Name: Fooled by Randomness
Author: Nassim Nicholas Taleb

Synopsis

Nassim Taleb, a former trader and mathematician, shows how we mistake luck for skill, especially in markets. The first book of the series that led to "The Black Swan", about how chance shapes outcomes far more than we admit.

My notes

We mistake luck for skill, especially when the outcome is good
Survivorship bias: we only see the traders who made it, not the thousands who blew up
Alternative histories: judge a decision by what could have happened, not only by what did
Russian roulette: winning 10 million with a 1 in 6 chance of dying is not a good decision, even if you win
The more often you look at results, the more noise and the less signal you see
Rare events are underestimated until they happen
The problem of induction: a thousand white swans don't prove there is no black swan
Falsifying is more useful than confirming (Popper)
Be sceptical of your own theories
Asymmetry: what matters is the size of the gain or loss, not just the probability

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Synopsis

My notes

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