fooled by randomness by nassim nicholas taleb

People tend to see examples of enormous success as representative of the kind of success any person can expect in that industry. Some ways in which we misunderstand the effect of luck on success are explored in the following sections. This misunderstanding, and the tendency to credit success to skill instead of luck, can lead people to make poor decisions. Often, though, people don’t recognize how fundamentally different chance-based professions and skill-driven professions are in how they each produce success. This is more true in industries that rely heavily on chance, such as investing, than it is for professions like carpentry or medicine that are built more on perseverance and skill. Wild success, the kind that comes with many millions of dollars and lasting fame, is most often due to luck: a fortunate rare event plus a lack of negative rare events. Skill and hard work will generally only earn a person moderate success.

When we see someone who’s never had such riches, or who’s had them and lost them, we consider her simply not as capable.īut people don’t typically realize how much of an influence luck has on success or failure. Usually, when we see someone who’s become fabulously successful, we attribute her success to a combination of skill and hard work. (Shortform note: To further explore Taleb’s thoughts on randomness, read our summary of his second book in the series, The Black Swan.) Why Wild Success Is Due to Luck, Not Skill While Taleb primarily focuses on examples from the world of investing, his principles are applicable to any field ruled by unpredictability (such as economics and politics) and demonstrate 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.How and why people don’t generally understand luck.The outsized role luck plays in success.1-Page Summary 1-Page Book Summary of Fooled By Randomnessįooled by Randomness is the first work in a five-book series exploring randomness by bestselling author and former options trader Nassim Nicholas Taleb.

Fooled by randomness by nassim nicholas taleb