Fooled by Randomness by Nassim Nicholas Taleb | How to Handle Uncertainty in Markets & Life (TIP609)

Clay reviews Nassim Taleb’s book - Fooled by Randomness.
Nassim Taleb is a Lebanon-born American mathematician and statistician whose work concerns problems of randomness, probability, and uncertainty. He’s very well known for his popular books, including The Black Swan, Antifragile, Skin in the Game, and Fooled by Randomness.
IN THIS EPISODE YOU’LL LEARN:
0:00:00 - Intro
0:02:41 - The role of luck in investing.
0:04:38 - Why we should develop a sense of skepticism and humility.
0:08:27 - Why humans are more prone to make investment decisions based on emotions rather than facts and probabilities.
0:17:19 - Why it’s so important to understand alternative histories.
0:35:48 - What the firehouse effect is.
0:46:34 - Biases that get investors into trouble, such as the survivorship bias and the endowment effect.
0:49:49 - The story of a trader who got married to his positions which ended up being a value trap.
0:55:04 - How Taleb’s investment strategy capitalizes on asymmetric opportunities.
0:53:48 - What chaos theory is.
0:58:35 - Distinguishing a good process from a good outcome.
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📖 BOOKS MENTIONED:
- Fooled by Randomness by Nassim Taleb: amzn.to/3uEuRKP
- Antifragile by Nassim Taleb: amzn.to/3I52nNr
- The Black Swan by Nassim Taleb: amzn.to/4bFobwF
- Skin in the Game by Nassim Taleb: amzn.to/4bLQycw
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