I guess I shouldn’t have been surprised by Nassim Nicholas Taleb’s recent Wired article “Beware the Big Errors of ‘Big Data’.” Since 2004, the derivatives trader turned philosopher has published a trilogy of highly-entertaining and provocative books, “Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets,” “The Black Swan: The Impact of the Highly Improbable,” and “Antifragile: Things That Gain from Disorder,” on the perils of modeling and prediction in today’s world.
In “Fooled by Randomness,” Taleb assails the financial services community for its dumb luck, its hubris and its reckless conduct. The book’s point of departure is that the human brain sees the world as less random, and conversely, more well-behaved than it actually is. We often mistake pure luck for skill, elevating lucky fools to guru status. We’re wired for certainty, determinism and causality, even when they don't exist. We think linearly, continuously and symmetrically, elevating the bell curve to religious status.
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