Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (Incerto Book 1)

Heroes are heroes because they are heroic in behavior, not because they won or lost. Patrocles does not strike us as a hero because of his accomplishments (he was rapidly killed) but because he preferred to die than see Achilles sulking into inaction.

My greatest risk is to become successful, as it would mean that my business is about to disappear; strange business, ours.

Following the incident, John regarded himself “ruined”; yet his net worth is still close to $1 million, which could be the envy of more than 99.9% of the inhabitants of our planet. Yet there is a difference between a wealth level reached from above and a wealth reached from below. The road from $16 million to $1 million is not as pleasant as the on

As to the second, more serious flaw, I have already discussed the problem of induction. The story focuses on an unusual episode in history; buying its thesis implies accepting that the current returns in asset values are permanent (the sort of belief that prevailed before the great crash that started in 1929).

The difference with his friends of the investing variety is that he did not depend on the bull market, and, accordingly, does not have to worry about a bear market at

The agent would prefer the number of losses to be low and the number of gains to be high, rather than optimizing the total performance.

Unlike many “hard” sciences, history cannot lend itself to experimentation. But somehow, overall, history is potent enough to deliver, on time, in the medium to long run, most of the possible scenarios, and to eventually bury the bad guy.

The reader can see my unusual notion of alternative accounting: $10 million earned through Russian roulette does not have the same value as $10 million earned through the diligent and artful practice of dentistry. They are the same, can buy the same goods, except that one’s dependence on randomness is greater than the other.

work ethics, Nero believes, draw people to focus on noise rather than the signal (the difference we established in Table