This article is an excerpt from the Shortform book guide to "Fooled By Randomness" by Nassim Nicholas Taleb. Shortform has the world's best summaries and analyses of books you should be reading.
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Are you looking for Fooled by Randomness quotes? What are some of the most noteworthy passages worth revisiting?
In Fooled by Randomness, former options trader Nassim Nicholas Taleb examines the outsized role luck plays in success, why people don’t generally understand luck, and how we can accommodate randomness in our lives once we’re aware of it. While Taleb primarily focuses on examples from the world of investing, his principles demonstrate how we’re fooled by randomness in many aspects of our lives.
Below is a selection of Fooled by Randomness quotes with explanations.
Fooled by Randomness: Quotes and Passages
Usually, when we see someone fabulously successful, we attribute her success to skill. But skill will generally only earn a person moderate success.
In Fooled by Randomness, bestselling author and former options trader Nassim Taleb argues that wild success, the kind that comes with outsized wealth and lasting fame, is usually due to luck: a fortunate rare event plus a lack of negative rare events.
The following Fooled by Randomness quotes highlight some of his key ideas.
“No matter how sophisticated our choices, how good we are at dominating the odds, randomness will have the last word.”
According to Nassim Taleb, randomness is a hugely underestimated factor when it comes to decision-making, especially in fields that are greatly affected by randomness (e.g. trading, economics, and politics). In Fooled by Randomness, he urges us to keep in mind that no matter how much we plan, randomness will always be ready to strike. Bear this in mind and react with dignity to the rare events that inevitably hit you:
- Greet misfortune with stoicism: a combination of wisdom and courage.
- Face the future with an optimistic yet accepting attitude.
- Don’t act like a victim. Don’t show self-pity.
- Be courteous to those below you; be forgiving of those who contributed to your misfortune.
- Remember that the only thing luck does not control is your attitude.
“Reality is far more vicious than Russian roulette. First, it delivers the fatal bullet rather infrequently, like a revolver that would have hundreds, even thousands of chambers instead of six. After a few dozen tries, one forgets about the existence of a bullet, under a numbing false sense of security.”
Here, Taleb is discussing rare events. Rare events happen infrequently enough that we sometimes are lulled into believing they’re rarer than they actually are, and that’s where their insidiousness is. People underestimate their likelihood which makes their impact all the more shocking and often traumatic.
“Probability is not a mere computation of odds on the dice or more complicated variants; it is the acceptance of the lack of certainty in our knowledge and the development of methods for dealing with our ignorance.”
“Mild success can be explainable by skills and labor. Wild success is attributable to variance.”
When we see someone who’s had incredible success, we often credit that success to a combination of skill, hard work, intelligence, and perhaps some other mysterious traits that create millionaires. However, skill and hard work will generally only earn a person moderate success. Wild success, the kind that comes with millions of dollars and lasting fame, is usually due to luck: a positive rare event plus a lack of negative rare events.
“We favor the visible, the embedded, the personal, the narrated, and the tangible; we scorn the abstract.”
Because for most of human history people faced tangible threats rather than theoretical probabilities, our brains evolved to better understand concrete ideas rather than abstract ones, and consequently, we have trouble assessing the risks of abstract circumstances. Studies have shown that when presented with two sets of risks, people will be more concerned about the one that describes specific threats even if the more general threats would also include those specific threats.
For example, travelers are more likely to insure against a death from a terrorist threat on their trip than death from any reason (including, but not specifying, terrorism). In another example, a study found that people predicted an earthquake in California was more likely than an earthquake in North America (again, including but not specifying California).
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Here's what you'll find in our full Fooled By Randomness summary :
- The outsized role luck plays in success
- How we’re fooled by randomness in many aspects of our lives
- How we can accommodate randomness in our lives once we’re aware of it