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Risk & ruin

Fooled by Randomness

Nassim Nicholas Taleb

You can be right and still be ruined by luck - don't mistake a lucky streak for skill, and respect the rare event that ends the game.

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Chapters

14
  1. Chapter 01If You're So Rich, Why Aren't You So Smart?A big winner might just be lucky, not smart - you can't tell from the winnings alone.Read this chapter →
  2. Chapter 02A Bizarre Accounting MethodScore a choice by all the ways it could have turned out, not just the way it did.Read this chapter →
  3. Chapter 03A Mathematical Meditation on HistoryThe past that actually happened is only one of many that could have - don't over-learn from it.Read this chapter →
  4. Chapter 04Randomness, Nonsense, and the Scientific IntellectualConfident-sounding experts often just narrate randomness; sound is not signal.Read this chapter →
  5. Chapter 05Survival of the Least FitThe one who looks fittest after a lucky streak is often the most fragile, right before he reverts.Read this chapter →
  6. Chapter 06Skewness and AsymmetryWhat matters is not how often you're right, but how much you make when you are.Read this chapter →
  7. Chapter 07The Problem of InductionA thousand good days never prove safety - the turkey feels safest the day before slaughter.Read this chapter →
  8. Chapter 08Too Many Millionaires Next DoorIn a bull market everyone feels like a genius; the losers just aren't in the photo.Read this chapter →
  9. Chapter 09It Is Easier to Buy and Sell Than Fry an EggThe more often you check a price, the more randomness you see and the worse you feel - for no gain.Read this chapter →
  10. Chapter 10Loser Takes AllSmall random head-starts can snowball into runaway, winner-take-all results.Read this chapter →
  11. Chapter 11Randomness and Our Mind: We Are Probability BlindHuman brains judge odds with emotion and shortcuts, not probability - so they misprice risk.Read this chapter →
  12. Chapter 12Gamblers' Ticks and Pigeons in a BoxRandom rewards breed superstition - we invent rituals for outcomes that were pure chance.Read this chapter →
  13. Chapter 13Carneades Comes to Rome: On Probability and SkepticismThe wise hold every belief provisionally and change their minds when evidence changes.Read this chapter →
  14. Chapter 14Bacchus Abandons AntonyYou can't control whether luck ruins you - only how you carry yourself when it does.Read this chapter →

This is my own plain-English understanding of the book’s ideas, in my own words with my own ₹ examples, laid out against the book’s real chapters so you can relate the two. It is not the book and reproduces none of its text - if it helps, please buy the book. Not affiliated with the author or publisher. The author is not SEBI-registered; nothing here is investment advice.