Use Your Luck To Your Advantage

books:


	• 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

A Must Read

My husband has been struggling in the market for a good 5 or 6 years. Its really opened his eyes though. Of course its all common senses but when you've lived in denial for so long its a real eye opener. He was able to put himself into many of the positions and has stopped living on the if's and could've or should've been position. There's no more hoping for him he's looking for the signs now.

Great concept but poor writing

Well, what can I say? The concept of "black swamp" function is very original and as a professional investor, I appreciate the author's insight into this critical concept to long term return. However, the whole book is about this concept and I don't learn anything new after finishing the first few chapters. Moreover, the author is a trader rather than a writer which probably explain his less-than-perfect reading style. Readers have to be prepared for his "non-linear" logic and could be very confusing at times.

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Use Your Luck To Your Advantage

Many concepts in "Fooled by Randomness" can be mentally applied to many areas and circumstances of our lives. This book has a lot of variety both past and present that can help us in the future in how we *think* about things, our environment, and more importantly, ourselves. This review will take a different path because there have been so many written about this book already.

Author Nassim Taleb believes that Randomness and luck is more of a factor regarding people's positions and successes than most folks realize. In politics, business, economics, and a other fields and areas.

We often too quickly make the assumption that because of someone's superb and/or superior circumstances that these superior results are exclusively because of his/her smart mind, brilliant decisions, actions, and skills. Surely they must know something we don't? This isn't always the case. Sometimes it is, but not always. More often than we might think, it isn't. I see the author's repeated points that we as humans, underestimate the odds and occurrences of Randomness. But I do think diligence, planning, and acumen are also highly prevalent in many successful things we do, in life. It you're good, you'll do better than someone who isn't, in anything. Common sense is a critical factor, too. Our choices also obviously affect what happens to us, in what we passively receive.

All of us can recall times when we were given credit for something that was in all honestly, more the result of fortuity than our own doing. Do we often openly admit it? :) I do believe, that most of one's achievements is because of hard work, skill, planning, and yes luck. But for some of us, in certain situations, luck is the key reason, and there's nothing wrong with this. Those of us that have been the beneficiaries of luck should enjoy it, use it to our advantage, and perhaps most importantly, realize that we've received it.

Within the first couple of pages a detailed description lures the reader: the quick-topping Ferrari, screeching to a halt. Underlings immediately jump, scramble, and run to park the car as its owner vacates and bolts to the Trading Floor. Being a former trader, there attention paid to the trading world in FBR (Fooled by Randomness).

One of the many real-life examples and anecdotes Nassim Taleb noted was the topsy-turvy rise and crash of individuals in the world of Bond Trading: A Bond Trader named "Nemo" was envious of his 'more successful' Chicago neighbor "John the high-Yield trader," who lived right across the street. Nemo had a 14 year track record of solid returns based on careful assessments of risk. Nemo was a long-term survivor of the Bond World and had a solid personal financial base he'd built up for him and his family. Across the street, John was boorish, loud, show-offy. He loved to flaunt his toys. His wife was arrogant, and pseudo-high society. John's luck - his stint with randomness eventually ended, and he crashed. Karma....

Over the years as we get older we observe our circumstances, our environment, our peers, and our peers' circumstances in relation to *ourselves.* In the chapter, "If you're so rich why aren't you so smart?" we see the randomness of the social pecking order.

The world has many one hit wonders in politics, business, music, film, etc. And when the Random opportunity or luck of the one-hit wonder appears, people should take advantage of it. (If, they can recognize it.) Because if it's luck or randomness, it won't last forever.

Only a few times (not often) throughout this book, I had to re-read or re-scan a sentence or group of sentences to get the point Taleb was making. But the writing is good enough, to the point, and succinct. Readers should note the author is not a native English speaker and being a Mathematician, the author is likely left-brained. So readers, go easy. I do believe however, this book is decently written.

Taleb lists some of the common traits listed of people who are the beneficiaries of Randomness but don't realize it. Instead, they think their situation is the result of mostly themselves, their decision-making, and actions.

The Confusion Index:

The Confusion Index has several terms for people who assume results are because of "vision," "excellent strategy," and "brilliance." This is often the interpretation of past results. It's pretty easy to interpret past results, isn't it? It's easy to be a Monday Morning Quarterback. This is called "Hindsight Bias." Have you ever heard "It was so obvious" after the fact? Things appear more predictable after the fact. Some concepts below in the index:

Luck vs. Skills
Randomness vs. Determinism
Probability vs. Certainly
Belief, Conjecture vs. Knowledge, Certitude
Theory vs. Reality
Anecdote, Coincidence vs. Causality, Law
Forecast vs. Prophecy

My Favorite Chapter: If you're so smart why aren't you rich?

Some of the many great chapters and sub-chapters:

Gamblers' ticks & pigeons in a Box
You should be dead by now
Placebo Investors
The rare-eve fallacy: the mother of all deceptions
Survivorship Bias (one of my favorite sub-chapters)

Don't be fooled. This is....a great book.

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are you fooled???

i find it fascinating the diverse reviews this book has received, it seems to have a polarizing effect on readers! for me the book was engrossing, but admittedly i am a fan of taleb's writing and philosophy of life. while he is clearly not concerned with journalistic rules he is able to communicate his point. so what if his sentence structure is not perfect. what i appreciate most about his works, fooled by randomness included is that they caused me to think, and rethink my own beliefs and perceptions about life. i felt challenged by the content and relished the opportunity to ponder paragraphs. this is the strength of his writing (in my humble estimation) to cause the reader to think. a worthy read even if you are prone to focus on the impossibly difficult particulars of writing in the english language...

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reviews: 1, page 2, 3, 4, 5, 6, 7, 8, 9, 10, 11

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