Fooled by Randomness Quotes

“He can work any hours he likes, travel at a whim, and engage in all manner of personal pursuits.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“They are left alone to do as they please, provided of course that their results satisfy the executives.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“So, Nero switched careers to what is called proprietary trading.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“Clearly risk taking is necessary for large success—but it is also necessary for failure.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“most successes are caused by very few “windows of opportunity,” failing to grab one can be deadly for one’s career.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“chance favors the prepared!”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“sometimes life requires compromises:”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“There may be great information in the fact that nothing took place. As Sherlock Holmes noted in the Silver Blaze Case - the curious thing was that the dog did not bark.”
― Nassim Nicholas Taleb, Fooled By Randomness - The Hidden Role Of Chance In Life And In The Markets - Second Edition

“If people were rational, their rationality would cause them to figure patterns from the past and adapt, so that past information would be completely useless for predicting the future.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets 2nd (second) edition

“Statistics to the layman can appear rather complex, but the concept behind what is used today is so simple that my French mathematician friends call it deprecatorily "cuisine". It is all based on one simple notion; the more information you have the more you are confident about the outcome. Now the problem: by how much? Common statistical method is based on the steady augmentation of the confidence level, in nonlinear proportion to the number of observations. That is, for an n time increase in the sample size, we increase our knowledge by the square root of n. Suppose i'm drawing from an urn containing red and black balls. My confidence level about the relative proportion of red and black balls after 20 drawings in not twice the one I have after 10 drawings; it's merely multiplied by the square root of 2.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“My problem is that I'm not rational.”
― Nassim Nicholas Taleb, Fooled by Randomness

“Aut tace aut loquere meliora silencio: only when the words outperform silence”
― Nassim Nicholas Taleb, Fooled By Randomness - The Hidden Role Of Chance In Life And In The Markets - Second Edition

“Just as one day some primitive tribesman scratched his nose, saw rain falling, and developed an elaborate method of scratching his nose to bring on the much-needed rain, we link economic prosperity to some rate cut by the Federal Reserve Board, or the success of a company with the appointment of the new president “at the helm.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“The wise man listens to meaning; the fool only gets the noise. The modern Greek poet C. P. Cavafy wrote a piece in 1915 after Philostratus’ adage “For the gods perceive things in the future, ordinary people things in the present, but the wise perceive things about to happen.” Cavafy wrote: In”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“I do not like the asphyxiating structure of competitive games and the diminishing aspect of deriving pride from a numerical performance. I also learned to stay away from people of a competitive nature, as they have a tendency to commoditize and reduce the world to categories, like how many papers they publish in a given year, or how they rank in the league tables. There is something nonphilosophical about investing one’s pride and ego into a “my house/library/car is bigger than that of others in my category”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“that which came with the help of luck could be taken away by luck (and often rapidly and unexpectedly at that). The flipside, which deserves to be considered as well (in fact it is even more of our concern), is that things that come with little help from luck are more resistant to randomness.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“Another way to see the beastly aspect of schedules and rigid projections is to think in limit situations. Would you like to know with great precision the date of your death? Would you like to know who committed the crime before the beginning of the movie? Actually, wouldn’t it be better if the length of movies were kept a secret?”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“judged by their actions, not by the results. No matter how sophisticated our choices, how good we are at dominating the odds, randomness will have the last word.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“These nonlinear dynamics have a bookstore name, “chaos theory,” which is a misnomer because it has nothing to do with chaos. Chaos theory concerns itself primarily with functions in which a small input can lead to a disproportionate response. Population models, for instance, can lead to a path of explosive growth, or extinction of a species, depending on a very small difference in the population at a starting point in time. Another popular scientific analogy is the weather, where it has been shown that a simple butterfly fluttering its wings in India can cause a hurricane in New York.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“I prefer to remain a skeptic. People frequently misinterpret my opinion. I never said that every rich man is an idiot and every unsuccessful person unlucky, only that in absence of much additional information it is preferable to reserve one’s judgment. It is safer. Ten • LOSER TAKES ALL—ON THE NONLINEARITIES OF LIFE The nonlinear viciousness of life.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“If the past, by bringing surprises, did not resemble the past previous to it (what I call the past’s past), then why should our future resemble our current past?”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“This problem enters the business world more viciously than other walks of life, owing to the high dependence on randomness (we have already belabored the contrast between randomness-dependent business with dentistry). The greater the number of businessmen, the greater the likelihood of one of them performing in a stellar manner just by luck. I have rarely seen anyone count the monkeys. In the same vein, few count the investors in the market in order to calculate, instead of the probability of success, the conditional probability of successful runs given the number of investors in operation over a given market history.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“1. Theories that are known to be wrong, as they were tested and adequately rejected (he calls them falsified). 2. Theories that have not yet been known to be wrong, not falsified yet, but are exposed to be proved wrong.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“The way they introduced rigor into intellectual life is by declaring that a statement could fall only into two categories: deductive, like “2 +2 =4,” i.e., incontrovertibly flowing from a precisely defined axiomatic framework (here the rules of arithmetic), or inductive, i.e., verifiable in some manner (experience, statistics, etc.),”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“Alan 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.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“By dumping the kitchen sink of scientific references in a paper, one can make another literary intellectual believe that one’s material has the stamp of science.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“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. This is even more apparent when the literary intellectual starts using scientific buzzwords, like “uncertainty principle,” “Gödel’s theorem,” “parallel universe,” or “relativity,” either out of context or, as often, in exact opposition to the scientific meaning. I suggest reading the hilarious Fashionable Nonsense by Alan Sokal for an illustration of such practice (I was laughing so loudly and so frequently while reading it on a plane that other passengers kept whispering things about me).”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“Our emotions are not designed to understand the point. The dentist did better when he dealt with monthly statements rather than more frequent ones. Perhaps it would be even better for him if he limited himself to yearly statements. (If you think that you can control your emotions, think that some people also believe that they can control their heartbeat or hair growth.)”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“Consider the situation where the dentist examines his portfolio only upon receiving the monthly account from the brokerage house. As 67% of his months will be positive, he incurs only four pangs of pain per annum and eight uplifting experiences. This is the same dentist following the same strategy. Now consider the dentist looking at his performance only every year. Over the next 20 years that he is expected to live, he will experience 19 pleasant surprises for every unpleasant one!”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

“A 15% return with a 10% volatility (or uncertainty) per annum translates into a 93% probability of success in any given year. But seen at a narrow time scale, this translates into a mere 50.02% probability of success over any given second as shown in Table 3.1. Over the very narrow time increment, the observation will reveal close to nothing. Yet the dentist’s heart will not tell him that. Being emotional, he feels a pang with every loss, as it shows in red on his screen. He feels some pleasure when the performance is positive, but not in equivalent amount as the pain experienced when the performance is negative.”
― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets