Rating: 
Summary: Bothers People's Egos
Review: Intuitive, logical, and profound. The book is certainly bothersome to people's egos as it dowplays success by the use of simple logical arguments.
Great effect.
Rating: 
Summary: Good medicine sometimes tastes bad
Review: I had to laugh out loud when reading this book, for its dead-on assessments of human misunderstandings of all things statistical. I laughed again when reading some reviewers with hurt feelings, taking it personally. Taleb's book is not a "how-to" manual for traders, rather it contains a few thought-provoking nuggets about the difference between accepted dogma and what real life data tells us. Data (stock market data, income distributions, whatever) comes free of preconceived beliefs; it is ideologically neutral. Traders (and the public at large) often make the mistake of believing simple approximations to the truth because they are easy, not because they fit the facts the best. Taleb is only trying to say: don't read more into the data than is justified. PERHAPS the rich trader down the street got that way because he knew what he was doing, but remember that the distribution of wealth over the set of traders is likely the same as that given by random chance...so it's hard to tell. Think about that the next time you pony up $1000 a month for an "expert" stock-picking subscription service. I noticed that only the reviewers lacking mathematical background doubted Taleb; even in this volume devoid of equations, they still couldn't follow his argument. I guess that's what you get for pursuing an English degree. Good luck in the markets.
Rating: 
Summary: bored by randomness
Review: To steal one of the author's illustrations, if you give a 1000 monkeys a 1000 years on a 1000 typewriters, they're likely to type out a better written book than this by mere chance. The egotistical author (Nassim Taleb) is very long-winded and spends the vast majority of the book boasting of his extensive worldly knowledge and his close personal relationships with highly influential people. When it comes down to the crux of the author's arguments, however, the examples he uses are written in a way that even a third grader could comprehend. That would be great if this were a children's book, but for the audience he is trying to address, the book comes across as nothing more than a bunch of fluff that completely fails to address (at least with any stastical rigor) the very statistical abberations he presumably set out to explain. He makes a few worthwhile points (e.g., highly unlikely events are systematically mispriced by the market) but does not bother to back up any of his assertions with evidence (only anecdotal parables). Moreover, if you have done any reading at all on the subjects of behavioral finance and risk management, you will find the book contains little you haven't already read elsewhere.If you are looking for a light read that weaves philosophy, physics, literature, etc. with investing (Taleb seemed to be trying to do just this), try "Latticework: The New Investing" by Robert Hagstrom; it is far and away a much better use of your time. Likewise, it its a reversion to the mean / efficient market type of reading you're after, "A Random Walk Down Wall Street" by Burton Malkiel is far and away a better choice than the FBR title.
Rating:
Summary: Much Is Interesting but Often Very Painful
Review: This book motivated me to write a review for the first time. In full disclosure I should state that I have been in finance for over 15 years, including the last 13 years in trading. (This included time on the CME in Chicago in the FX Options pits at the same time as the author, although I do not know him personally.) Starting with the positive, I found the subject matter very interesting. Similar to what I could gather about the author, I lean toward a more intuitive analysis of the markets. Therefore I found his style, theories and explanations easy to read, and good at keeping my interest. He often uses an intersting anecdote or method to explain his ideas on probability. It caused me to think about things in a different way, which is a good thing. The problem for me starts when he begins to talk about himself or his life philosophy. Anyone who has been in trading for an extended period of time has seen the trader who takes big risks and makes big profits, only to see him blow-up down the road when his trading style is no longer in vogue. Taleb covers the subject as if he is 'outing' this guy as a fraud (not exactly a revelation). And then proceeds to imply that most trading success can also be explained more by luck than skill. Yet somehow his own personal strategy (buy low-delta options and wait for a big event because these events are mis-priced) is clearly in the realm of skill-based trading. When Taleb delves outside the world of trading it only gets worse. He proceeds to put down anyone who does not spend their afternoons sitting in a Paris cafe discussing the ancient philosophers, which of course he does. In one section he belittles anyone who has an MBA (which I do not), irritatingly generalizing about tens of thousands of people, only to justify it by saying that he also has an MBA, so he knows what he's talking about (although he is different than the other MBAs of course). All in all, the number of times Taleb engages in this type of intellectual and/or lifestyle superiority is so unbelievably high it fatally detracted from my ability to enjoy the book. There seems to be a driving need on the part of the author to build himself up at the expense of others. What his statement about how 'all emerging market traders enjoy fine wine and opera', and how 'his interests are more admirable' has to do with "Randomness" was lost on me. He claims to be uniquely aware of his flaws as a trader, it's too bad he does not have the same awareness when it comes to his flaws as a human. It is a shame as I enjoy the subject matter and his style of mathamatical explanations. If you are someone who is not as bothered by these things as I obviously am, I think the book has many redeeming qualities. But for me, when I read a book I am spending time with the author, and I have to like him at least a little.
Rating: 
Summary: The New Yorker Summary was Better
Review: I read a very well written article about this guy in the New Yorker. He has one really good idea, but had to pad it out to sell it as a book. I read over 1/2 of this book at Barnes and Noble and didn't buy it -- There is something to be said for ghostwriting. The good idea -- very improbable events are inappropriately priced in financial markets -- is very hard to turn into cash. I think a major problem with this generally valid insight is that you have to be able to both collect and to spend the money. That is, counter parties have to still have the ability to pay in cases of financial meltdowns. In terms of non financial catastrophes -- war, biological disaster, nuclear disaster, earthquakes -- it doesn't matter if you have zillions of puts on some stock or other financial instrument. The secret of Warren Buffet is simply his ability to determine the appropriate price for a business or part of a business, and buy low, and sell high. In other words, to do good deals. That was also the major strength of Jack Welch -- he bought better businesses -- his various rules led him away from capital intensive commodity and capital intensive businesses, and toward better ones -- no auto's or steelmills for Jack. Seems like skill to me. Anyway, I would like to turn this insight into some money, but don't really have a clue. I would really rather be lucky in non financial areas of life.
Rating:
Summary: Fooled by Randomness
Review: The author tried to be philosophic, tended to show off his cultural taste and stock in literature and therefore made his expression more complicated than necessary.
Rating:
Summary: An irreverent perspective on trading strategies.
Review: This is a very original book how luck pervades our lives, more specifically our financial one. And, how we misinterpret luck for knowledge or expertise when our investments go up, and blame extremely rare 'Perfect Storm' type circumstances when our investments go down. In reality, most of us don't have much knowledge and expertise (this includes the majority of trading professionals too according to the author). And, sooner or later we run out of luck. The author gives this process an interesting mathematical term: Ergodicity. This means that bad trades eventually catch up with you, even if they seem to generate very profitable outcomes in the short run. In the middle of the book, the author defines the characteristics of bad traders: 1. An overestimation of the accuracy of their beliefs in some measure, either economic, or statistical.
2. A tendency to get married to positions.
3. The tendency to change their story, such as becoming investors "for the long haul" when they are losing money.
4. No precise game plan ahead of time as to what to do in the event of losses.
5. Absence of critical thinking expressed in absence of revision of their stance with "stop losses." Traders do not like to sell when their loosing positions represent an "even better value."
6. Denial. The book is rich in many other insights on investment, trading, and probabilities. If you are interested in such matters, you will enjoy and learn much from this book.
Rating:
Summary: Thoughts on Randomness
Review: One of the most important lessons of Taleb's book is the importance of risk management, the ability to recognize how the market might go against your initial analysis. Poor traders, he notes "get married to positions," are quick "to change their story" and have "no precise game plan [...] as to what to do in the event of losses." In contrast, strong traders possess the ability to revise their opinions "rather rapidly, without the slightest embarrassment." Taleb's own trading style employs the use of "skewed bets," in which he tries to profit from "rare events that do not tend to repeat themselves frequently, but, accordingly, present a large payoff when they occur." Unfortunately, Taleb does not give us enough examples of such trades from his own experience--or even the experience of others--to whet our appetite on this score. Instead, we get a heavy dose of Taleb's defensiveness about how the role of chance makes certain traders less successful than others. Like many financial professionals turned writers, he also tries too hard to convince us of his erudition. Finally, the sheer number of the trading caricatures he employs becomes strident. Taleb's strength, however, lies in his ability to make the discussion of randomness lucid; his discussion on skewness and asymmetry, in particular, is excellent. In this sense, Fooled by Randomness is an interesting complement to books like Burton Makiel's A Random Walk Down Wall Street, which provides more better historical background on some of the manias that Taleb mentions. And in the end, Taleb offers a peace offering to those that he mocks. "I am just like every single character whom I ridiculed in this book."
Rating:
Summary: Some interesting discussion, but plenty of Taleb's large ego
Review: As a professional options trader and familiar with Taleb's "Dynamic Options Hedging", I expected a very professional book with interesting insights into the human and mathematical aspects of probability and randomness. And while the book does provide some of that, the valuable information is embedded in writing that is overly self-centered if not egomaniacal. I'd like to point out that I REALLY wanted to love this book. But I didn't. Taleb writes about interesting ways in which people do not understand randomness but he does it in a way which is unnecessarily insulting and condescending. Even worse, I find him hypocritical. He spends a lot of energy talking about the value of being able to change one's mind, as well as the value of large sample sizes in probability-based decision making. But then he describes how far out of his way he goes to avoid information (which might cause him to change his mind or which would increase his sample size.) Further he implies that anyone who takes in certain information, like almost any form of news broadcast, must be an idiot and lives in a world of self-delusion. Taleb writes like a smart but anti-social and holier-than-thou trader. He writes some very useful stuff about randomness and its misapplication in modern thinking. But then he goes on psychological tangents which are nothing more than trying (and failing) to find a mathematical basis on which to defend his personality foibles (flaws?). He over-generalizes about trading in a style which he does not employ, i.e. selling premium or making bets based on past occurrences. He writes as if his way is the only way that makes sense, and implies that in the long run it is only because of randomness that anyone who does not trade the same way he does could be successful. ("Ergoditic" is definitely the best word in the book....) Taleb gets very close to interesting discussions of a non-mathematical nature as well, such as the level of emotion involved with success or failure, as well as some interesting historical information. But he lessens the effect of the good writing by then telling us how all this fits into how he lives his life, using as many obscure references as possible, in an ongoing attempt to justify (to the reader or to himself?) the lifestyle he has created for himself. For example, he uses the above discussion to explain why he does not like to look at his own trading profit or loss statements. And he writes it in a way that shows he expects us to think he's brilliant or heroic for having such discipline. Very silly stuff.... Taleb describes his hero worship (of a philosopher named Popper) and it becomes clear that at least a partial goal of this book is to get the reader to revere (or emulate) Taleb the way he reveres (and tries to emulate) Popper. Unfortunately, it doesn't work that way. Overall I found the probability discussion interesting, but not worth the tedium of having to listen as if the reader is Taleb's (badly needed) therapist. Luckily for Taleb, he says directly in the book that he will ignore all reviews. I think you should be able to find a less tedious source for the bits of valuable information "Fooled By Randomness" provides without having to suffer the insufferable smugness of the author.
Rating:
Summary: An Irreverent Streak
Review: The author is extremely independent minded which makes him stand out either as very confident or very arrogant but it is not the case. He is just extremely scornful of success but has empathy for failure. He seems to derive some pleasure offending those who made money because they happened to be right there when the phone rang that day and are now boasting of their accomplishments. He also seems to make hordes of people who were not there when the phone rang better about their own skills and accomplishments.
I keep reading a lot about Taleb these days as his ideas are gaining currency (people seem to rush to hear him speak --his speech is in contrast with his work soft and low-key). It is sometimes ironic to see people whom Taleb considers as intellectually his inferiors (like Barton Biggs) promote his work. I can t wait for his next work
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