Fooled by randomness, by Nassim Nicholas Taleb

It’s a cliché to say a book changes how you think about things, or how you see the world, but this one does. Taleb, a Lebanese trader working in the New York financial market, is original, iconoclastic and entertaining. It made me question what I read and hear in the media, and how people report events and achievements. The central idea is that we look for causality and frequently infer it where it does not exist. As a result, people are accorded – or claim – credit for outcomes they did not create – like fund managers who beat the market. They all claim they will, and statistically, someone has to. The key test is, if a specific outcome is predicted and then delivered, they may have had something to do with it. If they point to it after the fact, it’s probably just luck.

One way to use this in real life is to notice when you’re being shown selective data. Think about the “missing data”.  You may find, as I did, that this is nearly all the time. The inspiring story of a leader who truly believed and committed, and got to be great, or a brand we should learn from, that did x and y and became successful? Were they really the only ones who did those things, or just the survivors? Next time you hear a sporting icon celebrated for their dedication and desire to win, ask yourself whether it could really be true that all the others lacked those things. We love to tell ourselves stories to help make sense of the world, but these are often highly misleading, as revealed in Thinking, Fast and Slow. Taleb’s healthy scepticism is a useful antidote.

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