32 quotes
I have organized my career and business in such a way as to... benefit... I am profiting from the rare event, with asymmetric bets.
Fooled by Randomness (2001)
Veteran trader Marty O'Connell calls this the firehouse effect. ...[F]iremen ...who talk to each other for too long come to agree on many things that an outside, impartial observer would find ludicrous...
Fooled by Randomness (2001)
There are hordes of thoughtful journalists... [I]t is just that prominent media journalism is a thoughtless process of providing the noise that captures people's attention and there exists no mechanism for separating the two.
Fooled by Randomness (2001)
Why do [people] confuse probability and expectation, that is, probability [vs.] probability times payoff? Mainly because much... schooling comes from examples in symmetric environments... the... bell curve... is entirely symmetric.
Fooled by Randomness (2001)
I try to make money infrequently, as infrequently as possible simply because I believe that rare events are not fairly valued, and that the rarer the event, the more undervalued it will be in price.
Fooled by Randomness (2001)
I... found a significant advantage in selecting aged traders, using as a selection criterion their cumulative years of experience rather than their absolute success... [O]lder people have been exposed longer to the rare event and can be, convincingly, more resistant to it.
Fooled by Randomness (2001)
Wittgenstein's ruler: "Unless you have confidence in the ruler's reliability, if you use a ruler to measure a table you may also be using the table to measure the ruler." (page 224)
Fooled by Randomness (2001)
[T]he epic poet did not judge heroes by the result... their fate depended on totally external forces... Heroes are heroes because they are heroic in behavior, not because they won or lost.
Fooled by Randomness (2001)
Trading forces someone to think hard; those who merely work hard generally lose their focus and intellectual energy. In addition, they end up drowning in randomness; work ethics draw people to focus on noise rather than the signal.
Fooled by Randomness (2001)
A... vicious effect of... hindsight bias is that those that are good at predicting the past... think of themselves as good at predicting the future... [W]e live in a world where important events are not predictable...
Fooled by Randomness (2001)
Optimism, it is said, is predictive of success. ...It can also be predictive of failure. Optimistic people... take more risks as they are overconfident of the about the odds; those who win show up among the rich and famous, others fail and disappear from the analysis.
Fooled by Randomness (2001)
[B]ecoming more rational, or not feeling the emotions of social slights, is not part of the human race... not with our current biology. There is no solace to be found from reasoning...
Fooled by Randomness (2001)