Named by Fortune
ONE OF THE SMARTEST BOOKS OF ALL TIME
FOOLED
BY
RANDOUNESS
The Hidden Role of Chance
in Life and in the Markets
NASSIM NICHOLAS TALEB
SECOND EDITION, UPDATED BY THE AUTHORAbout the author
N assim Nicholas Taleb is the founder of Empirica Capital LLC, a
crisis-hunting hedge fund operator, and a fellow at the Courant
Institute of Mathematical Sciences of New York University. He has held
a variety of derivative trading positions in New York and London and
worked as an independent floor trader in Chicago. Taleb was inducted
in February 2001 in the Derivatives Strategy Hall of Fame.
Taleb received an MBA from the Wharton School and a Ph.D. from
University Paris-Dauphine. He is the author of Dynamic Hedging:
Managing Vanilla and Exotic Options (Wiley, 1997).
FOOLED
BY
RANDOMNESS
The Hidden Role of Chance
in the Markets and in Life
+
NASSIM NICHOLAS TALEB
TEXERE
New York # LondonCONTENTS
a
Preface and Acknowledgments
Chapter Summaries
Prologue
Mosques in the Clouds
PART I: SoLon’s WARNE
InpucTion
ASYMMETRY,
On
If You're So Rich Why Aren’t You So Smart?
Nero Tulip
Hit by Lightning
Temporary Sanity
Modus Operandi
No Work Ethics
There Are Always Secrets
John the High-Yield Trader
‘An Overpaid Hick
xili
xvii
cir
11
uu
2
14
16
7
7
19