Key Takeaways from Fooled by Randomness:
- Recognize the role of randomness in your life. Err on the side of assuming your success is based on randomness, and always work diligently to reduce the variability of your strategies.
- Recognize your own biases, and think critically about the conclusions you draw, rather than relying on common sense.
- Ignore the noise, chase the signal. Determine what matters to you (in your decision making of a particular theme) and don’t pay attention to the madness of the markets or the popular opinion.
- Remain skeptical of all of your long-held beliefs, lest you become married to a position and ignore its faults (surely to your own future detriment).
- Set up both contingency and prophylactic systems to encourage your rational thinking in the face of emotional upset. These will protect you from the frustrations associated with making emotional decisions devoid of critical thought.
- Conduct your affairs with personal elegance, because the only thing randomness cannot control is your behaviour. (If you get a chance, read pages 194 – 195 on personal elegance. They are superbly written and are of great value)