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

by Nassim Nicholas Taleb

The reader needs to be warned that not all of the emerging-market and high-yield traders talk and behave like Carlos and John. Only the most successful ones, alas, or perhaps those who were the most successful during the 1992-1998 bull cycle. At their age, both John and Carlos still have the chance to make a career. It would be wise for them to look outside of their current profession. The odds are that they will not survive the incident. Why? Because by discussing the situation with each of them, one can rapidly see that they share the traits of the acute successful randomness fool who, in addition, operates in the most random of environments. What is more worrisome is that their bosses and employers shared the same trait. They, too, are permanently out of the market. We will see throughout this book what characterizes the trait. Again, there may not be a clear definition for it, but you can recognize it when you see it. No matter what John and Carlos do, they will remain fools of randomness.