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Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets [Kindle Edition]

Nassim Nicholas Taleb
3.8 out of 5 stars  See all reviews (582 customer reviews)

Print List Price: $17.00
Kindle Price: $9.37
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Sold by: Random House LLC

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Book Description

“[Taleb is] Wall Street’s principal dissident. . . . [Fooled By Randomness] is to conventional Wall Street wisdom approximately what Martin Luther’s ninety-nine theses were to the Catholic Church.”
Malcolm Gladwell, The New Yorker

Finally in paperback, the word-of-mouth sensation that will change the way you think about the markets and the world.This book is about luck: more precisely how we perceive luck in our personal and professional experiences.

Set against the backdrop of the most conspicuous forum in which luck is mistaken for skill–the world of business–Fooled by Randomness is an irreverent, iconoclastic, eye-opening, and endlessly entertaining exploration of one of the least understood forces in all of our lives.


From the Trade Paperback edition.


Editorial Reviews

Amazon.com Review

If the prescriptions for getting rich that are outlined in books such as The Millionaire Next Door and Rich Dad Poor Dad are successful enough to make the books bestsellers, then one must ask, Why aren't there more millionaires? In Fooled by Randomness, Nassim Nicholas Taleb, a professional trader and mathematics professor, examines what randomness means in business and in life and why human beings are so prone to mistake dumb luck for consummate skill. This eccentric and highly personal exploration of the nature of randomness meanders from the court of Croesus and trading rooms in New York and London to Russian roulette, Monte Carlo engines, and the philosophy of Karl Popper. Part of what makes this book so good is Taleb's ability to make seemingly arcane mathematical concepts (at least to this reviewer) entirely relevant in evaluating and understanding everything from the stock market to the success of those millionaires cited in the aforementioned bestsellers. Here's an articulate, wise, and humorous meditation on the nature of success and failure that anyone who wants a little more of the former would do well to consider. Highly recommended. --Harry C. Edwards

From Publishers Weekly

In this look at financial luck, hedge fund manager Taleb (Dynamic Hedging) addresses the apparently irrational movement of money markets around the world. Using his own investing experience and examples of others' successes and disappointments, he discusses theories like Monte Carlo math (easy; considered cheating by purists) and the concept of Russian roulette. Taleb tells interesting, well-wrought stories about individual behavior: "While Nero has succeeded beyond his wildest dreams, both personally and intellectually, he is starting to consider himself as having missed a chance somewhere." While serious investors and mathematics enthusiasts will be intrigued, readers looking for practical investment strategies will be disappointed by this rambling intellectual discourse. Tables. 40,000-copy first printing; $150,000 marketing budget.

Copyright 2001 Cahners Business Information, Inc.


Product Details

  • File Size: 642 KB
  • Print Length: 369 pages
  • Page Numbers Source ISBN: 1400067936
  • Publisher: Random House; 2 Updated edition (October 14, 2008)
  • Sold by: Random House LLC
  • Language: English
  • ASIN: B001FA0W5W
  • Text-to-Speech: Not enabled
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  • Lending: Not Enabled
  • Amazon Best Sellers Rank: #20,450 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

Most Helpful Customer Reviews
225 of 235 people found the following review helpful
3.0 out of 5 stars Good, But A Personal Memoir, Not a Treatise September 13, 2005
Format:Hardcover
REVIEW: This book tends to elicit very strong opinions about its quality (both very good and very bad) so it is important to know which camp you are in before you purchase it or you may be very disappointed. I found that both the very bullish and the very bearish reviews have significant merit. On the plus side Taleb aggressively addresses a topic that many readers will be interested in - randomness in our daily lives. He discusses many important concepts that are not known or at least not very well understood by the general public and experts alike. These include: 1) that uncertainty and luck play a large role in the outcomes of human activities (much more than most people think); 2) that a correlation between two types of events does not necessarily mean that one causes the other; 3) that statistics and the rare random event are poorly understood by almost everyone; 4) that small differences in performance and ability can cause very large differences in the rewards or difficulties that people obtain in life; and 5) that humans are very irrational beings and are not very good at thinking probabilistically and understanding the probabilities of even everyday events rationally. All of these are important points that I commend Taleb for bringing to our attention.

However, there are significant drawbacks to this book, which to some readers will make the book significantly unenjoyable or even impossible to read. While it did not significantly bother me, Taleb does have an attitude or style which at times tends to the snobbish. The author repeatedly reminds readers that he is well traveled, is a "voracious" reader, pursues his exercise routines "assiduously", and is from upper class Mediterranean roots.
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214 of 231 people found the following review helpful
By A Customer
Format:Hardcover
Anyone who holds any doubts in regards to the validity of this book must read Edward Chancellor's 'Devil Take the Hindmost,' which provides a history of financial markets from the dawn of the Roman Empire up to now. After reading such a sweeping historical account, one sees the financial markets for exactly what they have always been: one vast bubble machine where people have even invested in, according to Chancellor, a company that refused to explain anything about what it did but simply assured the investors that it had a great idea for making money. Sounds rather similar to some of the dot coms in recent years. Through a compliation of both antecdotes and thoughts, Taleb provides an explanation as to why the markets work in this way, why so many fail to realize this, and how these issues are mirrored in our everyday lives. He addresses many issues that everyone should understand in order to view the world in a realistic manner. Evolution is not a one way road to nirvana but rather the process through which those adapted to the current situation fare better, and they may not be best adopted when things change. When judging the validity of any strategy in business or in life one must consider that the winners write the history books; you can only talk to survivors of war but that certainly doesn't mean that everyone survives it. When deducing anything from viewing a sample you must consider the forces that created that sample: should you consider yourself unintelligent because you're behind your classmates at a top law school? Are a good outcome and a good decision the same thing, and likewise for a bad outcome and a bad decision? And the list goes on. Read more ›
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173 of 190 people found the following review helpful
3.0 out of 5 stars Intiguing but ultimately unsatisfying April 30, 2002
Format:Hardcover|Verified Purchase
I bought FOOLED BY RANDOMNESS after reading the Malcolm Gladwell profile on Nassim Nicholas Taleb in the April issue of the New Yorker. Like others who have reviewed this book, I found that Gladwell captured the most important details of Taleb's thoughts in a shorter, more entertaining way. However, I thought that this book can be a worthwhile read for those with a passion for this type of book.
FOOLED BY RANDOMNESS is an introduction to the difficulties human beings have at reasoning around probability. Taleb argues that human beings are genetically hardwired to misattribute the results of human endeavors to skill and knowledge that are, in fact, just coincidental, random events. Taleb discusses the results of this embedded flaw in human reasoning in three areas.
In part 1, Taleb discusses impacts of `rare events' on both financial markets and on human history. Taleb argues we should beware seemingly successful strategies if they are not proven by the test of history. In particular, we should examine human history in the long term for general trends and treat skeptically claims that humanity has reached `the end of history' or `a new economic model' where the old, proven rules do not apply.
In part 2, Taleb discusses the `survivor effect', or mistaking success based on luck for success based on skill. In particular, Taleb warns against judging a strategy by its actual results. Instead, we should judge strategies based upon a sum of all possible outcomes.
In part 3, Taleb briefly discusses `tricks' he has developed to try and derail his flawed, ingrained, statistical reasoning and live a rational and, to a great degree, classical life based upon a good understanding of the effect of randomness on our lives.
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Most Recent Customer Reviews
5.0 out of 5 stars Fooled by Randomness audio snippet (not audio book:))
Full of really good information. I do not hope to do better than the other reviewers except to voice my opinion in that regard. Read more
Published 3 hours ago by Terren Richard Faloh
5.0 out of 5 stars Intriquing
Never have I read anything that exemplifies the conflict between rational thought and irrational behavior quite so strikingly. Read more
Published 3 days ago by Amazon Customer
4.0 out of 5 stars This Guy spends too much time smelling his own farts.
Good book with insighful remarks on market behavior both psyclogically and in a non quantative statistical way. However, his style makes me want to deck him. Read more
Published 24 days ago by afields500
1.0 out of 5 stars the Woody Allen of economic and market analysis
the best written book I've ever read about a total falsehood in the market place: that price pattern is actually random. Read more
Published 1 month ago by TrdrB
5.0 out of 5 stars Tough Read
Amazing philosophicoscience by Taleb but makes the world much clearer. I do not doubt the message and incorporate it into my consciousness daily. Read more
Published 1 month ago by wmbrain
4.0 out of 5 stars 5 stars for content, 3 stars for delivery
This book had great content on how we are fooled by randomness on a regular basis. However, the author was so arrogant that it was sometimes hard to read. Read more
Published 1 month ago by Michelle
5.0 out of 5 stars excellent. much better than I expected
Taleb can be insufferable, witness Antifragile. The self congratulation can wear thin, but I thoroughly enjoyed Fooled by Randomness. Read more
Published 1 month ago by Bryan Smith
3.0 out of 5 stars Financial Investor must read
If you are an investor and believe in your ability to beat the market then this is a must read. There are lots of black swans out there just waiting to happen and you have not... Read more
Published 1 month ago by AMCHIKER
5.0 out of 5 stars Another favorite book of mine
The thesis, that randomness accounts for about 95% of our lives' experiences, of what happens to us, is very revealing. Read more
Published 2 months ago by Richard Coury
4.0 out of 5 stars This is a warning
This book is very convincing, and if you buy into it, it may overshadow your worldview in a way that is not entirely pleasant. Read more
Published 2 months ago by Sisyphus
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More About the Author

Nassim Nicholas Taleb has devoted his life to problems of uncertainty, probability, and knowledge. He spent two decades as a trader before becoming a philosophical essayist and academic researcher. Although he now spends most of his time either working in intense seclusion in his study, or as a flâneur meditating in cafés across the planet, he is currently Distinguished Professor of Risk Engineering at New York University's Polytechnic Institute. His main subject matter is "decision making under opacity", that is, a map and a protocol on how we should live in a world we don't understand.

His works are grouped under the general title Incerto (latin for uncertainty), composed of a trilogy accessible in any order (Antifragile, The Black Swan, and Fooled by Randomness) plus two addenda: a book of philosophical aphorisms (The Bed of Procrustes) and a freely available Technical Companion. Taleb's books have been published in thirty-three languages.

Taleb believes that prizes, honorary degrees, awards, and ceremonialism debase knowledge by turning it into a spectator sport.

""Imagine someone with the erudition of Pico de la Mirandola, the skepticism of Montaigne, solid mathematical training, a restless globetrotter, polyglot, enjoyer of fine wines, specialist of financial derivatives, irrepressible reader, and irascible to the point of readily slapping a disciple." La Tribune (Paris)

A giant of Mediterranean thought ... Now the hottest thinker in the world", London Times

"The most prophetic voice of all" GQ

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Welcome to the Fooled by Randomness forum
FBR in a nutshell: Don't confuse luck for skill (5 words)
Mar 28, 2008 by Michael F. Murphy |  See all 11 posts
Kindle Edition
Somehow that seems to be consistent with the author's personality :)
Mar 11, 2013 by E. Douglas Jensen |  See all 2 posts
Awesome book! Be the first to reply
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