Shane's book twenty-one: Fooled by Randomness by Nassim Nicholas Taleb

The world is a more random place than we realise. Not only do we frequently ignore the signs of such randomness but we often actively deceive ourselves, seeing faces in clouds and conspiracy theories behind everything. In fact, the way human beings have evolved means that these flaws in our reasoning are perfectly natural. However, we must do our best to correct them if we are to make good decisions. So runs Nassim Nicholas Taleb's argument. He identifies several of the key biases that affect our thinking. The survivorship bias, for example, leads us to focus on the winners and ignore the valuable data we could learn from the losers. To conclude that most millionaires are risk-takers and therefore taking risks is likely to lead one to wealth, is to ignore the vast numbers of risk-takers who end up bankrupt.

Similarly, hindsight bias leads us to justify random events in retrospect. The market collapsed after the bank raised interest rates? Well, clearly the rate rise caused the collapse.

Taleb is an academic but he has also been a successful trader for many years. Fooled By Randomness was originally pitched as a book for investors but the publisher later expanded its publicity push to emphasise the wider themes of the work. The blurb on the book runs: "The hidden role of chance in life and in the markets"

In truth, the book is mostly about the markets and only a little about life but it's fairly easy to see how these ideas can be applied more broadly.

I'm utterly disinterested in investment and trading but it isn't the focus on the markets that holds the book back. What holds it back is the fact that Taleb is a terrible, terrible writer. His inability - illogical word order, rambling and unfocussed paragraphs, a complete disregard for structured argument - is made worse by the gargantuan pomposity that leads him to believe he is actually a brilliantly individual wordsmith.

It didn't have to be this way, as he notes in the introduction:

"Almost all the book editors who read the draft recommended changes at the sentence level (to make my style 'better') and in the structure of the text (in the organization of the chapters); I ignored almost all of them..."

Oh dear.

"...and found out that none of the readers thought them necessary - as a matter of fact, I find that injecting the personality of the author (imperfections included) enlivens the text."

Do you now? Well put me down as one reader who thinks you should have listened to your editors. And may I humbly suggest that you're indulging in a little survivorship bias of your own here? After all, those who made it through the book are were either not put off by the writing or were interested enough to overlook it. Either way, they aren't much of a sample.

Taleb puts his finger on the problem in the rambling and self-indulgent postscript to the book:

"For writing to be agreeable to me, the length of the piece needs to remain unpredictable. If I can see the end of it, or if I am subjected to the shadow of an outline, I give up."

Well, as long as you're enjoying yourself, eh?

Even when Taleb dabbles in humility, he's unable to keep it up for long. A section on how Taleb is "not so intelligent" soon degenerates into a rant against reviewers and Taleb's explanation that he reads only those reviewers that he respects intellectually and disregards the rest.

So, he won't be bothered by me, in any case.

This book could easily by a third shorter. Indeed, it would be if Taleb exhibited any kind of self control or worked to "the shadow of an outline".

By the end, I couldn't wait to get rid of Taleb. There are some fascinating ideas here but you have to be really committed to want to get at them.