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 | Nassim Nicholas Taleb | A different way of thinking

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Fooled by Randomne...

	Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets Nassim Nicholas Taleb Random House Trade Paperbacks, 2005 - 368 pages average customer review:based on 381 reviews view larger image
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highly recommended

Fallacies of inductive reasoning

If you ever felt a little queasy about that article in the paper - the one that connected all the dots and claims to have explained yesterdays news - then this is a book you must read. Taleb covers a lot of ground, at times in seemingly sporadic jumps, but each chapter is a mini research library in itself. The reviews for this book span the whole gamut, and I will not try to add to the noise short of saying that if you are interested in probability, in how it affects our lives, and how it skews our perception of the world, then you should judge the book for yourself - I happened to have read it twice.

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A different way of thinking

Just a couple of small points...

First, as many have indicated, Fooled By Randomness is a bit of a prelude to The Black Swan, so I, too, highly recommend reading them in order. Reading the former is good preparation for the latter.

Second, I happened to start Fooled By Randomness having just finished with A Mountain Of Silence, an exposition of Eastern Orthodox wisdom, and what a supreme coincidence it was! For me, Taleb's message that we underestimate randomness, that a lot more things are out of our control than we think, that we insist on creative reasoning to assuage ourselves that we can explain and predict events, that we should 'tinker', and that we should live aesthetically with a view to improving ourselves, is perhaps intuitive to an 'Eastern' mind, but a different way of thinking in the West.

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A MUST read

A great book that everyone can read and understand. Wonderful insight into the ramdomness of life.

Not as good as the Black Swan

I read the Black Swan and I loved it. So, of course, I had to read this book too. It turned out to be a rehash of the same material, but not told with the same conviction. In the Black Swan he pulls no punches. Here he has not quite gotten all his material together and you can feel it. If I had not read the Black Swan I would have liked this book. But, since he wrote a better one, I would recommend the Black Swan and not this one.

He makes a point, but other sources do better

I'm one of the people who read Taleb's "The Black Swan" before I read this book (the reverse order of their publication dates) and the thesis is almost identical.

First, Taleb points out several studies that, in total, show that people (even experts) are irrational. That's no surprise. He points out that these systemic errors in judgement may also account for certain market behaviors. Again, no surprise.

Frankly, if you are thinking about buying this book you are better off buying How to Measure Anything: Finding the Value of "Intangibles" in Business by Douglas Hubbard. Hubbard addresses the same sources - and far more - of expert error. But Hubbard also talks about how to adjust for these errors with proven methods and he makes a much more air-tight case than Taleb. In yet another contrast to Taleb, Hubbard approaches all problems as if he, too, is subject to these irrational forces and the only defense is to realize it and take steps to offset it. Taleb seems to fall prey to Hubbard's observation "The most susceptable people are those who are convinced they are immmune to these errors".

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