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	<title>Churning Madness &#187; probability</title>
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	<description>A weblog of Charles L. Wilcox, Esq.</description>
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		<title>&#8220;Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets&#8221;</title>
		<link>http://web.cynd.net/~willo/fooled-by-randomness-the-hidden-role-of-chance-in-life-and-in-the-markets/</link>
		<comments>http://web.cynd.net/~willo/fooled-by-randomness-the-hidden-role-of-chance-in-life-and-in-the-markets/#comments</comments>
		<pubDate>Wed, 09 Apr 2008 02:35:40 +0000</pubDate>
		<dc:creator>willo</dc:creator>
				<category><![CDATA[Books]]></category>
		<category><![CDATA[education]]></category>
		<category><![CDATA[Fooled By Randomness]]></category>
		<category><![CDATA[logic]]></category>
		<category><![CDATA[markets]]></category>
		<category><![CDATA[mathematics]]></category>
		<category><![CDATA[Nassim Nicholas Taleb]]></category>
		<category><![CDATA[probability]]></category>
		<category><![CDATA[psychology]]></category>
		<category><![CDATA[randomness]]></category>
		<category><![CDATA[skeptic]]></category>
		<category><![CDATA[statistics]]></category>

		<guid isPermaLink="false">http://web.cynd.net/~willo/?p=63</guid>
		<description><![CDATA[I somewhat recently read &#8220;Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets&#8220;, by Nassin Nicholas Taleb.  I heard of the author somewhere awhile ago.  That, combined with my fractals / randomness kick, and recent &#8230; <a href="http://web.cynd.net/~willo/fooled-by-randomness-the-hidden-role-of-chance-in-life-and-in-the-markets/">Continue reading <span class="meta-nav">&#8594;</span></a>]]></description>
			<content:encoded><![CDATA[<p>I somewhat recently read &#8220;<a title="Amazon.com: Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets: Nassim Nicholas Taleb: Books" href="http://www.amazon.com/Fooled-Randomness-Hidden-Chance-Markets/dp/0812975219">Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets</a>&#8220;, by <a title="Nassim Nicholas Taleb - Wikipedia, the free encyclopedia" href="http://en.wikipedia.org/wiki/Nassim_Taleb">Nassin Nicholas Taleb</a>.  I heard of the author somewhere awhile ago.  That, combined with my fractals / randomness kick, and recent news about housing markets and stocks diving, it seemed like an appropriate choice.</p>
<p><span id="more-63"></span></p>
<p>The main tenant of the book is that human psychology causes us to create meaning and find patterns in what well be randomness, noise, unpredictability, or natural complexity.  He uses the markets as his main analogy, but cites a few philosophers and psychologists work.</p>
<p>Additionally, he also points out that the human mind is not very good at scientific / mathematical thinking.  Simple probability is easily misunderstood.  He also addresses the inability of us consider alternative histories or do <a title="Monte Carlo method - Wikipedia, the free encyclopedia" href="http://en.wikipedia.org/wiki/Monte_Carlo_method">Monte-Carlo</a> runs on future possibilities.</p>
<p>Things I found of note were his approach to this subject, which is that of a non-serious, philosophical skeptic.  I find it refreshing.</p>
<p>Reading a bit on Amazon&#8217;s review of this book, I see allot of chiding remarks.  Nassim uses many known financial professionals as examples in his book, and it&#8217;s apparent that some did not take kindly to it.  However, the auther makes his intentions, those of non-serious dialogue and argument from simple logic deduction, clear in the prologue to the book.  Any who didn&#8217;t read that far may well have earned their disappointment.</p>
<p>3 out of 4 possible stars.</p>
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