Fooled By Randomness

"Fooled By Randomness"
By Nassim Taleb

The Hidden Role of Chance in Life and in the Markets

Ok, most of the books reviewed on this site are clear, accessible reads with practical advice easy on the digestion. Nassim Taleb does not write like that, and this is certainly not one of those books. This is no disservice to him, rather a disclaimer to you. That said, you are urged on to give this one some attention.

Fooled By Randomness is actually just book one of Taleb’s four-part work breaking down the things of chance in our lives and how our minds deal with it. There are all too many things masquerading about in this world as predictable and controlled by accurate forecasting. Much more than we tend to think though is heavily prone to influence by chance interactions with a massive variety of unanticipated events. If you have any doubts, perhaps you haven’t met 2020?

How is this useful? Consider those hair-splitting decisions you fret over, looking for more rationale, more data, support from colleagues. If you generally arrive at an equivalent set of options, decide quickly and move on. There is far too much unknown that can change either path that can’t possibly be known at the outset. And don’t look back.

When a path takes you somewhere you’d rather not be, what’s the sense in beating yourself up over the decision from long ago? It’s already done and any number of unknown factors could have changed the outcome – for the better on this path, or the worse on the alternative.

The key in these close options is to decisively pick a direction and act quickly. It’s in this rapid action where the real key is found. The second big lesson in this book is insatiable for the entrepreneur. Life is NOT linear and incremental effort has the capacity to produce disproportionately large results. Over time en masse then, disproportionate favor comes to those who keep on with the continuous effort and lots of actions focused on a single goal. This characteristic is better represented by compounding interest than a piggy bank. Repeated, unrelenting effort is the key. With that, results are massively stacked in your favor.

Nassim Taleb is clearly a well-read individual and he cut his occupational teeth in the financial investing world. He remains yet jaded by that industry and his perspective is quite humorous and thought-provoking – unless you’re an investment banker. In that case, maybe choose another book.

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