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

Nassim Nicholas Taleb
3.8 out of 5 stars  See all reviews (596 customer reviews)

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Book Description

Fooled by Randomness is a standalone book in Nassim Nicholas Taleb’s landmark Incerto series, an investigation of opacity, luck, uncertainty, probability, human error, risk, and decision-making in a world we don’t understand. The other books in the series are The Black Swan, Antifragile, and The Bed of Procrustes.

“[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: #24,106 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

Most Helpful Customer Reviews
247 of 258 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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217 of 235 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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175 of 193 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 One of my favorite books
One of my favorite books for its wit and refreshing perspective. It's the kind of book that needs re-reading every now and then.
Published 4 hours ago by Defeasance
4.0 out of 5 stars Like the Author
Like anything by author. Not easy reading, but worth it.
Published 1 day ago by Debbls
5.0 out of 5 stars Very insightful
Although the author can come across as condescending, the book is insightful and presents diverse thinking from a wide array of disciplines, from statistics to behavioral economics... Read more
Published 29 days ago by Robert
5.0 out of 5 stars This book is every bit as good as its author thinks it is - which is...
I hate heaping praise onto an author with as big an ego as Taleb clearly has, but as they say in Texas, if it's true, it ain't braggin'. You SHOULD read this book. Read more
Published 1 month ago by Wayne B. Norris
5.0 out of 5 stars Five Stars
Love how Taleb takes down all the namby pamby types who demand theoretical and mathematical purity.
Published 1 month ago by Lincott
5.0 out of 5 stars Essential Reading for Life
This book is fantastic and sensible. Will open your eyes to the world around you. Taleb is the greatest living philosopher.
Published 1 month ago by Owen F. Long
5.0 out of 5 stars A real brain screw
By reading this book, you become uncomfortably aware how limited and wrong your perception of the world is. Read more
Published 1 month ago by Raul
5.0 out of 5 stars A masterpiece from the Maestro!
This is a non-narrative book to be read for anyone who wants to acknokledge how significant is the influence randomness exerts in our every day lives. Read more
Published 1 month ago by Juan Rogelio
5.0 out of 5 stars One of the most unorthodox books in Economics :)
One of the most unorthodox books, which challenges the correctness of already established laws and forces US to think of the other side, which we generally tend to ignore. Read more
Published 1 month ago by Ashutosh Shukla
5.0 out of 5 stars Not for me.
I was looking forward to this book and it looked promising initially. However, as I read more the arguments became repetitious and I lost interest. Disappointing.
Published 2 months ago by Alvin Dix
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More About the Author

Nassim Nicholas Taleb spent two decades as a trader and risk taker before becoming a full-time essayist and scholar focusing on practical, philosophical and mathematical problems with chance, luck, and probability. His focus in on how different systems handle disorder.

Taleb is currently Distinguished Professor of Risk Engineering at New York University's School of Engineering, but he spends most of his time in the intense seclusion of his study, or as a flâneur meditating in cafés.

He is the author of the Incerto (latin for uncertainty), accessible in any order (Antifragile, The Black Swan, The Bed of Procrustes, and Fooled by Randomness) plus a freely available Technical Companion, Silent Risk, in addition to technical works. Taleb's books have more than 100 translations in thirty-five 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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