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Book: Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets :: Robert Kiyosaki|Books :: Book
Date: Thursday, 28 August, 2008 :: 00:06
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Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets
List Price: USD $16.00
from USD $4.99
Product Group: book
Manufacturer: Random House Trade Paperbacks
Release Date: 2005-08-23
Studio: Random House Trade Paperbacks
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Average Customer Review: 
Summary: An Insightful Rant
Date: 2008-08-24 -
Comment: This book reads a lot like a self-absorbed blogger's rant, but it is a rant that is highly satisfying to read. Almost all of us have a distant relative or friend who is allegedly a "stock market genius". Taleb argues that it is usually hard to know whether that person is truly skilled or just lucky. Those of us who tend toward schadenfreude (enjoyment taken from the misfortune of someone else) can take solace in the fact that this person might just be a dolt who is likely to blow up one day. He argues that most often trading success is either the result of ones arbitrary trading style happening to jibe with market conditions or a product of exposure to volatility in a way that allows for small regular gains followed eventually by a spectacular blowup.
0 of 1 people found the following review helpful:
Summary: An exercise in self-justification
Date: 2008-08-19 - 
Comment: One of the most self-congratulatory, didactic books I've ever read. Taleb is a convinced ideologue whose expertise in stock trading has created the conviction that he sees the invisible hand at work.
He constantly reminds the reader that he is writing, restating and recasting sections with a reference to his earlier statements (never trust a writer that quotes himself) while dismissing whole schools of thought by selectively quoting from philosophers to make them look silly and misguided--if you read any philosopher, they will eventually prove themselves silly and misguided. It happens when they take themselves too seriously, which Taleb certainly does.
Overall, his ode to skepticism is well conceived, but very thin. Unfortunately, it seems to be the only idea he ever tested. He makes the frequent mistake of confusing the success of a rigorous analysis for the justification of a philosophy as a guiding system to thought for others.
Ultimately, philosophy is what Taleb suggests science is, taking the ideas of Karl Popper over the top and placing them on an alter, "science is mere speculation, mere formulation of conjecture." Popper was a solid skeptic, while Taleb is a convinced acolyte.
0 of 1 people found the following review helpful:
Summary: A Must Read
Date: 2008-08-17 -
Comment: 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.
0 of 1 people found the following review helpful:
Summary: Use Your Luck To Your Advantage
Date: 2008-07-13 - 
Comment: 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.
2 of 4 people found the following review helpful:
Summary: I'm still a fool after reading this book
Date: 2008-06-15 - 
Comment: PROS:
* The book argues an important message (that we underestimate the role of luck in our results/outcome).
* A few interesting anecdotes.
CONS:
* Although the author is self-deprecating at times, it smells more of false modesty rather than geniune humility (which he argues everyone should have). Most of the time (as other reviewers have noted) his arrogance comes out loud and clear, and that's annoying.
* Disjointed style of writing. He rambles, jumps around, and writes in awkward sentences. The writing doesn't flow easily.
* Disorganized. He proclaims that he doesn't like to use headers that tell the reader much about what is coming up. For non-fiction books, I prefer clarity, rather than cuteness.
CONCLUSION: There are brief moments of brilliance and lucidness, brief moments when you think the book is really going to be worth reading, and then it quickly vanishes. Unfortunately, it's also a hard book to skim. I don't recommend it.
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