Nicholas Naseem Taleb’s book Fooled By Randomness is not an easy book to read. You need to understand a few mathematical concepts, you need to think a bit when you’re reading (now there’s a concept), and yet some of the ideas will fly by and may need further reading. (At least this is how it was for me.) Still, it is an important book to read because of the central idea of the book: that we most of us are fooled by randomness.
Think about this for a moment: chance plays a crucial role in our lives. A referee’s decision can alter a football match; a freak injury to a key player can take one team from contenders to also-rans; we miss stepping on the road by this much and avoid that oncoming bus. Random things happen to us but in our desire to control things, we explain away situations to feel in control. Probably.
Also, most of us have is that we don’t understand probability and the role that probabilities play in our lives. While reading about probability in the book, I wondered why we weren’t taught probability differently so that we’d understand its importance and apply it to our lives. I’ve forgotten almost all of the stuff I learned in my undergrad, which is a shame because probability is pretty darn important.
While Taleb focuses on the role of chance in the markets, there are enough other examples to keep the non-market person interested. Taleb’s writing is incisive, sometimes funny, and he seems to have a disdain for the media’s role in understanding and explaining randomness. His writing tone can offend people (read the Amazon reviews), which is a shame because the book’s ideas are pretty interesting whether you agree with all of them or not.
Still, Fooled by Randomness is a book worth reading for the important concepts it introduces (or re-introduces).