Fooled by randomness : the hidden role of chance in life and in the markets / Nassim Nicholas Taleb.

Includes bibliographical references (pages 293-306) and index.

Solon's warning: skewness, asymmetry, induction — If you're so rich, why aren't you so smart? — Nero Tulip — Hit by lightning — Temporary sanity — Modus operandi — No work ethics — There are always secrets — John the high-yield trader — An overpaid hick — The red-hot summer — Serotonin and randomness — You dentist is rich, very rich — A bizarre accounting method — Alternative history — Russian roulette — Possible worlds — An even more vicious roulette — Smooth peer relations — Salvation via aeroflot — Solon visits Regine's nightclub — George Will is no Solon: on counterintuitive truths — Humiliated in debates — A different kind of earthquake — Proverbs galore — Risk managers — Epiphenomena — A mathematical mediation on history — Europlayboy mathematics — The tools — Monte Carlo mathematics — Fun in my attic — Making history — Zorglubs crowding the attic — Denigration of history — The stove is hot — Skills in predicting past history — My Solon — Distilled thinking on your PalmPilot — Breaking news — Shiller redux — Gerontocracy — Philostratus in Monte Carlo: on the difference between noise and information — Randomness, nonsense, and the scientific intellectual — Randomness and the verb — Reverse turing test — The father of all pseudothinkers — Monte Carlo poetry — Survival of the least fit, can evolution be fooled by randomness? — Carlos the emerging-markets wizard — The good years — Averaging down — Lines in the sand — John the high-yield trader — The quant who knew computers and equations — The traits they shared — A review of market fools of randomness constants — Naive evolutionary theories — Can evolution be fooled by randomness? — Skewness and asymmetry — The median is not the message — Bull and bear zoology — An arrogant twenty-nine-year-old son — Rare events — Symmetry and science — Almost everybody is above average — The rare-event fallacy — The mother of all deceptions — Why don't statisticians detect rare events? — A mischievous child replaces the black balls — The problem of induction — From Bacon to Hume — Cygnus Stratus — Nordhoff's — Sir Karl's promoting agent — Location, location — Popper's answer — Open society — Nobody is perfect — Induction and memory — Pascal's wager — Thank you, Solon.

Fooled by Randomness is a standalone book in Nassim Nicholas Taleb’s landmark Incerto series, an investigation of opacity, luck, uncertainty, probability, human error, risk, and decision-making in a world we don’t understand. The other books in the series are The Black Swan, Antifragile, Skin in the Game, and The Bed of Procrustes.

Now in a striking new hardcover edition, Fooled by Randomness is the word-of-mouth sensation that will change the way you think about business and the world. Nassim Nicholas Taleb–veteran trader, renowned risk expert, polymathic scholar, erudite raconteur, and New York Times bestselling author of The Black Swan–has written a modern classic that turns on its head what we believe about luck and skill.

This book is about luck–or more precisely, about how we perceive and deal with luck in life and business. Set against the backdrop of the most conspicuous forum in which luck is mistaken for skill–the world of trading–Fooled by Randomness provides captivating insight into one of the least understood factors in all our lives. Writing in an entertaining narrative style, the author tackles major intellectual issues related to the underestimation of the influence of happenstance on our lives.

The book is populated with an array of characters, some of whom have grasped, in their own way, the significance of chance: the baseball legend Yogi Berra; the philosopher of knowledge Karl Popper; the ancient world’s wisest man, Solon; the modern financier George Soros; and the Greek voyager Odysseus. We also meet the fictional Nero, who seems to understand the role of randomness in his professional life but falls victim to his own superstitious foolishness.

However, the most recognizable character of all remains unnamed–the lucky fool who happens to be in the right place at the right time–he embodies the “survival of the least fit.” Such individuals attract devoted followers who believe in their guru’s insights and methods. But no one can replicate what is obtained by chance.

Are we capable of distinguishing the fortunate charlatan from the genuine visionary? Must we always try to uncover nonexistent messages in random events? It may be impossible to guard ourselves against the vagaries of the goddess Fortuna, but after reading Fooled by Randomness we can be a little better prepared.