Fooled by Randomness

This book contains a lot of gems about how statistics can be used and misunderstood. 

I loved that the book illustrated a concept I have been pondering a lot myself: the importance of risk in our lives and survivorship bias. For instance, many successful people take many risks and are the survivors we see, while there may be a lot of people taking similar risks that we never hear about.

Taleb comes off as arrogant in this book but he holds himself to the same standards he judges others by. To me, it is extreme to the point of becoming… show more.

The investment world is dominated by players who essentially have the same beliefs and say the same things. I love writers who offer a unique perspective informed by an independent framework.

One of the greatest challenges in investing is distinguishing luck from skill. Taleb does a masterful job of raising the readers’ awareness of this common oversight. I believe reading this book will make you a more thoughtful investor. 

Nassim Nicholas Taleb published several bestselling books, including The Black Swan and Antifragile, after his Fooled by Randomness established randomness, luck, and uncertainty as concepts that nobody should ignore when analyzing the past and making decisions about the future. Some people dislike Taleb’s arrogance but I do recommend this book because I dislike the arrogance of the establishment, especially when they attribute all their successes to skill while blaming others for their failures. We all like order and certainty, so it’s easy to swallow the nice but misleading theories of experts and scientists who ignore the reality of randomness… show more.

Fooled by Randomness is one of the best books I have ever read on the trouble of working with real-world data. Many times we think that real-world data is easy to work with but it’s full of noise instead. But what kind of noise can quickly get us into trouble. In this book, Taleb goes into detail about common traps and pitfalls to avoid so that we don’t re-create the 2008 financial crash again.

It’s always good to stay humble and this book helps us as business owners and investors do that. This book serves as a good reminder of how big of a role both 1. Chance and 2. Irrationality play in our everyday lives. It teaches us how to embrace this fact and leverage it to our advantage in life. Don’t read this book if you appreciate thinking in a bubble along with the masses.

Taleb has written a handful of wonderful books exploring the ways in which human beings tend to systematically misunderstand the world. This was his first, and it’s a fantastic place to begin. As the title suggests, he’s fascinated by the ways in which chance events can seem significant when, in fact, this significance is merely an illusion; how, for example, we can’t resist seeing events in terms of cause and effect even when this is wishful nonsense. Taleb is a risk expert and mathematician – but he’s also a dazzling explainer and fearless provocateur, drawing on history and personal experience… show more.