The Drunkard's Walk: How Randomness Rules Our Lives by Caltech professor Leonard Mlodinow was an enjoyable read, in the vein of many popular randomness books. Thanks to Dr. Zussman for the tip. Mlodinow discusses the history of statistics, LaPlace, Galton, Einstein, Bernoulli, Tversky and their ideas. There were no technical formulas and it is aimed at a popular audience, but did a good job of describing the heuristics and biases everyone is subject to. The idea that markets can be predicted runs straight counter to his ideas. The issue with the numbers is the cycles, and the existence of the larger cycles than what ever one is measuring.

His closing and a good message is that we can control one parameter, how many times we get up to bat. JK Rowling was rejected numerous times before getting published. Even the Beatles were turned down eight times. Thomas Watson Sr. from IBM says to increase the chances of success, increase the number of failures. While most would rather skew their returns to the right, its important to keep at the fray everyday. Like Croeseus, success is not a day, a week or a month, but only a lifetime.





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1 Comment so far

  1. Indie on July 13, 2009 10:06 pm

    An underlying fear has really settled-in in some of us over the last year. As today was a bull’s walk in the park i underperformed because i find it more and more difficult to take on risk. afraid of failure?

    Your last paragraph is the most uplifting thing i read all day. helps me refocus and put back more energy into my trader’s homework and trust my research and instinct.


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