Fooled By Randomness - Trading-Lab

Leth · #1 12-23-2007, 11:33 PM

Taleb's book on randomness helps us to answer the age old question; What plays a bigger role in the market, luck or hard work? Most traders obviously know the answer; but can they explain why (not that its necessary)?
What I liked best about this book is how the author brings the rarely explainable theory of random walk to light. I also liked his take on how important thinking in terms of odds plays in the trading arena; yet, without the casino type mentality (betting the ranch) that most traders have.
The book isn't completely without its drawbacks however. Taleb's banter can sometimes go off in a different direction from the initial point. This often forces you look back at the beginning chapter to review what he was talking about in the first place. Also, his dialouge is not quite worded in the simplest of terms. Im not saying it can't be easily understood...its just that, since im no Einstein, I could have done without the 4 dollar college words and freudian type phrases.
Bottom line is, you rarely get a chance to read a good perspective on random walk theory; so if you find yourself interested...Taleb's book is worth checking out.

breakout · #2 01-07-2008, 01:57 PM

I read about this guy and how he played strategies which would "slowly bleed" money on a daily basis, only to skyrocket once some worldwide event took place. he's a net buyer, correct? also, I heard he closed his hedge fund Empirica. do you know what happened exactly?

Leth · #3 01-07-2008, 02:40 PM

Blowing Up

April 22 & 29, 2002
DEPARTMENT OF FINANCE

http://www.gladwell.com/pdf/blowingup.pdf

other than this...i dont know much about him personally. i would like to know the answer to this question as well...good post rookie.

breakout · #4 01-08-2008, 11:49 AM

ohhh....thanks for the link, leth.

rookie

Leth · #5 01-11-2008, 06:40 PM

I apologize breakout...don't ask me why i said rookie. It must have been a long day or I might have answered a previous thread/post with his name in it right before this one. I think im losing it...

aiki14 · #6 01-12-2008, 12:51 AM

I may go out and get the book just to find out the conclusion the author came to on the hard work versus luck thesis.
I am a strong believer in the hard work being the more powerful force over time. If nothing else, hard work supports luck. There is the old russian proverb that "luck favors the prepared", I don't recall any proverbs about luck favoring the slacker. There is one about God looking out for children and drunks, but I can't figure out a way to use it in this context.

Luvnrio · #7 01-12-2008, 02:06 AM

Quote:

Originally Posted by Leth

I apologize breakout...don't ask me why i said rookie. It must have been a long day or I might have answered a previous thread/post with his name in it right before this one. I think im losing it...

How can one lose something, he's already lost...?

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#1 12-23-2007, 11:33 PM
Leth Super Moderator Join Date: Oct 2007 Posts: 621	Fooled By Randomness Taleb's book on randomness helps us to answer the age old question; What plays a bigger role in the market, luck or hard work? Most traders obviously know the answer; but can they explain why (not that its necessary)? What I liked best about this book is how the author brings the rarely explainable theory of random walk to light. I also liked his take on how important thinking in terms of odds plays in the trading arena; yet, without the casino type mentality (betting the ranch) that most traders have. The book isn't completely without its drawbacks however. Taleb's banter can sometimes go off in a different direction from the initial point. This often forces you look back at the beginning chapter to review what he was talking about in the first place. Also, his dialouge is not quite worded in the simplest of terms. Im not saying it can't be easily understood...its just that, since im no Einstein, I could have done without the 4 dollar college words and freudian type phrases. Bottom line is, you rarely get a chance to read a good perspective on random walk theory; so if you find yourself interested...Taleb's book is worth checking out. __________________ Nothing is more difficult than the art of maneuvering for advantageous positions. - Sun-Tzu Trade with the trend, Ride winners, Cut losers, Keep bets small, Use Stops - Old School Last edited by Leth : 12-24-2007 at 01:58 AM.

#2 01-07-2008, 01:57 PM
breakout Member Join Date: Jun 2007 Posts: 63	I read about this guy and how he played strategies which would "slowly bleed" money on a daily basis, only to skyrocket once some worldwide event took place. he's a net buyer, correct? also, I heard he closed his hedge fund Empirica. do you know what happened exactly?

#3 01-07-2008, 02:40 PM
Leth Super Moderator Join Date: Oct 2007 Posts: 621	Blowing Up April 22 & 29, 2002 DEPARTMENT OF FINANCE http://www.gladwell.com/pdf/blowingup.pdf other than this...i dont know much about him personally. i would like to know the answer to this question as well...good post rookie. __________________ Nothing is more difficult than the art of maneuvering for advantageous positions. - Sun-Tzu Trade with the trend, Ride winners, Cut losers, Keep bets small, Use Stops - Old School Last edited by Leth : 01-07-2008 at 04:22 PM.

#4 01-08-2008, 11:49 AM
breakout Member Join Date: Jun 2007 Posts: 63	ohhh....thanks for the link, leth. rookie

#5 01-11-2008, 06:40 PM
Leth Super Moderator Join Date: Oct 2007 Posts: 621	I apologize breakout...don't ask me why i said rookie. It must have been a long day or I might have answered a previous thread/post with his name in it right before this one. I think im losing it... __________________ Nothing is more difficult than the art of maneuvering for advantageous positions. - Sun-Tzu Trade with the trend, Ride winners, Cut losers, Keep bets small, Use Stops - Old School

#6 01-12-2008, 12:51 AM
aiki14 Member Join Date: Jan 2008 Location: Philly Burbs, PA Posts: 82	I may go out and get the book just to find out the conclusion the author came to on the hard work versus luck thesis. I am a strong believer in the hard work being the more powerful force over time. If nothing else, hard work supports luck. There is the old russian proverb that "luck favors the prepared", I don't recall any proverbs about luck favoring the slacker. There is one about God looking out for children and drunks, but I can't figure out a way to use it in this context. __________________ I read somewhere that 77 per cent of all the mentally ill live in poverty. Actually, I'm more intrigued by the 23 per cent who are apparently doing quite well for themselves. --Jerry Garcia The idea is to try to give all the information to help others to judge the value of your contribution; not just the information that leads to judgment in one particular direction or another. --Richard P. Feynman