WELCOME

Punith C NMBAK 1211

Fooled by randomness

The Hidden Role of Chance in Life and in

the Markets

About the Author

Nassim Nicholas Taleb• An MBA from Wharton and PhD from the

University of Paris.• Currently professor of risk engineering,

New York University.• Visiting Professor of marketing, London

Business School.

About the book

• This book is the word-of-mouth sensation that will change the way you think about business and the world.

• It is all about luck: more precisely, how we perceive luck in our personal and professional experiences.

• This irreverent bestseller has shattered the illusions of people.

• Now it can do the same for you

Outline of the book

Book is divided into three parts:• Solon’s Warning• Monkeys on Typewriters• Wax in My Ears

Solon’s Warning

• Introduces the concept of randomness and rare events

• Explains the understanding of human beings towards randomness

• Explains the impact of these rare events

Monkeys on Typewriters

• Explains the human biasness towards the randomness

• Explains the luck factor and probability blindness of human beings

Wax in My Ears

• How human beings deal with the uncertainties/randomness

Black Swan Event

• Something did not happen till now that does not mean that it will not happen in the future.

“Survivor bias”

Human’s tendency is to be disproportionately impressed by success.

Silent Evidence

We always try to learn from the winners

Process is important

Good Process

Bad Process

Good outcome

Skilled Lucky

Bad Outcome

Unfortunate Fool who deserves that

Taleb’s Distribution

High probability of a small gain, and a

small probability of very large loss

• What we don’t know is more important than what we know

• Our decisions depends on only what we know

External signs of wealth and success is observed without having a glimpse of the source

• People are visually but not auditory intimated

which causes dissonance

Dealing with uncertainties

Our heart tend to leap wildly at the unexpected

while our brain tells us it’s

just random

In short, it’s human nature

Interesting quote

“All millionaires are persistent and hard working people, but that make persistent and hard working millionaires”

THANK YOU

ANY QUESTIONS