, decision making under uncertainty, and behavioural economics. Part II is markedly better than Part I because he finally delves into what I (foolishly?) thought that the book was supposed to be about, but you have to make it through 130 pages of arrogance and badly composed narrative. Part II would have been pretty good if I hadn't read a lot of other books on the topics, and for those who are interested in economic markets, I think this would interest you if you can move past the constant interjections of Taleb's personal philosophy. Personally, my eyes glaze over when I read about trading, and I much prefer books like The Drunkard's Walk, which illustrates many of the same (but also many more) concepts. I was happy to read the section on Tversky and Kahneman, but I find their work infinitely more interesting and readable than his summary, and you are spared the normative commentary. Ironic for a man who criticises the normative dimensions of economics, Taleb certainly pushes a strong view of the world. When Taleb does delve into intriguing concepts, I was frustrated with the fact that he explained them poorly and incompletely, and quickly moved on to another topic. Much of the anecdote in the book could have been removed to make way for the real substance of the book. I don't really disagree with his criticisms of MBAs, economists, traders, journalists, etc., but I also don't think anything he says is especially revealing of insightful for most of us who aren't involved in the trading world. All in all, I am really puzzled by the popularity of this book, and I would strongly recommend against bothering with this one. If you're really interested in randomness, I would recommend The Drunkard's Walk.

[Perry · Rating 3 out of 5]

Don't Be Fooled

The author is a Legend in his Own Mind, and he reminds the reader of his brilliance every few pages.

I'd rather have a waxen image of me stuck repeatedly in my tiny black eyes with voodoo pins than read another book by this man.

[ScienceOfSuccess · Rating 5 out of 5]

This is the first book of INCERTO, the most polite, the simplest, and the best to start. I feel like I should read the remaining four(at least for now) again, and I'd love to.

Nassim uses a great analogy, so simple that child can understand, and explain a quite complex problem with statistics. He also makes some laugh at people that use statistics but can't understand it, this makes this book even more readable. The best part is - there is no ghostwriter or editor, all the thoughts are said by the author, and it makes this book quite unique in the non-fiction genre.

[Kai Schreiber · Rating 2 out of 5]

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, talks about scientific study of medication and the absence-of-evidence-cliché. It makes him furious that so many of the idiot journalists out there misunderstand absence of evidence for evidence of absence, and he cites studies where despite numerous subjects no significant benefit can be shown for a medication over placebo treatment. This is not evidence that there is no effect of the medication! he yells, and completely fails to understand the difference between significance and effect size. Yes, it may well come out later that the medication indeed does have an effect. But no, it is not at all likely that that effect will be very relevant, as its size must be tiny or the original study methodically flawed (as otherwise it would have found it).

To reiterate, Taleb does not distinguish between significance and effect size in an argument where he calls everyone else a fool for not getting probabilities right. Sums up the book quite nicely.

(In addition, it is very annoying when his constant reminding the reader that he is no expert on something does not stop him from talking about it, just from giving any evidence for what he is talking about whatsoever. This is mainly true for evolutionary psychology, but threads throughout. "I'm not a scientist, but a humble trader, so I'll just make shit up now" does not really work as captatio benevolentiae).

[Daniel Clausen · Rating 5 out of 5]

Again, I'm astounded by the quality of Taleb's writing. His theory is both scientific and poetic, his insights are always useful and reflect what I often experience in my life...the one thing that really impressed me in this book, however, was his ability to tell a great story. That's something I had forgotten about.

Before I can truly judge this book, however, I do think I need to read it a second time. Taleb always has sharp provocative ideas, but they do need to be reflected on and digested. Since this is the third book I've read of his and since I've read them in reverse order, I probably don't need a thorough second reading. I would recommend all readers, however, to highlight key passages with a pencil and come back to them periodically to reflect on them.

A key lesson that comes out of this book is this, you should always be asking yourself "How can I not blow up?" How can I not be an acute successful randomness fool? In other words, how can I not take risks so enormously stupid that I never recover from them?

Another key lesson: survivorship bias...we consider rich people successful; however, we do not see the people did the exact same things (took enormous risks) and blew up as a result. We only worship the lucky idiots.

And here's a lesson on intellectual humility: "My lesson from Mr. Soros is to start every meeting at my trading boutique by convincing everyone that we are a bunch of idiots who know nothing and are mistake prone, but happen to be endowed with the rare privilege of knowing it."

Another wonderful book, another wonderful afternoon spent!

[Milan · Rating 4 out of 5]

A few insights from Fooled by Randomness by Nassim Nicholas Taleb:

• People often mistake luck and randomness for skill and logic.
• Human brain was not built to make forecasts or think in probabilities.
• Just because it hasn’t happened before, doesn’t mean that it won’t happen any time.
• Emotions can overwhelm any capacity for rational thought.
• Reduce exposure to noise – newspapers, daily stock prices changes, television, etc.
• We are genetically poor at understanding the impact of rare events. One black swan makes the long held belief that all swans are white incorrect.
• In the long run, successful fools will run out of luck and after many years of success they will have one disastrous quarter where they lose everything.
• The past blowups were always surprises, as all future ones will also be.
• Path dependent outcome – things sometimes end up as they are because of luck or randomness, not because it makes sense.
• People get attached to their ideas, but we should learn to change our minds when presented with solid evidence.
• The more enduring trading strategy is betting on rare or unlikely events with a big payoff in case they occur.

[Carolyn Ivy · Rating 5 out of 5]

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 various ways we fool ourselves and why we cannot help but be wrong much of the time. He branches out from probability and mathematics to explain why our minds work as they do and what the recent psychological and neuroscientific studies as well as evolutionary psychology have to say about how we think and why we are so easily fooled by randomness.

His writing is lively and peppered with anecdotes. It is an easy read but he never condescends to the reader nor dumbs down the subject. A great read!

[Nicholas · Rating 3 out of 5]

"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, some of these people trade very successfully for a while. Taleb belives that no trader can stay ahead of the market forever. The success of a small number of traders for a short amount of time can simply be explained by statistics: after all, given a large enough group of traders, some are bound to be successful some of the time even if their trades are entirely random.

This point is well illustrated with many examples, and this is where the book falters for me. Some of the examples are great (he goes into a lot of detail about various Monte Carlo simulations he has constructed), but some just seem like strawmen (he goes to a lot of trouble to describe the fancy cars, extravagant house, impulsive trading strategy, and hubris of a hypothetical trader, setting him up for his inevitable fall at the hands of the "unexpected rare event").

Some examples are just plain wrong, or at least misleading. For example, he goes into detail describing the work of Karl Popper, a philosopher who was interested in the question "how do you tell the difference between science and non-science?" Popper proposed several theories of science to answer this question.

The first, naive falsificationism, essentially states two things: firstly, that a theory is scientific if it can be falsified; and secondly, that a theory which has been falsified should no longer be used.

The second, sophisticated falsificationism, was a response to both the negativity of naive falsificationism and also a response to the criticism that science doesn't work that way (by immediately discarding theories the moment they contradict any evidence). Sophisticated falsificationism again states two things: that a theory is scientific if it leads to the discovery of novel (ie, new) facts; and that a theory is falsified by a new theory if the new theory can accurately predict everything the old theory could but *also* can accurately predict novel facts. General relativity is the canonical example of this: it incorporates Newtonian mechanics at low speeds but also explains things that Newtonian mechanics cannot at near-light speeds.

Anyway, Taleb's summary of all of this was "Popper's detractors called him a naive falsificationist." They did not, or at least not disparagingly, because Popper himself proposed the term, and labeled himself accordingly! I can understand why Taleb might not have wanted to include a huge explicative paragraph on Popper, but the book would have been just fine without the dubious example.

Another example of sloppiness occurs later, when Taleb talks about the QWERTY keyboard layout as an example of "the vicious dynamics of winning and losing in an economy" and repeats the old saw that the QWERTY layout was designed to slow typists down, and that it succeeded anyway because of a "snowball effect" of popularity. This claim is highly contentious (in fact one way to both speed typists up and prevent mechanical key jams is to put commonly-used letter combinations on opposite sides of the keyboard, something that QWERTY does to some extent but that Dvorak does much better), and once again the book would have been just fine without it.

Taleb is best when he is covering his area of expertise -- probability -- and the chapters dealing with probability are great. There are also several enjoyable and illustrative personal anecdotes which are a fun and memorable read.

Overall I enjoyed the book. I just wish he'd put more thought into his examples.

[Ralph Palm · Rating 1 out of 5]

Interesting idea badly executed. So badly, in fact, I was left wondering who it was written for; it was neither coherent enough for an academic audience nor clear enough for a general one. The book is suffused with trivial errors of fact and usage, to the point where no statement (trivial or otherwise) retains any credibility. It is filled with the most glaring contradictions: the author will condemn an act on one page and commit it on the next, without any appreciable shred of self-awareness. This bizarrely paradoxical presentation is further exacerbated by the author's own explicit claims to possess the very self-awareness which is no where in evidence.

Lastly, I should note that this is a claim about the text, not the author. He may very well be a genius-wizard of the highest of high orders. Whether this is or is not the case, this book conceals it very well. His fans, however, are demonstrably fools. They admire the book based not on its contents, but on the author's own financial successes, while the book itself makes precisely the opposite point
--that admiring people who happen to be successful without regard to their underlying thinking is itself foolish.

Ug, business majors....

[Louis · Rating 5 out of 5]

I assigned this to a class, with a warning that Taleb can be an insufferable, arrogant, jerk; but he was not going to be the last one they deal with so they have to get past that. But, from reading their reports, I think that it paid off. The attitude and tone he takes has a purpose, to deliver a message in three parts: we are not good at dealing with uncertainty, we don't think about uncertainty right because we tend to only see what actually happened instead of considering all the possibilities, and the way to get past this is to consider the process and be assured that it would have handled bad news well. And because of that effectiveness (many of my students stated they never read anything book length voluntarily), the book keeps the readers attention (if the tone does not drive them away!) and is memorable. I have textbooks that I can assign that teaches methods of measuring uncertainty, Fooled by Randomness helped my students learn to think about risk, and that makes it a success in their (and mine) eyes.

[Justin Pickett · Rating 3 out of 5]

I felt a little let down by this book, having loved Taleb’s previous work. Of the substantive points made in this book, few are new. Taleb covers bounded rationality, conditional probability, regression to the mean, and the various cognitive heuristics (e.g., anchoring, availability), which he discusses mostly in the context of stock trading. He describes the option-trading approach of crisis hunting. He explains how people commonly mistake the median for the mean (the average or expectation) and why it matters in the case of asymmetric distributions, which are common in many areas of life (e.g., medicine, economics).

“Whenever there is asymmetry in outcomes, the average survival has nothing to do with the median survival.”

He uses Russian roulette (the barrel of reality) to explain randomness and how, with a sufficiently large number of players, it can give the illusion of success (e.g., if people played it for money), even while hiding the huge cemetery (survivorship bias). The point being that track records, in the context of randomness, are often meaningless. Another example is starting with a large sample of people and sequentially sending out letters that predict different possible outcomes, and then only following up with those recipients who received a string of letters over several months that happened, by chance, to include only accurate predictions.

“The con operator pulls 10,000 names out of a phone book. He mails a bullish letter to one half of the sample, and a bearish one to the other half. The following month he selects the names of the persons to whom he mailed the letter whose prediction turned out to be right, that is, 5,000 names. [And sends them the letters.] The next month he does the same with the remaining 2,500 names...”

Taleb also talks about the hiring process and how he caught MBA’s who falsely claimed to have advanced chess skills. And he talks about the disconnection between wealth and happiness that results from the changing of comparison groups (e.g., neighbors). But again, most of the substantive points in this book have been covered elsewhere in more detail and with less filler (e.g., in The Black Swan: The Impact of the Highly Improbable and in Thinking, Fast and Slow).

[Gordon · Rating 4 out of 5]

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 impressed by wealth, but counteracts it by stressing how little he works, how much time he devotes to intellectual pursuits and how much smarter he is than the typical wealthy person. But, all that’s just literary style -- and apparently a very popular one, judging by the sales of the book. It remains a fascinating book nonetheless.

Key ideas: We do not gauge causation, probability and risk very well, and hence we do not act according to a rational model of behavior, a la homo economicus. His heroes are Nobel Prize-winner Daniel Kahnemann and Amos Tversky, whom Taleb sees as the greatest thinkers in modern economics, since they re-wrote the book about how we actually decide as opposed to how economists and other rationalists think we ought to decide. Based on their work and that of a host of other researchers in behavioral economics/finance, he catalogs many of the systematic biases that strongly affect our behavior, such as:
o Hindsight bias: We fit the explanation to the events after the fact, as if we knew it at the time. And, we see patterns where there are none – or we see the wrong pattern. Mistrust the predictions of experts – they will almost always be trumped by an evidence-based analysis, since they tend to mis-remember the past. They remember their successes and forget their failures.
o Attribution bias: Beautiful people are more virtuous than ugly people. Tall people are more likely to be leaders than short people. A man in a suit is more trustworthy than a man in t-shirt and jeans. And so on.
o Small number bias: We extrapolate wildly from small samples.
o Asymmetric pain/pleasure from losses or gains: The pain of a loss is roughly twice as much as the pleasure from an equivalent-sized gain. So we sell our winners but keep our losers (to avoid having to feel the pain).

In short, life is more random than you think and your ability to navigate it rationally is more limited than you think.

What do I think of all this? He's right that it's a good idea to keep an open mind and to be ready to change your mind when you come up with a better interpretation and/or a more accurate set of facts. So far, so good. But his core world view is the product of the only profession he's ever known: Wall Street trading. As such, he does not shape let alone control events -- he simply bets on their outcome. That's not the kind of perspective that makes you see the world as a highly deterministic place, or one where, if you hope to survive long enough to get a few gray hairs, you can think of yourself as a "master of the universe" or even captain of your ship. He doesn't want to be captain of the ship; he just wants to bet on whether the ship will sink in the next storm or not, and turn a profit on the bet.

[Santhosh · Rating 2 out of 5]

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 shouldn't be doing: making sense of random noise.

That said, some of his thoughts do seem reward enough for us to do so:
* humans are built to see patterns, to find causes for things, and to believe in our own rationality;
* some things can't be explained; the human mind can't accept this and seeks some explanation; we can't help doing it
* most investment strategies are thus based on what people rationally believe to be the causal equation
* having lucky mascots is an example of looking for causality that doesn't exist
* we make many decisions emotionally, applying reason with an after-the-fact rationale
* we tend to ignore events that have a low probability of occurring
* random events occur all the time, yet we don't assign probabilities to or plan for these events
* we should also look to learn from those who lost, and not just from the winners - survivorship bias

Taleb himself is the founder of a firm that thrives on unexpected events, a strategy he calls "crisis hunting" that is diametric to traditional trading companies that notch up steady profits which are wiped out by occasional catastrophic losses. Whether such a practice, if followed by the entire industry, would be useful for, among other things, the economy, is something that he hasn't pondered upon.

In all, a decent read, though I thought way too lengthy and cluttered for what he had to say. And the fin-hater in me had to plough through all these pages on investments and trading.

[Jayaprakash Satyamurthy · Rating 3 out of 5]

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 and a lifetime of observing a field particularly prone to being tossed on the tides of randomness to cut away many of the assumptions and avowed certainties that are bandied about in business circles.

What makes this interesting to me is that Taleb's ideas are relevant beyond the world of trading. This book has things to say about human nature and the good life, and that was more than I expected from a writer I had initially pegged as another prophet of the month for the MBA crowd.

[S.Ach · Rating 3 out of 5]

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 providing an captivating narrative. Talks on finance bore me. Talks on stock market dynamics doubly bore me. The author having spent big part of his life in finance market, gives 100s of examples to prove his theory, but alas all in stock market and finance.

The author tries hard to appear very intelligent, which he manages by esoteric references and illustrations. But what is the point in intelligent blabber that confuses the reader.

However, there are more than one occasion you will find yourself nodding your head while reading some of the conjectures, especially in the places where the author brings in what you have been always thinking, but rarely talked in the fear of being branded 'jealous' - 'How come that incompetent idiot who can't distinguish between a Picasso and a picture of bull's testicles, is driving a Mercedes, and I am stuck with this Fiat?' with a divine prophecy:

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.

[Rodrigo Herrera · Rating 5 out of 5]

No matter the amount of money you have invested—whether it's a little or a lot—this book is a must-read, especially if you have a manager or an operator handling your investments. This book opens your eyes to the true nature of risk, success, and track records in the world of finance.

Taleb does an exceptional job of explaining how randomness and luck play a much larger role in outcomes than most of us realize. It's easy to be impressed by someone’s success or a strong track record, but this book reminds you to take a step back and understand the underlying factors, especially the role of chance.

The key takeaway is not to be overly impressed by success, particularly in the field of money management. This book is a critical tool for anyone looking to understand the financial world better and make more informed decisions about their investments.

I loved the book because it all makes sense when you encounter a money manager with a successful record, yet their "persona" doesn’t quite align with what you'd expect from a genuinely skilled professional. Now, I understand that they may just be on the lucky side of randomness, especially in a decades-long bull market.

[Fatemeh · Rating 4 out of 5]

من اول همینطوری اومدم خلاصه کتابو گوش دادم ببینم چیه، خوشم اومد رفتم نسخه‌ی کاملشم شنیدم. :)))

[Mehrsa · Rating 4 out of 5]

Very interesting theory. I have thought about this book many times since I have read it. Especially during this current economic crisis.

[Philipp · Rating 4 out of 5]

I've always loved books like Thinking, Fast and Slow or How to Lie with Statistics; books that look at all the ways we lie to ourselves, or the ways we don't get statistics. Fooled by Randomness came out 10 years before Kahneman's book; the original on the block.

The angle is obviously different, as Taleb as a background in Wall Street finance; an area full of people lying to themselves. They're rich because they're genius traders! Nope, they're rich because they got lucky three times in a row. They won't be lucky a fourth time.

Downside of the book is that it's not particularly well-structured; I think somewhere towards the end Taleb confesses that he doesn't like planning his writing, or knowing how long it'll take, he sits down and lets the journey take him. The Steven King-school of writing!

Upside of the book: Taleb has no chill for news like 'this stock went up 2%!' because in all likelihood, it's just random fluctuation. Pointless news. Taleb has little love for journalists, traders, economists, Pinker; yes please

[Brian Yahn · Rating 4 out of 5]

Taleb has quickly become one of my favorite writers, possibly my favorite thinker.

Rating his work is difficult. On one hand, I took away a few things from this book that I think will stay with me for the rest of my life and be very impactful. What more could a book possibly offer?!

On the other hand, this book has hardly any focus. I like to think of myself as pretty intelligent -- and I usually get bored quickly -- but even by my standards, Nassim changes topics too quickly. He will cover some theory, like the Law of Large Numbers, as a one sentence commentary in a small anecdote.

I've found Nassim to be most helpful in introducing me to new thinkers and ideas, rather than actually explaining his ideas fully.

I really liked The Black Swan, because in that book, Nassim really set out to make a point, and the entire book mostly revolved around making that point. And it did.

His other books have mostly been a collection of interesting thoughts. It's kind of like listening to someone continuously digress without actually making a point.

Still, this man is brilliant, and I haven't yet stopped picking up insights from him. I'll definitely be reading more.