Fooled By Randomness

[Amazon Link]

This is an entertainingly written, occasionally bitchy, book about randomness in business and life. The author is a trader on various exchanges. I notice from his web page that he currently teaches at UMass-Amherst.

I was drawn to check the book out of the library thanks to Tyler Cowan's praise of it on his blog. (UPDATE: Tyler's removed this post because his commenters got abusive. Trust me, he liked it.) It's a quirky, personal exploration, fun to read. I've been exposed to most of the counter-intuitive results of probability theory the author explores, but the application to high finance is fascinating.

I especially enjoyed this from the preface:

My rules while writing this book have been to avoid discussing (a) anything I did not either personally witness on the topic or develop independently, and (b) anything that I have not distilled well enough to be able to write on the subject with the slightest effort. Everything that remotely felt like work was out. I had to purge the text from passages that seemed to come from a visit to the library, including scientific name dropping. I tried to use no quote that does not naturally spring from my memory and does not come from a writer whom I have intimately frequented over the years. (I detest the practice of random use of borrowed wisdom — much on that, later.) Aut taceaut loquere meliora silencio (only when the words outperform silence).

Guilty realization that if I hewed to the same rules in putting stuff in this blog, it would get real thin, real fast. Oh well …

Last Modified 2012-10-26 7:40 AM EDT