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Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets | 
 enlarge | Author: Nassim Nicholas Taleb
Publisher: Penguin
Category: Book
List Price: £9.99
Buy New: £4.00
You Save: £5.99 (60%)
New (23) Used (4) from £4.00
Rating:  26 reviews
Sales Rank: 536
Media: Paperback
Pages: 368
Shipping Weight (lbs): 0.6
Dimensions (in): 7.8 x 4.9 x 0.9
ISBN: 0141031484
EAN: 9780141031484
ASIN: 0141031484
Publication Date: May 3, 2007
Availability: Usually dispatched within 1-2 business days
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| Customer Reviews: Read 10 more reviews...
 An antidote to clueless gurus September 4, 2007
Dr. M. L. Poulter (Bristol, UK)
55 out of 57 found this review helpful
I was ambivalent about this book when I picked it up, but was quickly gripped and had to read to the end.
This book is about the Illusion of Control on a massive scale: a refusal to acknowledge blind luck's contribution to our success. Taleb is a trader as well as a scholar, and mixes his logical points with many tales about the "Masters of the Universe": traders who, with a run of successful investment, become rich, promoted and profiled in Fortune magazine. Given the huge numbers of people who become traders, the number of these high-flyers is pretty much what you would expect by chance. The logical conclusion is that there is no evidence that any of these traders have any real skill, or that any of the investment advice given by gurus and journalists has any value. This contrasts with other walks of life where skill and practice are necessary: you couldn't become a concert pianist by blind luck, for example.
Yet the finance industry refuses to acknowledge this. Noise (the natural volatility of the market) is mistaken for signal (understandable and predictable responses to events), and hence pure luck is mistaken for skill. When the hot-shot trader loses all his money, and is escorted from the building by security, it comes as a total surprise to him.
Embarrassingly for his targets, Taleb is not advancing some daring new theory. He just uses probability theory, basic statistics and a knowledge of the psychological research on biases: the toolbox of an informed critical thinker. He shows how professionals in finance, the media and even academia repeatedly fail to use these basic tools: ignoring probabilities, drawing bold conclusions from minuscule evidence, or focusing on probabilities but ignoring values of outcomes
Just as research on bias overlaps research on human happiness, the book also discusses how we can be more happy by exposing ourselves to less information. Far from a whimsical speculation, this is backed up by a clever mathematical/psychological argument.
Taleb's writing style will grate with some people (his favourite topic is clearly himself) but others will find it a very personal and engaging voice. It's an intellectual rather than scholarly book (Taleb mentions a great deal of scientific, philosophical and literary influences, but is not very concerned to back up each claim with citations) but this won't be a problem for most readers.
Don't try to teach pigs to sing July 8, 2007
Stephen Parry (Lean Service Transformation Designer London)
13 out of 15 found this review helpful
I enjoyed this book and found myself in philosophical agreement with many of its concepts. While this is written by someone who operates in the Stock Market, it is equally applicable to other forms of corporate life.
Attributing causes to explain events (even when there are no connections) is a basic human instinct driven by the need to feel in control and not at the mercy of the gods or mere chance.
I have seen the same basic instinct demonstrated time after time in the world of management within organisations. What I like about Taleb's book is that he provides me with some good examples I can now quote the next time I see 'fantasy attribution' at play.
But the biggest take away for me is the fact that he is cool about not pushing his ideas or getting upset when people are clearly constructing a delusion. I am reminded of an old proverb attributed to the Chinese that illustrates this.... 'Don't try to teach pigs to sing, why not? Two reasons, 1) Pigs cant sing and 2) It annoys the pig.
So from now on, just like Taleb, I am not going to get upset, I have stopped teaching pigs to sing.
Trader's Bible June 5, 2007
Dejan Corovic (London, UK)
11 out of 13 found this review helpful
Taleb gives in this book a correct framework for what one is facing when undertaking any kind of speculation. This book should be read before any other investigation of markets or learning from the other books on speculation is attempted. In essence it is an self-delusion avoiding manual.
I would agree with a previous review, as this book does get a bit tardy towards the end. Nevermind that, the first 80% is pure gold.
Entertaining and fascinating introduction to fractals October 30, 2007
Bernat Aubia (Barcelona, Catalonia)
3 out of 3 found this review helpful
This is a really easy-to-read and interesting book about how we do not understand probability laws. It can be an easy introduction to the fascinating world of fractals and non-linear mathematics.
In my humble opinion this book out-rates "The Black Swan" by the same author. While reading "fooled by randomness" I laughed, I was amazed and made me explore with admiration the fascinating world discovered by Benoit Mandelbrot. I'm in debt with Nassim Taleb for this.
A brilliant and wise book July 2, 2007
Andrew Barrett (UK)
8 out of 10 found this review helpful
2nd edition (2004), 316 pages (of which 262 pages for the book)
I read the first edition of Taleb's book a couple of years ago and remember thinking it was one of the best books I'd read - one that would definitely make my all time top ten. I found the concept of alternate outcomes and alternate histories (that what did happen was not necessarily what could have happened) an instantly and outstandingly useful way of making more sense of the world. I suspect most of us have some vague or even more than vague, idea of this (particularly those drawn to reading this book) - but it is different when someone shoves it in front of you in such a succinct and brilliant fashion.
I no longer have my copy of the first edition (having loaned it to someone who lost it) so I can't do direct comparisons and don't have my underlinings and scribblings from the original. However, in the preface Taleb talks about some of his changes/additions and says specifically that the second edition is more than a third longer than the original.
He also mentions that one of his friends begged him not to revise the book for the second edition. That reminds me of the situation with Dawkins' Selfish Gene. When he revised the book for the second edition he (and from memory, I think also the publishers) didn't want to damage the flow or impact from the original, so he contented himself with adding material as separate endnote chapters.
I suspect that Taleb might have been better off taking the same approach. I have to be careful, though, as a second reading of an outstandingly original book is never going to have the same impact as the first - and I don't have my original to make specific comparisons. However, I think it likely that some of the power of the original has been lost. (One can easily justify each addition, but eventually the changes may detract from the whole, or, as Garrett Hardin puts it: "one can never do merely one thing.")
That (potential) carping aside, Fooled by Randomness is still an exceptionally wise and useful book. Do yourself a big favour and read it - though it might be worth looking for a copy of the first edition.
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