While Taleb does not fully dive into this issue until later in the book, the primary conjecture of the piece is that human beings are psychologically prone to misinterpret random events. We need to explain things, whether it be in the social sciences, art and literature, or the natural sciences, so we find ways to explain them. Considering the infinite quantities of data at our disposal, no statistician denies that extremely powerful correlations will occur simply out of chance. Certain aspects of an author's life will be almost identical to passages in his or her novels, certains stocks will share perfect correlations, and we are creatures in need of explanation, and whole industries have been created to mine the data and tell us why things occur.

Prior to this book, Taleb had already written 'Dynamic Hedging,' considered by many, including myself, to be one of the best books ever written on exotic and vanilla options. That book is not for anyone who has not spent years studying (or preferably practicing) options, but in 'Fooled by Randomness' he illustrates his ideas in terms that anyone could understand. In 'Dynamic Hedging' he provides more insights into his trading strategies than he would have done had he been solely profit motivated, and likewise, as the boss of a fund that profits from other people's misconceptions of probability, he cannot have any reason to try to increase people's awareness of how the world really works other than a genuine desire to play the role of the teacher. Many have attacked the book as arrogant, but it must be remembered that anyone who goes against the common ways of thinking is essentially suggesting that he or she understands things better than do most people and therefore cannot help but come off as arrogant. Several times in the book Taleb specifically states that he falls victim to the tendencies that he condemns, and that the main difference that he sees between himself and others is that he is at least aware of it.

Considering the fact that Taleb blatantly argues that many who consider themselves the rulers of the universe were in fact a group of lucky fools, it is inevitable that many will come away from it with a sense of anger and a refusal to believe it. I am therefore almost surprised that the book has not drawn harsher reviews than it has, for Taleb was certainly not seeking to make friends through the publication of it. I suspect that those who rate the book as poor fall into two general categories: those who were troubled by the thought that a considerable portion of their success may have resulted from luck, and those who are attached to their current views on the workings of the markets and are hostile to any new views on them. These two categories naturally overlap quite often. An important thing to remember is that even if you work very hard, not only are the outcomes of your projects the result, to varying extents, of chance, but chance also played a role in getting you to the position where you can work hard and actaully see it pay off. Considering the complexity of the world we live in, and the infinite forces that push and pull on our lives, this book is critical to anyone who desires an objective veiw of how things come to be...


What is this guy's problem?   February 5, 2005
 54 out of 73 found this review helpful

This is a painfully bad book. Nassim Nicholas Taleb's observations are completely trivial, lacking any depth and conclusion whatsoever, and it takes you a while to understand that this book is not about randomness and the way the human brain is easily fooled when interpreting information.

This book is about Taleb himself - one huge ego trip and at the end impossible to read. No one can criticize the intellectual message of the book - that humans make bad decisions because they underestimate the fundamental effects of uncertainty. But Taleb misses to discuss the immense amount of research available in this field performed since quite some time by economists, psychologists, and others. In fact, the entire field of behavioral finance is devoted to the broad outlines of this book. It is one thing that there is absolutely nothing new in this book; it does not even provide a synopsis of interesting research or real-live implications or applications. What is more embarrassing even is that Taleb steals some of the best episodes in behavioral finance without feeling the need to reference his sources.

What makes Taleb's book so unbearable is that he is so full of himself for knowing Greek mythology and all the philosophers while at the same time knowing about financial engineering. He tells us several times that he is working out. At the end of this book you would like to beat the b'jesus out of this guy for writing a book so irrelevant and arrogant.

If you are looking for intellectual stimulation, you are better off with some of the classics, such as J.A. Paulos' "Beyond Numeracy". Or I suggest you read G.A. Akerloff's "Market for Lemons" article, just a couple of pages long and written in 1970, a little masterpiece that is as powerful as it is simple.


Brilliant   June 8, 2002
 46 out of 55 found this review helpful

This book presents a highly entertaining and informative view of the role of probability in the markets as well as in daily situations, and Taleb will often force you to crack an amused smile and nod with agreement at the same time. The book explores the idea that human beings are not wired to think rationally, and how we therefore misinterpret many events in life. I am no less than shocked that the book has received so many harsh reviews; and I ask anyone who considers not purchasing it to consider that the following points no doubt apply to many of the people who gave it any less than 4 stars.
1) If you want a technical work on finance, read Taleb's 'Dynamic Hedging.' In 'Fooled by Randomness' he intentionally writes so that people outside of the fields of finance and math can understand it. These reviews that attack it for diluting certain points are therefore ridiculous and miss the very point of the book.
2) Since this book's thesis states that many people who think they rose to power or wealth actually did so out of pure luck, of course many people are going to react with hostility and will not want you to read it. Any scathing reviews are no doubt therefore people who don't want you to realize the truth about them.
3) The book is not arrogant. I have trouble seeing how so many can describe it as egotistical when one of Taleb's main points is that he knows nothing about how the markets will act, and that the only thing that seperates him from most people is that he realizes this lack of knowledge, and designs his strategies accordingly. My contention is that it is inevitable that anyone who goes against the common theories will be labeled as arrogant, which is why so many view Taleb as so.
4) Taleb is right. September 11th, the Russian collapse, the interent bubble; the markets are ruled by sudden rare events and you ignore them at your own risk.
I therefore implore you to not listen to all this silly reviews that attack it for entirely groundless reasons. Taleb is one of just a few members of the derivatives theory hall of fame; other members include Nobel Prize winners Robert Merton and Myron Scholes, who derived the famous Black-Scholes formula. What he has to say is worth listening to.


BE FOOLED NO MORE - (by charlatans, anyway)   October 31, 2001
 44 out of 59 found this review helpful

I normally dislike business books and approached this one with a slight diffidence. The title, nonetheless, seemed interesting. However, I soon became drawn into it and found its writer so brilliant as to become envious of his obvious ease at weaving excerpts of knoweldge acquired from many fields to produce such entertaining and insightful writing. Apart from investing and finance the book really attempts to answer the question: are great men made by circumstances or are they born ? I doubt this book will become a bestseller; it's simply too original and intellectual to attract the average minds that run business and finance. This book is about philosophy, science, psychology, history and literature as much as it is a useful guide to investment strategies - though I doubt Mr, Taleb would appreciate the last qualification. Those privileged enough to read it will share an amazing secret and advantage.
In short, I loved it.


Fooled by Amazon   August 24, 2003
 33 out of 37 found this review helpful

Sometimes it serves no purpose to look at the rating of the book (4 average stars), it is as misleading as the closing price in terms of understanding future profitability. The book full of hackneyed examples and anecdotes culled (maybe plagiarized) from better pop-science books. Berstein's Against the Gods is more entertaining, J Allen Paulos is more original, and R. Dawkins is far more erudite.
In his book Dr. Taleb makes much of his love of books, and his foreign (non-US) education. Yet Taleb's book was published by some no-name (vanity?) publisher, Texere, which apparently does not have enough money to hire an editor, nor even a simple fact-checker. Perhaps the brilliant Dr. Taleb don't need no friggin' fact-checker? Well...Barnes & Noble is on 18th street, not 21st street. This might seem like a small detail, but Taleb's book uses that mistake as a chapter sub-heading and it is just a simple example of sloppy editing. I will not even start on the lack of style and wit throughout the book.
Of course, I did not expect any heavy math in this book, I have enough of that in my day job (insurance), but I did expect something more than this limp treatment of statistical reasoning in business life. But one should bear in mind that Taleb is simply a (Phoenician) trader who believes he has something interesting to say simply because he has an above-average income. He is fooled by skewness.