Taleb’s argument is that people are often tricked, mainly by the architecture of their own brains, into thinking that things that happen at random are actually happening by design. Adam Smith, the great Scottish economist and philosopher, wrote more than two centuries ago of “the overweening conceit which the greater part of men have of their own abilities [and] their absurd presumption in their own good fortune.”>>>
This book may be about 'investing' but it really seems to be about religious faith. After all, we are all the end result of 'incredibly unlikely randomness': one recalls the old Bloom County cartoon where Bill The Cat sits around in his underwear saying "ooooooooooohh!" as he contemplates the wonderful unlikeliness of his own existence.
Fact is, either we live in a universe where things happen for a REASON or they happen at random. If they happen at random, I'm going to spend the rest of my life in orgies then commit suicide as soon as the ol' body begins to give out.... after all, what's the difference?
Of course, if I do that, and the Universe is really a place where things happen for a REASON, I'm in seeeeerious trouble.
On second thought I guess I'll put off that tour of Plato's Retreat....
While I agree with the premis, I would argue that it is chaos, not entropy.
Good post; good analysis by Mr. Glassman. I think he's right. What he is saying is that it is good to be knowledgeable about stocks, to understand market trends or seeming trends -- don't count on these: Stick to your instincts. Buy stock you believe in. Sometimes you can make a good guess in prediction. But no matter, trust your instincts.
That advice is about the same as throwing your money away in the casinos and slots. It is not "investing" it is hoping for blindman's luck -- and taxing Providence to do so.
Investing in either "Index funds" or "broadly diversified portfolios" means you personally have added no value, no benefit to the rest of us. And you do do encourage the exploiter, the fraud, the schemer, the con man, the cheat and the sly thief -- because dang it all -- they know to go were the easy money is, were the marks and suckers are.
Thought y'all might enjoy this, as it has some bearing on a mutual subject of interest.
This reminds me of one of the funniest quotes I've run across in a long while:
"We've heard that a million monkeys at a million keyboards could produce the Complete Works of Shakespeare; now, thanks to the Internet, we know this is not true."
- Robert Wilensky, University of California
Beware the "rare event".