In Fooled by Randomness, Nassim Nicholas Taleb (real name, not an anagram) discusses how randomness affects almost every daily event and how most do not make sense of it.
The most prominent people in the book are market traders who ignore the random component of their job. He gives multiple funny examples of peole making millions per year, thinking that they are the bomb, and then losing it all by not recognizing that a large component of their success was based on the fact that the trading system they were using was good, unless something "unlucky" happened.
Good stuff. A very entertaining read. He does not pull punches for the likes of George Will, and other media pundits. One point for the nerdy statistician!
My favorite section is when he compares winning ten million dollars playing Russian roulette versus earning the same through dentistry, explains the importance of "multiple probable outcomes," and relates how our brains are thought to interpret such different risks for the same reward. Neat.
The book is written like a blog or journal, and is entertaining and quite a easy read if you pass over all the philosophical name dropping. he also wrote a book called "The Black Swan" which will definitely be on my future reading list.
What to buy? This does not easily lend to a specific trading scheme, so I will sit this one out. Also, I spent my money buying gifts.
1 comment:
I hope you used this month's investment allotment to buy me something real purdy.
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