Book

Fooled by Randomness

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Behavioral Science

What this book knows

Human minds systematically misread randomness as skill, pattern, and causation—with ruinous consequences in markets and life.

Sex: Absent
Work: Present
Learning: Primary
Religion: Absent

mind-and-cognitionambition-and-statusself-and-identity

mind-and-cognition

99.9% of their past performance is attributable to chance, and chance alone. Ask a profitable investor to explain his success.
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Kahneman and Tversky uncovered areas where human beings are not endowed with rational probabilistic thinking and optimal behavior under uncertainty.
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People view a sample randomly drawn as highly representative—the consequence is the inductive fallacy: overconfidence in the ability to infer general properties.
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self-and-identity

I unconsciously acted as if I believed in the association between performance and glasses—my native statistical instinct did not benefit from my expertise.
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ambition-and-status

Nero's objective is not to maximize his profits so much as to avoid having this entertaining machine called trading taken away from him.
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They believe the strongest will survive and the weakest will go learn a new craft. Things are not as simple as that.
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Illuminates

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