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Monday, September 20, 2010

Fooled by randomness: The hidden role of chance in life and in the markets

For the intelligent reader, this book is absolutely awesome.

Nicholas Nasseem Taleb is a polyglot writer who delves into many subjects where even intelligent people make the wrong decisions because of misinterpretation of statistics.

But being a securities trader himself, above all, Taleb demonstrates the foolishness of the myriads of stock traders who all boast of having an unfallible system, but in reality just have a misplaced trust in pseudo scientific nonsense.

Taleb describes, with lovely sense of humor, some examples of those Masters of the Universe, who build up a fortune over the years using their infallible trading system, and then lose everything in a matter of a few days, because the system was inaccurate after all.

After having read Fooled by Randomness, I don't think many people would be willing to trust their money to stock traders.

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