Fooled by Randomness Quotes

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Fooled by Randomness Quotes
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“In that sense the description coming from journalism is certainly not just an unrealistic representation of the world but rather the one that can fool you the most by grabbing your attention via your emotional apparatus—the cheapest to deliver sensation. Take”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“How? Probability is not a mere computation of odds on the dice or more complicated variants; it is the acceptance of the lack of certainty in our knowledge and the development of methods for dealing with our ignorance.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“We need tricks to get us there but before that we need to accept the fact that we are mere animals in need of lower forms of tricks, not lectures.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“This anchoring to a number is the reason people do not react to their total accumulated wealth, but to differences of wealth from whatever number they are currently anchored to. This is the major conflict with economic theory, as according to economists, someone with $1 million in the bank would be more satisfied than if he had half a million. But”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“You may prefer apples to oranges, oranges to pears, but pears to apples—it depends on how the choices are presented to you. The”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“Our brain is not cut out for nonlinearities. People think that if, say, two variables are causally linked, then a steady input in one variable should always yield a result in the other one. Our emotional apparatus is designed for linear causality. For”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“These traders lose money frequently, but in small amounts, and make money rarely, but in large amounts. I call them crisis hunters. I am happy to be one of them.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“There is a Yiddish saying: “If I am going to be forced to eat pork, it better be of the best kind.” If I am going to be fooled by randomness, it better be of the beautiful (and harmless) kind.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“On the one hand, I try to define myself and behave officially as a no-nonsense hyperrealist ferreting out the role of chance; on the other, I have no qualms indulging in all manner of personal superstitions. Where do I draw the line? The answer is aesthetics.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“(If you think that you can control your emotions, think that some people also believe that they can control their heartbeat or hair growth.)”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“In their intense meditation the hidden sound of things approaching reaches them and they listen reverently while in the street outside the people hear nothing at all.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“The consequences are not trivial: It means that rational thinking has little, very little, to do with risk avoidance. Much of what rational thinking seems to do is rationalize one’s actions by fitting some logic to them.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“Needless to say that the ideas of this book fall squarely into the Tragic category: We are faulty and there is no need to bother trying to correct our flaws. We are so defective and so mismatched to our environment that we can just work around these flaws.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“We would not even need a statistician; a second-rate engineer would do.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“It is hard to resist discussion of artificial history without a comment on the father of all pseudothinkers, Hegel. Hegel writes a jargon that is meaningless outside of a chic Left Bank Parisian café or the humanities department of some university extremely well insulated from the real world.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“While the meetings included traders, that is, people who are judged on their numerical performance, it was mostly a forum for salespeople (people capable of charming customers), and the category of entertainers called Wall Street “economists” or “strategists,” who make pronouncements on the fate of the markets, but do not engage in any form of risk taking, thus having their success dependent on rhetoric rather than actually testable facts.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“I am also realizing the nonlinear effect behind success in anything: It is better to have a handful of enthusiastic advocates than hordes of people who appreciate your work—better to be loved by a dozen than liked by the hundreds. This applies to the sales of books, the spread of ideas, and success in general and runs counter to conventional logic. The information age is worsening this effect.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“What he likes most about proprietary trading is that it requires considerably less time than other high-paying professions; in other words it is perfectly compatible with his non-middle-class work ethic. Trading forces someone to think hard; those who merely work hard generally lose their focus and intellectual energy. In addition, they end up drowning in randomness; work ethics, Nero believes, draw people to focus on noise rather than the signal”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“reality does not have the same closed and symmetric laws and regulations as games.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“I have anecdotal evidence in my business that MBAs tend to blow up in financial markets, as they are trained to simplify matters a couple of steps beyond their requirement. (I beg the MBA reader not to take offense; I am myself the unhappy holder of the degree.)”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“Alas, investors and businesses are not paid in probabilities; they are paid in dollars. Accordingly, it is not how likely an event is to happen that matters, it is how much is made when it happens that should be the consideration. How frequent the profit is irrelevant; it is the magnitude of the outcomes that counts.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“Self-contradiction is made culturally to be shameful, a matter that can prove disastrous in science.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“Our bias is immediately to establish a causal link. While”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“The correct answer should be that the probability of being afflicted with the disease for someone selected at random who presented a positive test is the following ratio: Number of afflicted persons
________________________
Number of true and false positives here 1 in 51.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
________________________
Number of true and false positives here 1 in 51.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“A test of a disease presents a rate of 5% false positives. The disease strikes 1/1,000 of the population. People are tested at random, regardless of whether they are suspected of having the disease. A patient’s test is positive. What is the probability of the patient being stricken with the disease?”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“Rather, we are simply testing for any encounter, with any person we have ever met in the past, and in any place we will visit during the period concerned. The probability of the latter is considerably higher, perhaps several thousand times the magnitude of the former.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“We saw in Chapter 5 how people may survive owing to traits that momentarily fit the given structure of randomness.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“Why is finance so rich a field? Because it is one of the rare areas of investigation where we have plenty of information (in the form of abundant price series), but no ability to conduct experiments as in, say, physics. This dependence on past data brings about its salient defects.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“These biases can be outlined as follows: (a) The survivorship biases (a.k.a. monkeys on a typewriter) arising from the fact that we see only winners and get a distorted view of the odds (Chapters 8 and 9, “Too Many Millionaires” and “Fry an Egg”), (b) the fact that luck is most frequently the reason for extreme success (Chapter 10, “Loser Takes All”), and (c) the biological handicap of our inability to understand probability (Chapter 11, “Randomness and Our Brain”).”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
“I do not deny that if someone performed better than the crowd in the past, there is a presumption of his ability to do better in the future. But the presumption might be weak, very weak, to the point of being useless in decision making. Why? Because it all depends on two factors: The randomness content of his profession and the number of monkeys in operation.”
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
― Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets