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

by Nassim Nicholas Taleb

Had the author done the same study on bankrupt citizens he would certainly have found a predilection for risk taking.

pernicious.

fatuous

remind myself of Einstein’s remark that common sense is nothing but a collection of misconceptions acquired by age eighteen.

Using my Monte Carlo to make and remake history reminded me of the experimental novels (the so-called new novels) by such writers as Alain Robbe-Grillet, popular in the 1960s and 1970s.

(when in the past similar setbacks did not affect them for very long and the joy of the purchase was short-lived).

A mistake is not something to be determined after the fact, but in the light of the information until that point.

would suggest London’s Anatole Kaletsky and New York’s Jim Grant and Alan Abelson as the underrated representatives of such a class among financial journalists; Gary Stix among scientific journalists);

One conceivable way to discriminate between a scientific intellectual and a literary intellectual is by considering that a scientific intellectual can usually recognize the writing of another but that the literary intellectual would not be able to tell the difference between lines jotted down by a scientist and those by a glib nonscientist.

suggest reading the hilarious Fashionable Nonsense by Alan Sokal for an illustration of such practice

Charles Darwin’s On the Origin of Species is that, although the text does not exhibit a single equation, it seems as if it were translated from the language of mathematics. Yet it is artistic prose.

Turing came up with the following test: A computer can be said to be intelligent if it can (on average) fool a human into mistaking it for another human. The converse should be true. A human can be said to be unintelligent if we can replicate his speech by a computer, which we know is unintelligent, and fool a human into believing that it was written by a human.

We can randomly construct a speech imitating that of your chief executive officer to ensure whether what he is saying has value, or if it is merely dressed-up nonsense from someone who was lucky to be put there. How?

select randomly five phrases below, then connect them by adding the minimum required to construct a grammatically sound speech.

We look after our customer’s interests / the road ahead / our assets are our people / creation of shareholder value / our vision / our expertise lies in / we provide interactive solutions / we position ourselves in this market / how to serve our customers better / short-term pain for long-term gain / we will be rewarded in the long run / we play from our strength and improve our w...

commitment to excellence / strategic plan / o...

If this bears too close a resemblance to the speech you just heard from the boss of your company, then I ...

Testing its intellectual validity by translating it into simple logical arguments would rob it of a varying degree of its potency, sometimes excessively; nothing can be more bland than translated poetry.

Our human nature dictates a need for péché mignon.

Cute sin

“rational,” no-nonsense people, who do not understand why I cherish the poetry of Baudelaire and Saint-John Perse or obscure (and often impenetrable) writers like Elias Canetti, J. L. Borges, or Walter Benjamin.

the firehouse effect. He had observed that firemen with much downtime who talk to each other for too long come to agree on many things that an outside, impartial observer would find ludicrous (they develop political ideas that are very similar).

Normative economics is like religion without the aesthetics.

As the skeptics’ main teaching was that nothing could be accepted with certainty, conclusions of various degrees of probability could be formed, and these supplied a guide to conduct.

The first known rhetorician was a Syracusean named Korax, who engaged in teaching people how to argue from probability. At the core of his method was the notion of the most probable.

Indeed, for some strange reason during the Middle Ages, Arabs were critical thinkers (through their postclassical philosophical tradition) when Christian thought was dogmatic; then, after the Renaissance, the roles mysteriously reversed.

The French playboy trader Jean-Manuel Rozan discusses the following episode in his autobiography (disguised as a novel in order to avoid legal bills).The protagonist (Rozan) used to play tennis in the Hamptons on Long Island with Georgi Saulos,

What characterizes real speculators like Soros from the rest is that their activities are devoid of path dependence. They are totally free from their past actions. Every day is a clean slate.

There is no rational reason to keep a painting you would not buy at its current market rate—only an emotional investment.

Researchers found that purely rational behavior on the part of humans can come from a defect in the amygdala that blocks the emotions of attachment, meaning that the subject is, literally, a psychopath.

Where is Karl Popper to warn us against taking science—and scientific institutions—seriously?

We have been getting things wrong in the past and we laugh at our past institutions; it is time to figure out that we should avoid enshrining the present ones.

My lesson from Soros is to start every meeting at my 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

You attribute your successes to skills, but your failures to randomness.

It is a human heuristic that makes us actually believe so in order not to kill our self-esteem and keep us going against adversity.

one of the greatest poets who ever breathed is C. P. Cavafy.

Cato found it beneath him to have human feelings. A more human version can be read in Seneca’s Letters from a Stoic, a soothing and surprisingly readable book

Try not to blame others for your fate, even if they deserve blame.

CEOs are not entrepreneurs. As a matter a fact, they are often empty suits.

skill in getting promoted within a company rather than pure skills in making optimal decisions—we call that “corporate political skill.” These are people mostly trained at using PowerPoint presentations.