Review: "Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets," by N
Anaïs Nin once said, “We don't see things as they are, we see them as we are.”
We are prisoners of our own reality. Wait, what kind of reality I'm talking about?
Well, suppose an event A occurs. Then, we question what causes A. But, this is an insignificant question considering how it had happened.
Next, rational mind asks, why the event seemed to be A instead of B or hundred other categories ( X, Y, ... ... ...)? What are the fundamental issues we are considering to put something in a category? Are the fundamental issues falsifiable? If the issues are falsifiable does that mean we are closing our boxes forever to some other blind spot issues?
Does the absence of blind spot represent the ultimate evidence of absent blind spot? Doesn't rational people hate the word "ultimate"? Aren't we all rationalist ( are we really? :D ) skeptic in nature? :D
okay back to the point, we enclosed a system with some parameters. Then we felt confident enough that all the parameters are falsifiable within our system aiming to the event A but what if some other events( noises ) get mixed? Are we really capable to isolate event A from A'? ... Well., we are super genius human, aren't we?
So, suppose, we somehow completely separate A and A'.
Now, obviously (A+A') occurs within an absolute system unless we don't use the word "complete" for separation. But, skeptic rational person doesn't welcome "absolute". Does he ? :)
Now, their favorite weapon reason puts into forwarding another new enclosed system to consider the event (A+A').
Next question, how do we completely separate (A+A') from (A+A')'?
See, the problems with absolute thinking? They create a false dilemma by acting as if there are only two options when there are actually more and more.
Suppose, some supreme super genius human separated the previously discussed system too. Then the same question could be asked for infinite more unspoken systems in the periphery of darker unknown regions. But, humans have limitations, he couldn't deal with this questions at some point. As a result, even a rational person stops to question his falsifiable system for A at some point. He starts to believe in his sweet theory for A just like some rigid head theist who can't think outside of his own antidote (otherwise his brain burns out). They both fights for his drop of happiness to be true ( i.e. Hindsight bias).
Thus, the rational mind transforms into a closed bottle to avoid paradoxes. Finally, he disinherits the skepticism which is the most effective source of change and progress. Pause ... Question and doubt everything.
So, this is the problem of binary thinking to separate everything into either A or A'. It creates paradoxes. It creates hypocrisy in our own character. ... How?
We like to believe we are the rational skeptic scientific person to question things around us but we don't feel comfortable to deal with the same issues inside ourselves. Even if we try to deal with our own system, at some point we're tired enough to find an escape route into a peace producing unknown system.
The above thoughts went through into me while reading negative reviews of "Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets". Most of the people are angry because of Nasim's criticism in expert people's antidote. They feel offended because he uses straight language to doubt and criticize expert people's process of decision making emerging from their comfortable biases in general. Nasim even claims that he isn't out of biases. It's the proof he is human. But, the difference between him and some of the other expert is that they don't want to recognize their own biases.
When I first saw the first episode of Dekalog by Krzysztof Kieślowski, it was an eye-opener for me. It created a new level to think outside my own confident predictable rigid system.
In this book, Nasim shows our continuity to see patterns (where none exists), misunderstanding about the role of randomness and belief that we know more about the future than we do. Life and markets involve a large number of random factors. Their behavior over short time spans may have so little significance. So, extrapolation of it is somewhat a complex job and it's not that simple to express it through some constant reasons.
In my first reading what I understood about this book - a success ( and failure only to bad luck) is not just a product of skills, no amount of observations of the white swan can discount the possibility of a black swan and our will to change mind in the event of new contradictory information are the basic point of discussion.
In fact, I'm not writing a review for this book. Because, I have to re-read this book one more time to write a review from a precise point of view,
Yet, I got pretty emotional at the following passage from the last part-
"It took me a while to figure out that we are not designed for schedules. The realization came when I recognized the difference between writing a paper and writing a book. Books are fun to write, papers are painful. I tend to find the activity of writing greatly entertaining, given that I do it without any external constraint. You write and may interrupt your activity, even in midsentence, the second it stops being attractive. After the success of this book, I was asked to write papers by the editors of a variety of professional and scientific journals. Then they asked me how long the piece should be. What? How long? For the first time in my life, I experienced a loss of pleasure in writing! Then I figured out a personal rule: For writing to be agreeable to me, the length of the piece needs to remain unpredictable. If I see the end of it, or if I am subjected to the shadow of an outline, I give up. I repeat that our ancestors were not subjected to outlines, schedules, and administrative deadlines. Another way to see the beastly aspect of schedules and rigid projections is to think in limit situations. Would you like to know with great precision the date of your death? Would you like to know who committed the crime before the beginning of the movie? Actually, wouldn’t it be better if the length of movies were kept a secret?"
After reading him and working on our own dilemmas, I verified my learning about not to be fully dependent on the numbers or theories, do consider reality before taking any decision but at the same time we should know and learn them as well. :)
