Fooled by Randomness: The Hidden Role of Chance in the Markets and in Life Hardcover – October, 2001

NN Taleb will go down as one of the foremost philosophers of our times.

I don't exaggerate. I think he's that insightful.

He combines a cool, rational stoic mind with a deep Continental intellectual with a mouthy New Yorker.

"Fooled by Randomness" is the answer to the question: "Why did that guy make it, but those other guys who are just as good didn't?"

Why Google, and not Yahoo or some other type of Google we never heard about?

Why Amazon and Bezos, and not one of the 100s of other guys selling books out of their garages who didn't make it?

We as humans are full of cognitive biases. The Survivorship Bias is one of the most prevalent in our minds. No one is immune, but the more you know about it the easier it will be to catch.

Taleb goes into detail in what is basically a whole book on the Survivorship Bias, in his own unique style.

TL;DR

Pros:
-Basically a cognitive psychology book infused with a memoir
-I really like Taleb's writing/voice, and his true intellectual tangents that always come full circle
-Nice standalone to his "Incerto"/Black Swan series

Cons:
-You need to not compartmentalize the theme and concept into your mind. You might reach the end of the book and think "Well, everything is all chance and randomness. Why bother pursuing any worthwhile goal?"
-I believe he goes over this at the end, but not in enough of a lengthy manner to help less-read or less-willful readers realize his true intentions: to allow you to see the world for what it really is, and that luck plays a role in success. BUT, one way you succeed is by playing into luck, and then hedging your bets to keep your gains (as his successful friend did in one example).
-I like his writing style, but more sensitive readers may not like his style.

Fortuna Favors the Bold.

By Mayur Patel

How We Are All Fools of Randomness

This book was not the simplest book I have ever read, but very insightful for the market trader/investor. I will provide a little insight of my own into the realm of Nassim Taleb. I enjoyed the fact that the author explained concepts of the financial nature in the most basic manner. For a person not to savvy in financial terminology the book was readable, it was actually other topics that the author randomly introduced that was a little harder to read. The book is about how people, who invest in or trade in the market, fail or succeed due to factors outside of their control. The author brings to light many concepts that people more often than not overlook. The author provides countless examples to break his concepts down into a comprehensible level. One point that is emphasized throughout the book is that most people fall into a trap of luck.
Taleb started his book by introducing Solon, a Greek legislator. He began his book with Solon, because of Solon's wisdom, "...to admire a man's happiness that may yet, in course of time, suffer change. For the uncertain future has yet to come, with all variety of future; and him only to whom the divinity has[guaranteed] continued happiness until the end we may call happy."(Taleb 3). Then the author explained how people could do everything right, but still fail. This was due to a randomness factor. These factors can be a natural disaster, an election, a terrorist attack, etc. People can crunch every number in the world to until their fingers bleed, but still fail. People can have tips and inside knowledge, but still fail. The author stresses this idea of randomness and repetitively intertwines it into the different scenarios presented into this book. The beginning of the book, the concept of randomness was introduced via two characters Nero and John. Taleb shows how randomness affects both characters that are of opposite mindsets. He later tells of how people's decisions are affected by emotions. He demonstrates this by telling of an experiment done, where a person is alleviated from his emotions. The emotion stricken person was not even able to complete the simplest tasks. The author spoke of emotions, because without it people would get nothing accomplished, on the other hand, with emotions, people can act irrationally which leads to bad decisions. The author makes his position on journalist in his field quite clear. Without hesitation, his detestation for journalist simmered throughout the pages. The author does not agree with journalist, because they are people who are inexperienced in the financial field, yet write about it; they fail to understand randomness. Then their idiocracy(yes I know this is made up, but fits the situation so well) is then consumed by their readers, who take the written fallacies to heart, which can lead to inadequate decisions. Next, Taleb speaks of a Monte Carol engine, which I have gathered as something to produce data of scenarios ran a countless amount of times, with random situations passed into the scenarios every time. The author preferred Monte Carlo methods, because he could care less about the ideas behind mathematics, but only the application. I found this a little intriguing that a person that is so knowledgeable in the financial field, which deals mainly with numbers, does not care for the properties of mathematics. The next topic the author presents is the association of Darwinism and companies. Companies cannot be viewed in the survival of the fittest manner, because the Darwinian ideas cannot and do not accommodate for randomness, which we learn from this book is a big part of the business world. Randomness can be either good or bad, essentially it will all come down to luck. A person will be either lucky or unlucky, but the author explains that eventually it will reverse itself and the unlucky will become lucky and the lucky become unlucky. Taleb introduces many significant subject matter experts throughout the book to support his claim of people being fooled by randomness.

I feel as if the author was a bit random himself. The way the text was presented seemed a little unorthodox to me. The author would present a subject, talk about it, provide examples about it, but then the next topic would be totally off on some other tangent, while all in the same chapter. I'm not even sure if everything written in the book could be tied back to randomness in some manner, but that I will go ahead and assume is to be blamed on my inexperience on the subject matter. The structure of the book is one thing I did not agree with. Although, this is the style of writing the author may have intended. I believe the book was well conversed and definitely and eye opener. Taleb did well in explaining complex material in a simplified fashion. I enjoyed all of the examples presented in the book; I felt they gave the book some character. I understand I cannot be considered a person well versed in the financial world, so everything written here completely opinion based. The main piece of knowledge I can confidently say I have gained from this book is that there is nothing that can be done to tame this unforgiving beast that is randomness.

For a book whose topic is of a subject that, I believe, many would consider of a dull nature was quite interesting. The book kept my interest with its comprehensible examples and insightful views. I definitely would recommend this book to anyone that has dealings in the economic world. Actually, I honestly believe this book could just about relate to anyone and everyone, because randomness is part of everyone's lives. I did not ever consider randomness to ever be as big of a factor in life as, I know it is, now. I will take the knowledge gained from reading this book and hopefully put it to good use.

I would have given the book 5 stars but there were some grammatical and syntax errors that bothered me. I guess I am used to editors who fix that kind of thing. But maybe that's not a good thing, maybe language irregularities are the way a language grows, so what one person calls an error another could call progress. But hey, don't we need some kind of standard, I mean where is the stability?

Aha - that is one of the issues this book tackles - the randomness of events that shakes us up. We expect the the world to be rational, that there are reasons for things and if we don't know the reason someone, usually Google or wikipedia does know.
Ah, but there you would be wrong, there are irrational things, random unforseeable events that happen more often than you think, events that affect us and we have to react to them. These are the kind of things I have always been thinking about, how we make decisions, how much of what happens to us we can control and what role luck or chance plays. Turns out that all these years that I have thinking about this and writing about them in my private journal, others have been producing books and getting PHd's, writing about this stuff and calling them theories and fitting them into existing categories of economics, mathematics, psychology and others I can't think of at the moment. See, if I was more motivated I could be writing these books instead of reviewing them on Amazon and Goodreads.
In conclusion, I highly recommend this book to those who are interested in learning about how others see the world There are certain conclusions and insights which really can shine a beacon on the irrationality that surrounds us all. For example - how is success measured, by results or by the process?
The most important insight I gleaned from this book, I think , is not to congratulate yourself too much for success, or berate yourself too much on failure - there is more randomness than you think. Just do what you think is right and proper for your life and loved ones, hope for the best and prepare for the worst.