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Tuesday, August 09, 2005

Fooled by Randomness, by Nassim Nicholas Taleb

This is probably the best financial book I've read all year. (Which doesn't say much, I admit) It's not for anyone who hasn't read any of the classics (like Malkiel's Random Walk Down Wall Street), but it's very much worth reading since even for those of us who have a decent mathematical background, interpreting the results of the mathematics in real world terms is a rare and useful skill, and Taleb has a good knack for explaining how to do it.

I have no large desires to sacrifice much of my personal habits, intellectual pleasures, and personal standards in order to become a billionaire like Warren Buffett, and I certainly do not see the point of becoming one if I were to adopt Spartan (even miserly) habits and live in my starter house... Becoming rich is not directly a moral achievement, but that is now where the severe flaw in the book lies.
Note: the book in question is The Millionaire Next Door.

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