With all the ruckus that's happening in the US economy and the repercussions that are being felt across the globe, I thought it would be timely to revisit the things that Fooled by Randomness,written by Nassim Nicholas Taleb, are talking about.
Every single day, I see explanations of why certain things are happening - and grim prognostications of financial analysts and economists. Just today, I was amused by the news on how Bear Stearns was acquired by JP Morgan - and how Bear Stearns, an institution in the finance industry, was bought at a very, very, very low price.
As the market opens, I am sure that traders and investors are all rushing to "unload" and sell, sell, sell. (I can imagine one of my colleagues now tracking his investments online... I expect that he's going to be up all night tracking the movement of Wall Street. And that tomorrow may not be a good time to catch up with him. Maybe, next week. Post Easter.)
Now how does this tie back to Taleb's book?
Significantly.
If you have not read it, read it.
Well... let me take that back: If you're used to romance novels and fiction and other light reading, be prepared. Taleb discusses interesting - but deep - stuff in his book. You need to exercise those neurons a little bit.
If you were asleep during your basic stats and probability class, you'd probably have a hard time catching his drift. But a little patience will do you good.
Fooled By Randomness is a good read. And a good reminder.
That this - all these ruckus about the economy in the US and its effects on the stock market of different countries - will happen again. We never learn. We are not conditioned to learn from our mistakes. Unfortunately.
