It is extremely difficult to view these people, since history does not record them. Fooled By Randomness is another jam-packed gem full of valuable lessons, which will allow you to live a better life, starting today. Chapter 1: If You’re So Rich, Why Aren’t You So Smart?
It was first published in 2001. An absolute must-read! Taleb brandishes some poetry to make the case that we don’t need to apply scientific rigor in all things of life.We don’t really need to be realistic an rational when it comes to religion, feelings and arts, for example, which is a mistake that many do (see: We need to be more rational when it comes to fields where rationality is more important though, which something that few really do systematically.On his first salvo against evolutionary psychology Taleb says that Nassim Taleb says some believe that plant and animals reproduce on a highway to perfection.And the same thought has been applied to the economy as a whole, with the best companies surviving.Negative mutations for example survive, not longer than for a few generations, in spite of being worse.Taleb talks about median estimates and how they often lead us astray.For example, if a patient with a certain illness lives on average for 8 months tells us little.You should multiply the expected value of an event by its likelihood and then add up the total of the expected value results.Induction means that you can never be sure about your final results, no matter how many observations you make.For example, no matter if you see ten white swans or a thousand white swans, you cannot mathematically rule out the existence of a black swan.Taleb introduces the survivorship bias, a bias which he says is chronic in our society.The survivorship bias is the failure to account for those who didn’t survive (maybe while doing the exact same thing the successful ones did).Ironically, the most successful survivor is also the most visible one, skewing our survivorship bias even further.This chapter starts lighter, with Taleb making fun of The Millionaire Next Door peddles the idea one should save hard to become a millionaire, but Taleb says he doesn’t see the point in getting rich if An analysis of bankruptcies would also find a predilection for risk-taking, says Taleb.Taleb explains the property of volatility and randomness.This is simply the effect of volatility and random distributions, Consequently, Taleb says, success presents a higher correlation with the number of players than with their skills.He doesn’t say Warren Buffet is not skilled, but that a large population of investors will necessarily produce someone with Buffet’s results… Just by luck (! Because the losers do not show up.The following summary was written by Frank Voisin, who regularly writes for sold four restaurants and returned to school to complete a combined LLB/MBA.
How does that mental circuit board of yours look?
Marked some short circuits already? The other books in the… ).Nassim Taleb introduces the regression to the mean phenomenon introducing the The hot hand fallacy is the belief that people who have been successful in the past are more likely to be successful in the future.It’s simply a question of large numbers, he says: with many players, it’s almost guaranteed that someone will embark on a long streak of good shots.
Fooled By Randomness: Chapters 7 and 8; Power Up With Hammond; From The Mailbag: Canadian Tire; Fooled By Randomness: Chapter 6; Goldman Sachs' Wonky Oil Predictions; Forbes Writer Responds; Fooled By Randomness: Chapters 4 and 5; Arbitrage For The Retail Investor; Fooled By Randomness: Chapter 3; Conference Call Etiquette; From the Mailbag: Mellanox … Mild success can be explainable by skills and hard work, but wild success is usually attributable to v… The book is the first part of Taleb's multi-volume philosophical essay on uncertainty, titled the Incerto, which also includes The Black Swan (2007–2010), The Bed of Procrustes (2010–2016), Antifragile (2012), and Skin in the Game (2018).
Why? Not super wealthy, though, because super wealthy entails big risks and it’s a huge game of chance.Risk-conscious hard work and discipline lead with high reliability to a comfortable life, he says. These are meant to trigger thought on the concepts which are laid in the book, and make you ponder on how randomness affects your life and the ones surrounding you.
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