Book Review Fooled By Randomness

The Hidden Role of Chance in Life and in the Markets

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Genre  Philosophy, Finance

Author  Nassim Nicolas Taleb

Pages    316

Year of Publish 2001

 About the Author 

 Nassim Nicholas Talab was born in Lebanon in 1960. He is a well-known American-Lebanese author, researcher who specializes in philosophy, skilled trader, and financial advisor. He is also a multilingual person who speaks English, Arabic, Italian, French, and Spanish fluently.

He currently holds the title of Dean's Professor in the University of Massachusetts' Science department. Taleb emphasises the impact of chance in every circumstance.

He also authored AntiFragile, The Black Swan, and The Bed of Procrustes,  Skin in the game.

Table of Contents

• If You’re So Rich, Why Aren’t You So Smart?
• A Bizarre Accounting Method
• A Mathematical Meditation On History
• Randomness, Nonsense, And The Scientific  Intellectual
• Survival Of The Least Fit–Can Evolution Be Fooled By Randomness?
• Skewness And Asymmetry
• The Problem Of Induction
• Too Many Millionaires Next Door
• It Is Easier To Buy And Sell Than Fry An Egg
• Loser Takes All—On The Nonlinearities
• Eleven Randomness And Our Mind: We Are
• Probability Blind
• Gamblers’ Ticks And Pigeons In A Box
• Carneades Comes To Rome: On Probability And Skepticism
• Bacchus Abandons Antony

Summary Fooled By Randomness

Although this book is not classified as self-helped books, nor can come in handy in dealing with the crest and trough of life. It will be justified to say getting to know about the art of misallocating risk. Nassim Nicolas Table's "Fooled by Randomness" is a work to understand how luck regulates our success or failures. It discusses three ideas precisely. 

 
1. "Randomness plays an important role in our life" :  Taking the example of a coin-flipping competition with one thousand people. With every result, near to half people are out of the game and after ten flips we get a winner. But when the same process is repeated, there are 1/1000 chances of the same guy winning. So we must not be fully dependent on randomness results.

 
2.  "Survivorship Bias": Taleb argues mild success decorated with hard work & skill,  but extreme success is more likely to be due to randomness. Taking the example of first American Idol winner "Kelly Clarkson", she had no idea how to lure the audience and judges, it was simply her instinct that was favorable during that moment. Had she came in later on the same platform, her chances of success may be less.

 
3. "Chance favors hard work & skill": Hardwork reduces the chances of randomness, as one becomes more aware of his surrounding, leading to more logical decisions and the chances of success increases.

Assuming all the good qualities causing success - It cannot be interpreted that only hardworking, intelligent, preserving persons will get success. The other side is equally practical. The book questions the rule of thumb against its empirical validity.
 
Taleb argues that wild success which is attributable to variance should not be compared with mild success which can be explained by skills and labor. Therefore, what comes with the help of luck can also be taken back by luck.
 
"The reader can see author unusual notion of alternative accounting: 
$10 million dollars earned through Russian Roulette does not have the same value as the same amount earned through a business. Although they are the same, they can fetch the same luxury, except that one's dependence on randomness is greater than the other. The real world is more vicious than Russian Roulette.

Book Review Fooled By Randomness

I was drawn to the title "Fooled by Randomness," which led me to assume that the author was trying to prove that randomness itself is deceiving. But it turned out that the book's tone and tenor were precisely the opposite. Putting aside the overall skepticism of the text, there are several pearls worth reflecting on. If the author is to be taken seriously, no one should conduct any scientific or technological research.

To be fair to the author, I must also express my gratitude for this book's discovery of "talent as the causal celebration" for some people's stairs to notoriety. It accomplishes this by convincingly swapping out that (talent) with the blessing of randomness-it was pleasant, I have to admit.

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