Monday, March 21, 2011

Fooled by randomness

It has been quite sometime since I sat down and finished a book properly. I started the innings post marriage with Taleb's "Fooled by randomness"

I am still not sure if i would call this a must read. The book has a lot of interesting ideas and notions which the author explores in detail. The book deals with the role of chance in life and the author time and again stresses as to how we attribute luck to our failures but never to our successes, when all the while, some of the so called successes are just random events.

The book is classified into three parts -

Solon's warning

This section deals with the warning of a philosopher Solon who told the richest man that "the uncertain future is yet to come with all variety of future and him only to whom the divinity has continued happiness until the end we may call happy" This portion deals with details of expected value of a thing and how many small successes can be simply over ridden by a big loss. What i liked the most about this portion was how the author stresses the need to evaluate a decision not based on how successful it was but based on what would have happened had the decision not been taken. This he says is important as hindsight is always 20/20.There are multiple chapters in this portion dealing with skewness,asymmetry and induction.

Monkeys on typewriters

The author begins this portion with the the case of an infinite number of monkeys sitting in front of a typewriter and left to type. Going by the random combination of alphabets, in all probability one of those can actually come up with a version of a classic, but you can never be sure if the random combination of alphabets it uses the next time around would lead to yet another classic. In this portion he talks about survivorship and other biases. One chapter whose name i wont forget easily is "Its easier to buy and sell than fry an egg." :)
Wax in my ears

In the last and final portion of the book the author begins by speaking about the famous hero of Homer's Odysseus who was warned about the beautiful song of the sirens. He gets himself tied to a mast and makes all his soldiers fill their ears with wax so that they are not enticed by the song and move towards a certain death and also, he gets to hear it and they prevent him from leaving. The author speaks about how evolution has somehow given us some wax in our ears because of which we find it easier to do things that have already been done and follow existing standards than to explore the causality in detail.

I liked the book and I would say that one can read it if you are interested in something which is a little offbeat. I have not yet started reading the black swan as I have temporarily taken time off to read "Who will cry when you die". :)

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