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

(Incerto #1)

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4.05  ·  Rating details ·  40,418 ratings  ·  1,637 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.
Paperback, 368 pages
Published August 23rd 2005 by Random House Trade Paperbacks (first published 2001)
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4.05  · 
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 ·  40,418 ratings  ·  1,637 reviews


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Trevor
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
Sep 14, 2011 rated it really liked it
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
Steve
Sep 03, 2007 rated it it was ok
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
Marvin chester
Feb 26, 2013 rated it did not like it
You can't learn anything from this book; it's just a rant. The author's message is an incessant din of, 'I'm smart. They're stupid'

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

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

The author likes the word 'devoid'.

"I was saved from the conversation of MBAs."

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

"a journal
...more
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 amu
...more
Philip
Dec 31, 2008 rated it liked it
I love the theses that he has in the book, but jesus christ, this is horribly written.

I think the powerful ideas could have been condensed down to a New Yorker length article:
1. We tend to see the "survivors"; by hiding those who have failed, our understanding of many systems is skewed.
2. Leveraged betting on conventional wisdom provides consistent returns in the short run, but can explode when something weird happens (his "black swan idea").
3. You can reproduce the results of many systems by s
...more
Tara
Jul 24, 2011 rated it it was ok
One of my business school professors raved about this book. I expected to get an entertaining and informative investment professional's take on how our irrational tendencies keep us from applying basic probabilities that would help us make better decisions.

Instead, this book read like a pretentious, ranting diary. In the introduction, the author brags that he ignored nearly all of the suggested changes his book editors made (he labels book editors along with journalists, MBAs, and most social sc
...more
Perry
Nov 28, 2014 rated it did not like it
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.
Sarah Clement
Nov 28, 2013 rated it it was ok
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
Greg Linster
Sep 29, 2010 rated it it was amazing
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
Carolyn Stein
Dec 08, 2008 rated it it was amazing
Recommends it for: everyone. The concepts in this book are invaluable for those developing critical thinking skills.
Shelves: economics
This is the best book I have read all year, closely followed by his other book, The Black Swan. Fooled by Randomness is one of that select group of books that changes your mind entirely. Once I read it I could never look at the world the same again, nor could I take my old assumptions for granted.

We are so accustomed to looking at the world and seeing patterns that we do not always understand that we may be seeing randomness and imposing a pattern where none belongs. Taleb talks about the variou
...more
Nicholas
"Expect the unexpected" -- an aphorism that almost completely summarises the book. Cliches exist for a reason, but 196 pages later I feel the point has been well made.

Taleb is a stock market trader. As a trader, he believes that there is no way in general to predict the stock market -- that there are so many variables that the resulting stock price is indistinguishable from pure noise. Unfortunately, his profession is filled with people who believe that they *can* predict the market. In fact, so
...more
Daniel Clausen
Aug 12, 2018 rated it it was amazing
Shelves: books-of-2018
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.
...more
Gordon
Mar 02, 2009 rated it really liked it
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
Santhosh
Nov 19, 2011 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
Kai Schreiber
Oct 08, 2013 rated it it was ok
A nice thesis (humans are unable to correctly assess risk and probability and therefore fall into all kinds of traps) wrapped in pompous and befuddled writing. At times the logic and flow is so jumpy and flawed that I thought there was something wrong with my copy.


There is something wrong almost constantly, but the biggest WTF moment came for me, when Taleb, who constantly reminds the reader that everybody else is a fool and it's just him who has insight and the tools to master probability, talk
...more
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
...more
Yousif Al Zeera
Deep.
S.Ach
Feb 06, 2016 rated it liked it  ·  review of another edition
Shelves: non-fiction
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
...more
Jaak Ennuste
Mar 30, 2018 rated it it was amazing
Shelves: best-ones
This book is written by a person who is both a thinker and a doer, a combination that should be strived for by everyone. Taleb is a successful trader who has read poetry, history, psychology and many other subjects quite extensively. The result is a book on how randomness guides our lives much more than we want to belive

The humble message is that we are all fooled by randomness, but few of us know it. Eventually the aim is not to become a cold, rational human calculator (it is simply impossible)
...more
Tony Cohen
May 22, 2007 rated it it was amazing
This is one of the best books I have ever read. It has everything in a book that I yearn for....interesting ideas...some of which I don't grasp because hey are too clever for me...a smug narrator who seemingly knows more than everyone else...and a well-written and pleasing style.

Here is the crux of the book. Brokers have a very common weakness. They fail to appreciate that the likelihood of an event can not be the only factor one looks at when deciding to make a move. The likelihood, and the cos
...more
James
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
Joselito Honestly and Brilliantly
BOOK REVIEW: “Fooled by Randomness: The Hidden Role of Chance in the Markets and in Life” by Nassim Nicholas Taleb


A young man is terribly sick. He is given only a few months to live. Desperate, he travels to Lourdes to pray and drink miraculous water. He heals. He says he was healed by the blessed Virgin Mary. A poor, plain-looking dude like Jack Ma toiled and moiled to make a name for himself and get out of the rut he was in. He succeeded and became one of the richest men in the world. He now t
...more
Mangoo
Jan 23, 2011 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
Sirish
Oct 13, 2014 rated it it was amazing
A skeptic's guide to life - A lot of what its critics say about this book is true. It is unstructured, repetitive and occasionally polemical- But it worked for me. Not only does it provide a great bibliography ( like someone once said, "what is the point of a book if it does not lead us to other books" ) but it also explains a few theories which I knew intuitively but couldn't convince myself that they were more than wishful thoughts. Taleb is probably an idiosyncratic taste, or maybe I just wis ...more
Phillip
Aug 21, 2013 rated it did not like it
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
Ralph Palm
Mar 31, 2012 rated it did not like it
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. T ...more
Paul
Mar 28, 2016 rated it did not like it
Not what it purports to be, it's mostly autobiographical in nature. Some self-aggrandizement is fine given his job but the book is also full of cheap digs at his colleagues and since I don't really know the author or his friends it's all lost on me. The book starts out with a disclaimer that it will not attempt science or reason (research is hard!) because it's more about anecdotes and gut feelings and then continues to point and laugh at all those pseudo-science done by other traders.

The contem
...more
Louis
Sep 18, 2014 rated it it was amazing
Shelves: math-stats, business
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 possibilitie ...more
Steve Bradshaw
Nov 20, 2011 rated it liked it
Shelves: investment
Nassim Taleb has to be a strong contender for the title of Most Pretentious Author of the 21st century. Despite his obnoxious writing style, he has created an interesting synthesis of existing ideas that speak powerfully to societies inability to appreciate the role of chance when looking back at events, and to underweight the probability of extremely unlikely outcomes.

Unfortunately these ideas come littered with classical references, none of them properly explained, that do little to strengthe
...more
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Vancouver Marketing Strategies 1 7 Apr 05, 2018 11:29PM  
Goodreads Librari...: Incorrect Page Count: ISBN13: 9781400067930 2 11 Nov 22, 2017 08:38AM  
A little repetitive? 4 60 Jan 17, 2017 02:19AM  

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5,679 followers
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
...more

Other books in the series

Incerto (5 books)
  • The Black Swan: The Impact of the Highly Improbable
  • The Bed of Procrustes: Philosophical and Practical Aphorisms
  • Antifragile: Things That Gain from Disorder
  • Skin in the Game: The Hidden Asymmetries in Daily Life
“Heroes are heroes because they are heroic in behavior, not because they won or lost.” 121 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.” 46 likes
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