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WELCOME
Punith C NMBAK 1211
Fooled by randomness
The Hidden Role of Chance in Life and in
the Markets
About the Author
Nassim Nicholas Taleb• An MBA from Wharton and PhD from the
University of Paris.• Currently professor of risk engineering,
New York University.• Visiting Professor of marketing, London
Business School.
About the book
• This book is the word-of-mouth sensation that will change the way you think about business and the world.
• It is all about luck: more precisely, how we perceive luck in our personal and professional experiences.
• This irreverent bestseller has shattered the illusions of people.
• Now it can do the same for you
Outline of the book
Book is divided into three parts:• Solon’s Warning• Monkeys on Typewriters• Wax in My Ears
Solon’s Warning
• Introduces the concept of randomness and rare events
• Explains the understanding of human beings towards randomness
• Explains the impact of these rare events
Monkeys on Typewriters
• Explains the human biasness towards the randomness
• Explains the luck factor and probability blindness of human beings
Wax in My Ears
• How human beings deal with the uncertainties/randomness
Black Swan Event
• Something did not happen till now that does not mean that it will not happen in the future.
“Survivor bias”
Human’s tendency is to be disproportionately impressed by success.
Silent Evidence
We always try to learn from the winners
Process is important
Good Process
Bad Process
Good outcome
Skilled Lucky
Bad Outcome
Unfortunate Fool who deserves that
Taleb’s Distribution
High probability of a small gain, and a
small probability of very large loss
• What we don’t know is more important than what we know
• Our decisions depends on only what we know
External signs of wealth and success is observed without having a glimpse of the source
• People are visually but not auditory intimated
which causes dissonance
Dealing with uncertainties
Our heart tend to leap wildly at the unexpected
while our brain tells us it’s
just random
In short, it’s human nature
Interesting quote
“All millionaires are persistent and hard working people, but that make persistent and hard working millionaires”
THANK YOU
ANY QUESTIONS