Fooled by Randomness

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Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
Fooled by Randomness Paperback.jpg
AuthorNassim Nicholas Taleb
LanguageEnglish
GenreStatistics, Philosophy, Finance
PublisherRandom House
Publication date
2001
Pages316
ISBN0-8129-7521-9
OCLC60349198
123/.3 22
LC ClassHG4521 .T285 2005
Followed byThe Black Swan
 
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Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
Fooled by Randomness Paperback.jpg
AuthorNassim Nicholas Taleb
LanguageEnglish
GenreStatistics, Philosophy, Finance
PublisherRandom House
Publication date
2001
Pages316
ISBN0-8129-7521-9
OCLC60349198
123/.3 22
LC ClassHG4521 .T285 2005
Followed byThe Black Swan

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets is a book by Nassim Nicholas Taleb that deals with the fallibility of human knowledge.

Reaction[edit]

The book was selected by Fortune as one of the 75 "Smartest Books of All Time."[1] U.S.A Today recounted that many criticisms raised in this book of the financial industry turned out to be justified.[2] Forbes admitted to the book being playful, self-effacing and at times insufferably arrogant, but always thought provoking.[3] The Wall Street Journal (one of the publications that Taleb pokes fun at in his book) called Universa Investments' buys in October 2008 a "Black Swan gain (alluding to the Black Swans mentioned in the book)[4]" The New Yorker (one of the publications which receives more favourable comments in this book) said that the book was to conventional Wall street wisdom what Martin Luther’s ninety-nine theses [sic] were to the Catholic Church.[5]

Thesis[edit]

Taleb sets forth the idea that modern humans are often unaware of the existence of randomness. They tend to explain random outcomes as non-random.

Human beings:

  1. overestimate causality, e.g., they see elephants in the clouds instead of understanding that they are in fact randomly shaped clouds that appear to our eyes as elephants (or something else);
  2. tend to view the world as more explainable than it really is. So they look for explanations even when there are none.

Other misperceptions of randomness that are discussed include:

Editions[edit]

See also[edit]

References[edit]

  1. ^ Useem, Jerry. "The Smartest Books We Know". Fortune. 
  2. ^ Mouton, Andre (19 August 2013). "Does big data have us 'fooled by randomness'?". U.S.A Today. Retrieved 28 August 2013. 
  3. ^ Sizemore, Charles (23 January 2013). "Nassim Taleb's 'Antifragile' Celebrates Randomness In People, Markets". Forbes.com. Retrieved 28 August 2013. 
  4. ^ Patterson, Scott (3 November 2008). "October Pain was Black Swan Gain". Wall Street Journal. Retrieved 28 August 2013. 
  5. ^ "Book review : Fooled by randomness". The New Yorker. Retrieved 28 August 2013. 
  6. ^ fooled by randomness

External links[edit]