Fooled by Randomness Summary

Fooled by Randomness Summary by Nassim Nicholas Taleb

Blog Title: Fooled by Randomness Summary
Name: Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (Incerto)
Author: Nassim Nicholas Taleb
Download The Power of Full Engagement at: Audible
Buy Fooled by Randomness at: Amazon
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Book size: 368 pages


Fooled by Randomness- The Hidden Role of Chance in Life and in the Markets (Incerto)
Fooled by Randomness- The Hidden Role of Chance in Life and in the Markets (Incerto)

Before discussing Fooled by Randomness Summary let’s first discuss the book author Nassim Nicholas Taleb, Nassim is a Lebanese-American Essayist, scholar, statistician, former trader and risk analyst, whose work Focuses on Problems of randomness, probability and uncertainty, The fooled  by randomness deals with the fallibility of human knowledge, This book in one of the 75 smartest books of all time for its work on the way humans perceive randomness,  in this book author has come up with various ways through which human assigns meaning to a series of independent random events. In this book author has come up with 2 basic misconceptions we humans have towards the perception of randomness, first basic of misconception that we people overestimate the cause and effect, because our brains are wired to make connection between events to formulate reactions, and the second misconception is that we people view the world as explainable, but whereas in reality there is no explanation for sequences of independent and random events which makes up the reality.

Fooled by Randomness is for those who are ready to change who are willing to gain knowledge and some investors as even declared that this book should be written in the 90s, In this Book Randomness, is not a theory or a concept, but here author says that randomness is the people’s worlds ability to create unpredictable events, occasions, situations, occurrences and list goes on. Here the author has asked two questions and answering them will determine the outcome of any decisions that you’ve made, and that questions are “Do you want to be happy?” and “Are you superstitious?” usually, superstitious people are the victim of their past.

Taleb is an author of some of the best books, can say he has written several masterpieces such as Antifragile, the black swan, the bed of Procrustes including today’s book summary Fooled by randomness.

So let’s discuss with Fooled by Randomness Summary:

Lesson 1 from Fooled by Randomness Summary:

Life isn’t fair, which makes the rewards of continued efforts excessively big:

Here author says that many systems we move and live works in linear fashion mean in sequential form, usually in one line, with every day of your work you move closer to your promotion, when you go to school you move closer to graduation, with every savings you do, you move closer to your retirement same lifestyle, and so on.

Because of all these events we think that life is linear means sequential but that’s not the actual fact,  for example you all must have heard about Darwin’s theory about survival of fittest, here survival of fittest only means that best-adapted organisms will have higher chances to survive an average but this doesn’t mean that unfit organisms can’t survive at least in the short run, means it doesn’t stop unfit to survive for short run.

Author says the reason life is not linear or can say the reason life is non-linear because life is path dependent means we can’t be sure that we will end with the same result the way we have started, example,  earlier only one office used to use windows desktop, but suddenly half of all offices started using windows and non-windows users become the minority, hence earlier windows users were the minority but later windows non-users became the minority, hence it’s not sure that the way things started will end up the same way, because life is path dependent,  as we can see that one grain of sand can bring down an entire sand castle, one extra day at work or one extra phone call can bring or can give huge rewards,

Hence author wants to say that we people can get disproportionate size of rewards from an ongoing process, it’s not necessary that big things will give big rewards even small thing can give big rewards, but however people fail to see the progress which they can get from the extra miles hence they give up, people fail to see the progress they can get through more hard work and efforts hence they give up before seeing that progress.

Lesson 2 from Fooled by Randomness Summary:

Without our irrational emotions we often couldn’t make decisions at all, we need them:

We need irrationality to make certain decisions, author says that if we make every single of our decisions based on rational reasoning then we may not able to survive or we will cease to exist, author says that not every decisions or choice can be easy, some choice can be indifferent, like there can be some choices which outcome will neither makes us feel better and will not able to make us feel worse, for example just as hypothetical situation, if you want to invest money, by thinking rational like market can go down or can go up, by thinking this way you won’t be able to make proper decision, unless yo being slightly irrational, like if you think only one way yes market will go down only then you will be able to make firm decision.

Hence author here want us to understand that sometimes some decisions choices needs irrationality, always by being rational we can’t be able to make proper choices. Because there can be some situations when its impossible for us to be rational and at such situation irrationality and randomness will help us will help us to clear our mind.

Here author has also said that our emotions can influence us and can make us think irrational, but it is we who needs to use our logic and proper reasons, we people need to understand where irrational reasoning is required and where rational reasoning must be used,

My thoughts:

Author wants us to understand that in some situations we need to be irrational, because sometimes being rational doesn’t work, hence its on us, we must understand where we need to be rational and where we can be irrational, emotions can influence us to be irrational but in such situations we need to use our logic and proper reasoning to make proper decisions.

Lesson 3 from Fooled by Randomness Summary:

You can use stoicism to deal with the bad kind of randomness and enjoy it when it’s harmless:

Here author says that randomness is not all bad it’s harmless too, we people need to use randomness in a better way so that it can improve our lives in better way, there are some fields which can’t work without randomness such as art, poetry, humor, books etc., author says that without randomness there will be no beauty in art there will be no joy, happiness in these things, author says that as some situations randomness is good, author says that we can’t let randomness fooled us, but right kind of randomness is good.

For example, harmless randomness irrational reasoning thinking is good, but bad harmful randomness and irrational thinking is strictly bad,

An irrational poet artist is harmful but an irrational scientist doctor engineers are dangerous.

Hence author says that when harmful kind of randomness hit our doors then we can use stoic attitude or stoicism, we should deal with harmful randomness with elegance, we should never self-pity, we should never blame others or shouldn’t complain and must prepare our self mentally to take all responsibility on our hands, we have control over our behavior, and our behavior is the only thing we have a control.

My thought:

Author says that randomness irrational thinking can be harmful or harmless, and we must understand that harmless randomness and irrational behavior thinking will help us to make our lives better but irrational behavior attitude or randomness which is harmful will only destroy our lives hence we must use stoic attitude for that, and we must understand the difference between good and bad randomness.

Lesson 4 from Fooled by Randomness Summary:

Example of half empty and half full:

In this chapter author has discussed how person can become positive, and how people tempted to approach things, for example, there was a man who was suffering from cancer, when doctor told him that he has 72 percent survival chances, then that person became optimistic and started focusing on that 72 percent and he didn’t dwell for ones for that 28 percent, to understand this chapter and impact of positivity in our lives to buy this book.

This book contains valuable lessons and chapters and also has various examples to understand each chapter in detail do read this book and do buy this book from the given links:

Download The Power of Full Engagement at: Audible
Buy Fooled by Randomness at: Amazon
Buy Fooled by Randomness at: Flipkart

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  1. Excellent blog! Very much good about randomness in our life. But,Sir please tell the meaning of some difficult words like stoicism. Again,a very knowledgeable blog about randomness.!!
    Thank you !

  2. Can you please tell me 10 places where i should be irrational because i didnt understand that point, lile why to be irrational.

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