Lucky fool to get rich

Author: Nassim Nicholas Taleb
Publisher:
Publish Date: 2007-01-01
Features: When still a novice trader in the stock market, author Taleb successfully survived a stock market crash, spending six months studying the storm. He believed his escape was not due to superior skills but purely due to luck—the role of luck in financial markets is significant. However, people often underestimate the impact of randomness. They can’t help but seek explanations for things, which leads to various superstitions. This is why he wrote this book about luck—randomness. Taleb points out: Genetically, we are still very close to primitive tribes. The formation of our beliefs is filled with superstition—even today (perhaps it must be said, especially today). One day, a person in a primitive tribe rubbed their nose, and soon after, it started raining. Thus, they painstakingly developed a method of rubbing their noses to pray for rain. Similarly, we attribute economic prosperity to the Federal Reserve lowering interest rates or credit a company’s success to a new CEO’s arrival. We frequently link unrelated events, leading us to make mistakes in critical life decisions and miss opportunities. Randomness is everywhere in life. Even professional mathematicians, skilled in probability calculations, are often fooled by randomness. Taleb concludes: While we cannot avoid randomness, we can learn to accept it. This is also a practical book. The randomness in the stock market is particularly typical—major fluctuations can occur in an instant. ByTaleb’s operational methods (which many traders are already doing), you can effectively avoid risks and make significant profits when a black swan appears. It is absolutely reasonable to say that every stock trader should have a copy of this book.