Fooled by Randomness

Nassim Nicholas Taleb, a former options trader, sets out to show how much of what looks like talent in markets and in everyday life is chance. People, he argues, routinely take luck for skill, and the mistake leaves investors, traders and executives with a false picture of why they win.

Survivorship bias sits at the centre. Success is visible, so we study the winners, while the many others who attempted the same thing and failed drop out of view. Taleb calls the missing record "silent evidence", and it would alter our judgement if we could see it.

The book also asks why the mind finds patterns in noise and why rare, extreme events count for far more than average outcomes. From there it turns to a practical question: how to live with uncertainty instead of pretending it away.

This is non-fiction on risk and decision-making, published in 2001. Anecdotes from trading, probability and philosophy are told in a personal, often combative voice. It is the first volume of the Incerto series, which continues with The Black Swan, and it suits general readers and finance professionals alike.