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Fooled By Randomness - Nassim Taleb


SharperDingaan
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[amazonsearch]Fooled By Randomness[/amazonsearch]

 

Very good ‘heretic’ read for those statistically & market minded.

 

To get the most out of it, expect to re-read each chapter & map out what you are being told - as it is not intuitive. Then expect it to completely changes your view of markets.

 

Snippets from Chapter 2:

 

You will probably not do very well if you ...

- Don’t recognize that history is written by the winners, not the losers. If you’re a despot but invade someone & win, you’re a hero. You’re still a despot - but no one will hold it against you!

- Don’t recognize that the idiot who can present well - comes off as the expert. The alchemy of the CNN talking head!

- Don’t recognize the Risk Management is done to give the impression of Risk Management – not actually do it.

- Don’t recognize that you should insure against the abstract risk, not the vivid one. The vivid risk is already priced in - the abstract is not, & the reason why HW can occasionally make 2B on CDS swaps!

 

SD

 

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  • 5 months later...

I just got around to this book and found it amazing.

 

On the other hand, it was pretty much exactly what I was thinking when I posted my essay on risk (though I'm not sure anyone bothered with that)--apparently was recreating the wheel, though mine perhaps was a bit lumpy in comparison.

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