Fooled-by-Randomness-summary

Fooled by Randomness by Nassim Nicholas Taleb [Summary]

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The Book In Three Or More Sentences:

The title Fooled by Randomness refers to our tendency to mistake luck for skills and to our misguided conviction that access to more information means higher success ration. Nassim Nicholas Taleb shatters the theory that hard work, alone, will guarantee you fame and fortune. According to his views in this book, you need a dose of luck in addition to your expertise to gain prosperity.

The Core Idea:

When we don’t have all the pieces to the puzzle we tend to imagine that the missing ones are going to turn the tides in our favor while in reality, we’re simply fooling ourselves. Or in other words, the author is saying that a lot of things in life happen by chance. The best thing you can do to guarantee a sort of successful future for yourself is to adequately evaluate your skills at any given moment and to continuously upgrade them.

Highlights:

  • Besides skills and hard work, you need a pinch of luck to reach envious success.
  • Don’t confuse skills with luck and luck with skills.
  • Part of being successful is your ability to filter the essence out of the noise.

5 Key Lessons from Fooled by Randomness

Lesson #1: Hard Work Doesn’t Guarantee Success

Mild success can be explainable by skills and labor. Wild success is attributable to variance.” Nassim Nicholas

So you think that hustling and grinding will boost your social media following and sky-rocket your ass up the corporate leader?

I can’t blame you. I’m, too, brainwashed by modern media that promotes the hard-working entrepreneurial lifestyle where the only thing you do is work and hope for riches.

According to these views, if you work hard and long enough, your spot amongst the blue badge holders on social media will be guaranteed.

But the probability of the above to happen only through Hercules-like efforts is slim.

Think about it for a moment. There are plenty of hard-working people around you, but are they widely successful in terms of money and fame? Not all of them.

Just because some inventions are good and successful doesn’t mean that all new things will reach the heights of the tools we all want/use (think iPhone). The same logic applies to the work you do. Just because some writers are loved by society doesn’t mean that all paper rats can see their name on the cover of a magazine.

Don’t assume that hard work is the differencing factor between living in a 5 bedroom house and living on the street. It’s necessary, yes, but it’s not the only thing you need.

So what do you do then?

Take advantage of the discrepancies that are happening occasionally. Or, as the author writes, “I try to benefit from rare events, events that do not tend to repeat themselves frequently.”

Therefore, you need to observe trends and try to capitalize on them but at the same time don’t get too hooked. Otherwise, you’ll become one of those lottery ticket junkies.

Lesson #2: Filter Noise, Focus on Signal

When we’re about to decide on something important, say purchase a car or a house, we start to surround ourselves with all kinds of data. We burry so deep in information, and we constantly add more, because we think that the next batch of input will tip the scale in favor of what we’ll believe is the “perfect” choice.

In reality, though, this sort of information overload is nothing but noise.

“The more data we have, the more likely we are to drown in it,” says Nassim Nicholas Taleb.

Not only the data we collect cause us to burn out, but we also start to see things as we want them to be. We get biased towards the thing we want (dictated by our emotions) not so by its practicality.

That’s why a lot of folks buy luxury goods that are not as useful as cheaper alternatives – Gucci handbags instead of a piece that costs 50 bucks. They are lead by their emotions as they want other people to see them as worthy, as more authentic.

Put simply, you don’t need all the data in the world to make a decision. You simply need to know which part of yourself you want to satisfy: your emotions or your practical self-image. While the former will want to feel internal content and social acceptance, the latter will lean towards tools that are the best value for their money.

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