Fooled by Randomness Review

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Book review of FOOLED BY RANDOMNESS – Nasim Nicholas Taleb By, Harish V | Mathan Pallikkarakaran | Niketh Vangala | Sahil Dhingra | Votaikari Rohit Group 2 Fooled By Randomness – Book Review Taleb’s principal aim in this book is to tease those who take themselves and the quality of their knowledge too seriously. The main idea is it is more random than we think, rather than it is all random. Taleb draws from his experience as a trader, and emphasizes the importance of chance leading to success and failure, as opposed to general accepted knowledge, talent or skills. Dealing with skepticism and stoicism are the central ideas of the book. In fact he goes on to say that it is bravery to remain skeptical and to accept one’s limitations. He points out that people generally confuse between necessary and causal. This may be caused because some read too much into things. The field of finance is evolving and this book provides a view from a different angle, taking analogies from the financial markets very often. Taleb rarely points out data or figures in defense of his arguments and defends the same by saying that it is a mistake to use statistics without logic, but not vice versa. We underestimate the share of randomness in about everything, due to myriad biases we often tend to attribute our successes to our skills and blame bad luck for our failures. Risk taking is described as random foolishness. People are taught to think simple and that simplification is also dangerous. Thus there are two poles, extreme thinkers and simplifiers, both of whom are dangerous. He describes two purposes: to defend science and attack the scientist if it should astray from its course, implying that it’s not the science which can go wrong but the human error. * Intellectual contempt does not control personal envy – Nero vs. john - Pecking order of Wall Street * $10 million
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