The Pequod Review:
Nassim Nicholas Taleb’s fundamental thesis in Fooled by Randomness is that we frequently mistake luck for skill. Despite his occasionally snobbish tone (which would more fully bloom in later books), Taleb has important insights on the nature of markets, uncertainty, decision-making, and risk:
Reality is far more vicious than Russian roulette. First, it delivers the fatal bullet rather infrequently, like a revolver that would have hundreds, even thousands of chambers instead of six. After a few dozen tries, one forgets about the existence of a bullet, under a numbing false sense of security. Second, unlike a well-defined precise game like Russian roulette, where the risks are visible to anyone capable of multiplying and dividing by six, one does not observe the barrel of reality. One is capable of unwittingly playing Russian roulette - and calling it by some alternative “low risk” game.
Heroes are heroes because they are heroic in behavior, not because they won or lost.
The formation of our beliefs is fraught with superstitions — even today (I might say, especially today). Just as one day some primitive tribesman scratched his nose, saw rain falling, and developed an elaborate method of scratching his nose to bring on the much-needed rain, we link economic prosperity to some rate cut by the Federal Reserve Board, or the success of a company with the appointment of the new president “at the helm.”
In many ways, Fooled by Randomness contains virtually all of Taleb’s original ideas, and his later books would become weak attempts to repurpose (and resell) the same ones made more succinctly here.