What is Reddit's opinion of Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (Incerto)?

From 3.5 billion Reddit comments

with you. He’s great, and “underachieving” in the tournament is really this:

Fooled by Randomness

edit: also, thanks for McKoy. Most UNC fans don’t realize what a contributor he’s going to be.

Thanks; and you are welcome. I've read (and highly recommend) Taleb's <em>Fooled By Randomness</em>, however, and recognize that a repeated monte carlo simulation of the past 20 years of my life would produce vastly different results. In truth, I have very little idea how it all happened, but I can at least - thus far - confidently recommend the four things I wrote above in the post :)

Helpful and interesting, but I'm still left wondering what I'm supposed to do with the information, you know? I mean, yes, I'm consistently seeing evidence of leptokurtosis (now that I'm looking) as well as skew (which was less surprising to me), but I feel like a monkey that just got its hands on a wrench. Clearly I'm supposed to do something with this, but bashing it against a rock doesn't appear to be doing anything.

I've also been seeing a number of backtests (namely by u/spintwig), showing that selling 30 delta options appears to be profitable overall, which would line up with the leptokurtosis and skew I'm seeing. But other than seeing that both appear to be pointing in the same direction, I feel too dumb to know what else I'm supposed to do, like holding two pieces of a jigsaw puzzle but not knowing what picture I'm putting together. Like maybe it's indicating a more profitable strategy is a 38 delta strategy, or a 25 delta. Or maybe a 38 delta short and a 1 delta long spread (to try and capture the lower volume of intermediate days, but higher volume of large days, that the leptokurtosis is showing). IDK.

So I know someone else has put this together before. I just don't know who.

And I'm in the middle of reading Fooled by Randomness. It's interesting, but I can't say I'm the biggest fan of his writing style. I was planning on finishing this book before deciding if I wanted to read any of his other works.

Please read chapter 10 of FDR by NNT .. https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219 Fooled by Randomness: The Hidden Role of Chance in Life and in the ...

The nonlinear viciousness of life. Moving to Bel Air and acquiring the vices of the rich and famous. Why Microsoft’s Bill Gates may not be the best in his business (but please do not inform him of such a fact). Depriving donkeys of food.

>The reason I posted was mainly to reflect on a very narrow observation that seemed peculiar when I saw two of the accounts that I followed, acquaintances of mine.

You've been fooled by randomness, 2 is not enough for a significant sample size.

I recommend you this book.
https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219

> I will say, for breaking news and stuff, it's a great way to keep up.

This book was life changing for me, even if the author is a bit full of himslef. Anway, one of the observations is that constant news feeds are toxic. Much better to just read the Economist on Saturday or the Sunday edition of the New York Times. The news will have been digested, researched and accurate. And there is nothing you can not about on an a day by day basis anyway.

As long as your not HODLing a ****coin, HODLing is the much safer option. HODL for years, not months. On day trading, there’s a good book that talks more about how successful people tend to be: Fooled By Randomness by Nassim Nicholas Taleb.

There are no patterns, because they'd be exploited right away, if there were any. There is a lot of volatility and randomness, and people's minds LOVE to be fooled by it and see patterns where there aren't any.

Speaking on the subject: https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219

I think you would appreciate Fooled by Randomness by Taleb. He explains why randomness is a bigger factor in success than most people realize, with examples and math and stories from his time as a trader in the market.

No, 200 is favorable variance. By definition. If you’d like to learn about probability and luck (and how luck is a much, much bigger factor in everything than most laymen believe.) Check it out! I think you’ll be shocked by what you learn.

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (Incerto) https://www.amazon.com/dp/0812975219/ref=cm_sw_r_cp_api_i_eH8.DbVSMEZJ8

Further to your quality comment...

> Basically, active management sometimes wins, sometimes loses.

People who flip coins sometimes win multiple times in a row, to hold them up as oracles is to be fooled by randomness.

There are two kinds of people that use these TA (Technical analysis) tools in my experience, those that get lucky and think they know what they are doing and those who lose on the trade/s and then say something like "Oh, but if I had used a 10 period moving average instead it would have worked" and keep trying.

Might as well read the entrails of a dead animal, even then you will still get lucky sometimes.

Others will have a different opinion.

Humans are hardwired to be fooled into seeing patterns in randomness - Nicolas Taleb wrote a very good book about it "Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets"

Link: https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219

> I'm working hard and trying to figure out ways to secure my future more effectively

We humans seem to be greedy on the upside, and fail to appreciate the downside risks. And of course it is no fun to be planning for the downside. Anway, I suggest tis book as a start, if you have not already found it.

If you are in the mood for an amazing read on this topic, do try Nassim Taleb's Fooled by Randomness. He has a long career in the market and speaks powerfully about the tendency to believe in our own superpowers over random events. It's impressive that anyone has the realization that you had after making big profits.

The sad thing about reading the butters comments is that they fall into all of the same traps as market traders have for years, but they don't have the generations of people that came before them to warn them about it.

>So would you say that we should ALWAYS check your overconfidence?

One should not use a declarative like "always" and "every" since situations will be different from time to time you can't state a universal to them.

One has to look at what is magic being used for. Is it a model of reality? In this instance would we benefit more from a more accurate model.

>ambition, morale, resolve, persistence or the credibility of bluffing

All these things can be increased with out magic. Knowing the numbers and social norms and psychological drives all can do this more accurately and with better results.

>exaggerated confidence actually increases the probability of success

But does it really? Does it increase the probability of success empirically or are we just "Fooled by Randomness"?

a mérnökök azt mondják erre: egy mérés nem mérés javaslom ezt a könyvet, tinderhez kifejezetten hasznos : https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219

libgenen fent van.

I could give you something to read which I think can be helpful to you based on my impression reading your post

Here you go

Best of luck. I hope that it works for you.

Another commenter suggested this book. It was life changing for me.

This man trying to find reasons in the market.

https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219

Random capitalon, tbszre.

https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219

Ezt olvassátok el, kurva jól leírja a lényeget

Yes , we are all Fooled By Randomness.

try Fooled by Randomness

I have a book for everyone to read!

"clearly not random"

&#x200B;

https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219

https://en.wikipedia.org/wiki/Robert_Lucas_Jr.

further reading: https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219/ref=pd_sim_14_2/133-0444399-0427912?_encoding=UTF8&amp;pd_rd_i=0812975219&amp;pd_rd_r=20G8KZ7HRQTB9EV8KRMF&amp;pd_rd_w=QI4pT&amp;pd_rd_wg=y8262&amp;psc=1&amp;refRID=20G8...

further further reading: the actual explanation of "black swan" that is starting to show up in crypto but totally incorrectly, and more importantly is the type of event that destroys TA https://www.amazon.com/Black-Swan-Improbable-Robustness-Fragility/dp/081297381X

Random Walk down Wall Street, I think this is a working PDF. site.iugaza.edu.ps/wdaya/files/2013/03/A-Random-Walk-Down-Wall-Street.pdf He presents one of many solutions to dealing w/ market randomness and how to invest, so you don't have to buy his solution. But the applicable part to TA is he's got several chapters reviewing TA specifically, and it's pretty damning.

p 92: https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219

Life can be strange

I found a book which might help explain some of your findings.

http://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219

Results-based thinking = no bueno

>I'm not sure how they can be "designed" they are 30 opinions of 30 people who follow the 30 teams of the NBA. Unless you believe their judgement is altered by following /r/NBA itself.

Because there are specific instructions for rankers to focus on the recent past instead of just judging current form.

>Teams can change a lot over 2 weeks. It sounds like you are predicting who will be the best at the end of the season rather than actually judging current form.

No, you just have a poor understanding of how to determine current form and are more caught up in the recent past (aka small sample sizes) than you should be, like most of /r/nba. How surprised were you when GSW quickly recovered from their poor start?

Here is an easy to read book that might help you become more informed on the topic: https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219

If you want an actual non-prax answer, Picketty's C21 is where to go. If you want to be spared 700 pages of pain, here is a toy model to explain it:

We can simplify this and say that social mobility depends on one's "rank" in an ordered list of all individuals in a given society. Of course, social rank doesn't just depend on wealth (there are other measures of influence) but wealth is a decent proxy to start.

How much income does one make in his own lifetime? That depends really on what you do to earn wealth. If you work for a wage, then you won't have much income variance, and you can expect to make anywhere between half and ~3.5x the US median income (~55k/household). If you make income from capital revenue or entrepreneurship (investing, startup) then your revenue is a function of your investment decision and your luck.

Sidebar: Luck is by far and away the bigger factor here, without question. If you need to conceive this, think about the biggest startup successes in the last few years and think where success in picture messaging or social networking apps' successes are created (the answer is luck, because of network effects). There is varying amounts of variance in investment or entrepreneurship decisions (of course a bond is going to be lower variance than a tech startup), but luck by far is the bigger factor nonetheless in any of these. Recommendations if you need additional convincing 1 2 3.

Now Picketty's whole point about r>g is that if capital revenue is greater than economic growth (which should roughly index wages as per gdp/pop) then there will be social immobility, because returns to capital will far outpace wages (and you have the conundrum of acquiring capital in the first place if you aren't born with some eg. by inheritance).

But even if r~g you would get significant immobility at the upper echelons, because getting to that place requires a significant amount of luck. You can see this in income distribution graphs which follow roughly exponential distributions. So if you let people inherit hundreds of millions or billions, then you have created an impenetrable, self sustaining, static class at the top of your income ranking for all intents and purposes, because getting to this class from below is only attainable by effectively winning the lottery regardless of your skill.

Having to win the lottery to move up is not what we would consider "social mobility". Note that I'm not making policy proposals here, just stating that if you let people inherit wealth you're going to create social immobility, and increasingly so as you move up the ordered list. Make of that what you will.

Yeah, he's wrong.

There is no way to get the prices of goods except to sell them.

And there is no way to predict the future of markets with prices, either.

What a free market does is make bankrupt over time those people who aren't selling things that other people want. No one has the slightest idea what's going on, prices tell you absolutely nothing, if they did then no one would make any mistakes and we could predict the future.

It just looks like prices give accurate information, which gets people out of bed in the morning trying to earn a crust. But markets are essentially random, yo.

In a market based system, unless steps are taken to avoid it, a handful of people will wind up with all the rewards, and they will get them based on what amounts to raw luck. 80/20 rule, mathew effect etc Nassim Taleb has some excellent writing on why in the markets luck is mistaken for skill, fwiw.

http://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219

Fooled by randomness by Nassim Nicholas Taleb?

"These assholes" is plural. It's referring in general to assholes who tout books and are indirectly mis-leading others. Not you in particular; I would've replied to your comment if that were the case.

Obviously, I haven't read Your Book Recommendation and don't intend to. I made it fairly clear that I disagree with reading books as an effective form of acquiring practical skills. They are [typically] a novelty form of entertainment. If someone has something valuable to say it can be published on a web page, with the help of a 13-yr-old if they lack the ability. If it's truly valuable it will trend in search engines, be linked across the web, and will bring the author a sufficient reward.

> It is not about investing strategies or stock picking tips.

The author is a self-described trader and the book's subtitle ends with "in the markets". Regardless, my point stands. Judge the author before allowing his propaganda into your mind. Yes, I was unnecessarily 'snarky' about it.

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets (Incerto) https://www.amazon.com/dp/0812975219/ref=cm_sw_r_cp_api_i_qdkUCbXF3AG2F

I agree

but this is not proof that the increase in wildfires in Canada are caused by global warming. Your reductionist way of thinking isn't even close to science.

https://www.amazon.ca/Fooled-Randomness-Hidden-Chance-Markets/dp/0812975219

Please think on this book.