Book review: Fooled by Randomness

Nassim Taleb’s first book is absolutely scintillating  – I can’t believe it took me so long to read it. I really appreciate Taleb’s ability to cut through the noise – encouraging people to focus on good quality information that either have a statistically significant impact on our lives or those that where we can actually have a noticeable impact on the outcome.

Taleb talks about the “quality of earnings” using the example of $10mn earned from Russian Roulette vs. dentistry, which really resonated with me. I don’t think he is saying that people should “slog” for their earnings but that there are certain incomes that are “low quality”. Cheating, deception, luck and taking advantage of other people’s lack of education might be examples of these. In reality the proverbial “bullets” from Russian Roulette in life are not observable. On the other hand if one is learning and growing through the process of earning this is far more valuable.

Following on from this idea of the journey and experience being more important than the actual outcome, Taleb notes that Homer assessed a hero’s greatness not by the outcome but because of the heroic nature of behaviour.

His comments about the media really resonate with me because this is a subject that I think about a lot [It’s possible that an old post of mine on information commoditisation was strongly influenced by Taleb’s blog posts :)]. “The dividend of the computer did not come in the flooding of self-perpetuating email messages and access to chat rooms.” For me this points towards this modern obsession that broad technology is unequivocally positive without noticing the negative implications of it. I’m not saying that technology isn’t positive – rather just pointing out that there are negatives that must be appreciated. For example being caught up in the constant noise espoused by popular news vendors is not a positive influence.

Taleb is particularly scathing about the media and notes that one of his greatest achievements was to wean himself off TV. I’m equally happy with this life achievement.

“People often confuse complex ideas that cannot be simplified into a media friendly statement as symptomatic of a confused mind.” I witness this phenomenon frequently. Not just in the media. There are so many smart people that demand complex ideas to be summarised into one-liners. This problem is epitomized by the TL;DR catch phrase (too long; didn’t read). If you extend this idea to it’s fullest it suggests that books are useless, which is very problematic. This quote encapsulates the importance of books, history and old ideas, “for an idea to have survived so long across so many cycles is indicative of it’s relative fitness.”

To some Taleb can come across as an arrogant individual, particularly on social media. This doesn’t disturb me for two reasons. 1) I appreciate people who are willing to stand out of the crowd and say something unconventional if they’ve thought deeply about the subject. This doesn’t mean that you have to agree with everything Taleb says. But his writing is logical and thought provoking, which is highly valuable for me. 2) I’ve noticed that Taleb is very willing to concede that he is fallible like the rest of us. Fallibility comes across clearly in the book. He describes himself as “born to be fooled by randomness” as though this is a natural state of being rather than something we should deride ourselves for. Damasio (i think) said we are unable to make decisions without the emotional side of the brain and that “emotions are the lubricants of reason.”

Taleb doesn’t try to fight his emotions and argues that awareness of them is highly powerful relative to average people who are oblivious. One example of how he contends with emotion was great: Taleb tries to avoid looking at bad car drivers to prevent himself from forming an emotional stereotype of them – great advice. In essence he tries to fight the behavioral response to emotion rather than pretend that the emotion won’t repeat itself. “The only article lady fortune has no control over is your behaviour – good luck!”

To end I’ll leave you with my favourite sequence from the book:


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