Neither foolish nor random

If you haven't read Fooled by Randomness, make it a priority. It has to rank as one of my Top 5 non-fiction.

Nassim Nicholas Taleb has an acerbic wit, sharp intellect and sound knowledge. Staying true to the book's argument, I wouldn't ascribe causality between these traits and the book's contents. However, while reading, I often caught myself wondering about the size of brain behind the weight of words.

The fundamental thesis presented in the book is that we consistently underrate and understate the role of luck and randomness in our lives. Our successes are always explained post-facto by a combination of skills, courage or some other precisely defined reason. We do not make provision for the role of randomness. We're more benign (or I'd say ready) in cases of failure where luck (or the lack of it) is often presented as the nemesis. But overall, as a species, we are more geared towards determinism vs. randomness

While this thesis by itself might not warrant a book, what makes for an interesting weekend of reading is the author's style and his short detours into various angles & subtleties on the subject.

I for one, found it highly enlightening. I must admit that probability has been a blind spot for me owing to a fortnight of typhoid I suffered at age 17 when the subject was taught in school (and here again I might be overstating the causality - it might be just random or I was genuinely incapable of understanding 'the likelihood that something is the case or will happen'). After reading Fooled by Randomness however, I can vouch for an increase in my understanding. That, in itself, is reason enough to pick it up.

If probability doesn't interest you, perhaps the fact that Taleb opens the door to Karl Popper and his theory of empirical falsifiability, is sufficient inducement. Don't be alarmed at the big words - what it basically means is that any theory is true only as long as it is not falsified. There are no absolute truths, only lies waiting to be found out. While it makes intuitive sense, seeing how knowledge has progressed through trial and error in the past - what is alarming is that we do not make provision for this 'knowledge impermanence' in our education system.

Taleb also takes you down a winding road of biases induced by our lack of understanding of probability. This makes for one of the most stimulating sections of the book. I remember hearing about conditional probability in school but I can admit understanding it only now.

You might ask - What is the benefit of knowing that randomness plays a larger role in our life than we think? Should it lead to fatalism? skepticism at people's success? general disregard for skills and hard work? Taleb makes a clear distinction that there are areas more subject to randomness than others. And he also offers suggestions on what to do in the face of randomness - most of them applicable to a trader but some such as stoicism and dignity, though 'soft', are applicable to anyone.

In the end, the value of a book is random - it's more about the reader and less about the author. I loved Fooled by Randomness. A weekend of mirth, a week of introspection and the falsification of some long harbored 'truths' made it an absolute treasure for me.

ps: I should thank Shiv for suggesting this book in response to my perennial complaints about typhoid robbing me of probability :-)