Fooled by Randomness by Nassim Nicholas Taleb

So early this year, I read Predictably Irrational by Dan Ariely, when I mentioned this to one of my teachers, she recommended that I read Fooled by Randomness next, and then The Black Swan.  It took me a long time, but I finally read Fooled by Randomness, and I'll 'tackle' The Black Swan as soon as I can get my hands on a copy.

Fooled by Randomness is written in a very conversational style, and basically makes the case that luck plays a much bigger role in our lives that we expect. We just tend to attribute it to other factors, due to things like survivors bias (but don't worry, you have to work hard if you want to take advantage when luck strikes. So don't stop working just yet).

The book talks about a variety of subjects related to risk and randomness, but the one part that stood out to me came really early in the book - Chapters 1 and 2, in fact. It's the part when Nassim Taleb compares a dentist and someone else (like a lottery winner) and concludes that on average, the dentist is richer. Why? Because the income for dentists don't change much, while only a few people win the lottery. So while the lottery winner may strike it rich (much richer than the dentist, in fact), on average, the average dentist is going to be the richer than the average lottery winner. His/her risk in life is smaller. It's kind of like what one of my teachers said, that if you want stability, you go for a job in the public service (in Japan anyway), but if you want to be rich, you start a company. The catch is that the job in the public service has very little risk, and you know how much you're going to get all the way till you retire. On the other hand, if you start your own business, you may go bankrupt, just break even, live comfortably, or strike it rich beyond your wildest dreams. Which job you choose is a matter of preference, really. There's no right or wrong.

Personally, I enjoyed the extreme conversational style of the book, although I'm not sure if I'd be able to hold myself in a conversation with the author (if I ever met him). There were lots of anecdotes, and lots of references to some guy called Popper. I should probably go read whatever the Popper guy wrote sometime too.