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19 of 28 people found the following review helpful
on 13 May 2009
I have read his other book "The Black Swan" which was actually interesting. Although I should have realised that his writing style is a little annoying and self congratulatory, this book is just appalling. No serious derivatives trader or risk manager should go near this book. Not only could his "deep insights" be summarised in a few short paragraphs- "more money is made and lost on short unexpected events, so make sure that you don't get caught." and "all you dumb people are doing it wrong, only I'm a genius ("even though George Soros may have made a few good investments and had a few insights although most of the time he's an idiot too...")". I treasure all of my books; this is the first one which after reading from cover to cover, I tossed into the recycling bin so that no unsuspecting person will be unfortunate enough to find it in a charity shop. Seriously, do not buy this book. It will not give you any insights how to forecast these events either and will be as annoying as stubbing your toe, which coincidentally is free.
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15 of 22 people found the following review helpful
on 21 December 2008
This book is very badly written. The author's arrogance comes across in the preface when he claims he dismissed his editors suggestions to make his style 'better'.
There are some interesting ideas here but they are not worth the effort.
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on 26 April 2014
A good read. Taleb at his best (when he still had enough to say without the need to fake it).
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20 of 30 people found the following review helpful
on 28 July 2009
This review covers both "The Black Swan" (TBS) and it's predecessor work "Fooled by Randomness" (FBR).

An old joke speaks of a book entitled "How to Be Taller" published in two volumes, one for each foot. IMO the only way that TBS and FBR will enlighten people is by allowing them to see farther if they stand on them.

If you are going to write books about randomness and rare events, then it helps to know what you are talking about. Unfortunately Taleb appears not to have taken so rudimentary a precaution. Random processes have inherent non-determinism. Non-linear processes do not but they do exhibit chaotic behaviour that is mistakenly regarded as random.

Taleb fails to make an essential distinction between chaotic and random systems. (See for example page 142 of TBS where he states, "... There is no effective difference between my guessing a variable that is not random but for which my information is partial or deficient ... and predicting a random one ...") This is true *only* if the guessing itself is random. Otherwise one may readily design experiments that can distinguish between non-linear and truly random systems. Needless to say, the inferences that he makes from his mistaken premise are flamboyantly unsound.

In his examples what Taleb calls random behaviour is often the behaviour of deterministic but non-linear systems. Such systems have the property that small changes in initial conditions may produce large differences in trajectories through the phase space. This is true even when the changes are less than the error inherent in measuring the relevant quantities. Such a system can take markedly *different trajectories from distinct initial states that are indistinguishable by measurement*. Hence there is often negligible correlation between measured initial states and observed trajectory - but such lack of correlation *does not* imply that the underlying process is random.

Statistical methods are fine for truly random processes but non-linear processes do not generally satisfy the conditions under which statistical methods can be validly applied. The quantitative financial analysts that Taleb describes as being "fooled by randomness" are in fact merely incompetent users of inappropriate mathematical modelling techniques.

On the evidence of his writing, and despite his oft-cited "voracious reading", I regard Taleb as mathematically illiterate. the criticism that he makes of others apply just as well, IMO, to himself.
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1 of 2 people found the following review helpful
on 16 October 2011
I love Mathematics - studied it at University, have taught it in school, and now tutor in the subject - and probability is one of my favourite topics within the subject, so when I came across this book it was an easy purchase. But dear me, it's awfully dull. The interesting bits could probably have been boiled down into a fifty page pamphlet. Far too much filler. Often felt as though the author really wanted to write a memoir or autobiography because so much of the book was 'me,me,me'. Pretty disappointing. Can't help feeling there are much better books out there on this topic.
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on 13 July 2015
Life changing book. It should be considered at intellectual collection.
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3 of 5 people found the following review helpful
on 30 October 2007
This is a really easy-to-read and interesting book about how we do not understand probability laws. It can be an easy introduction to the fascinating world of fractals and non-linear mathematics.
In my humble opinion this book out-rates "The Black Swan" by the same author. While reading "fooled by randomness" I laughed, I was amazed and made me explore with admiration the fascinating world discovered by Benoit Mandelbrot. I'm in debt with Nassim Taleb for this.
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on 21 June 2015
Very complicated. Jumps about too much. Hard to follow.
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2 of 4 people found the following review helpful
on 29 November 2008
I would suggest that this book is NOT for someone who has a clear view of where they are going in life, and how they will get there. For in both the large and small events in life, there are unpredictable events. Nassim Taleb talks about how we handle those events, and more importantly, how we can use them in our favour. If you are one I recommend not to start the book, the reading may change your outlook. Permanently.

Taleb is a market trader, with experience of having survived several severe financial storms - `difficult trading conditions'. The book is peopled with real and composite characters from his trading life. Most are no longer working in the market, a result of having `blown up'. The essence of the volume is in the title, describing situations where an apparent underlying order was merely randomness with a semblance of tidiness.

The book ties several seemingly disparate subjects together; market trading (a fairly risky activity in itself), science, history, and philosophy of science. Taleb makes no secret of his own fallibility, reckoning that each of us is regularly fooled into thinking that what are really random actions have a basis in `science'. His standpoint is that he knows he is often hoodwinked, whereas others are not in this knowledgeable position. Sometimes it is using inductive reasoning, with too little information, whereas on other occasions it is faulty reasoning, or the mis-use of probability.

The author frequently cites Karl Popper, and his (when introduced in the 1930's) novel ideas on falsification. Rather interestingly, he gives some instances where Popper (the man) did not live up to Popperian principles. We are all fooled by randomness, and the irrational ways we think. Taleb does not actually use the cliché that the only golden rule is that there is no golden rule, but the sentiments are there.

Examples are frequently tied into the currency or bond market place. Would your current strategy be completely shaken by a `black swan' event, something that has never been seen before? We all develop strategies in life, for small events as well as larger occurrences. In these, each needs to consider what would happen if something that has never been seen before happens.

This volume is highly recommended, as an anti-dote to same-old / same-old thinking. It may not give any answers, but may encourage you to find strategies for yourself. Perhaps you too will become someone who loses a little frequently, but occasionally wins in a spectacular fashion. Compare this to traders who have `blown up'.

Those that do well are those that learn from their mistakes, are fooled by randomness (and know it) and have no personal capital tied up with past decisions (so are not afraid of changing their minds).

Peter Morgan []
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1 of 2 people found the following review helpful
on 7 January 2011
a must for every trader, speculator and MORE SO for the conservative investor. Great philosophy book too. I hope some professor out there will give their students a worthwhile coursebook
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