Saturday, July 17, 2010

The Story of Randomness

If you have not read the book Fooled by Randomness: The Hidden Role of Chance in the Markets and in Life, by Nassim Nicholas Taleb you probably should. Irrespective of whether you are active in the markets or not, randomness plays a big role in life. The amount of their success people attribute to their skill and talent is usually much higher than they should. Randomness (also known as "just pure chance" or the "game of statistics") plays a big role in what happens anywhere at any time.

It is not to say that we should just accept everything as random and stop putting effort into anything. Quite the opposite actually.

I had an interesting discussion with a co-worker on this same topic yesterday. We both came out of the discussion with the conclusion that all efforts of mankind, all steps towards advancement are nothing but an effort to reduce randomness that nature has bestowed upon us. A sportsperson practices and practices just to make sure that he has seen most things that can happen on a sports field and when the big moment comes, he is not surprised by anything. In fact most practise whether for an interview, for a presentation, for an exam is in some way, an effort to reduce the role of chance. We build houses, wear clothes, live in air-codnitioned places to reduce the randomness caused by weather.

Simply speaking: nature is random, whereas us humans want things to be orderly and predictable. So the struggle continues.

Enhanced by Zemanta

No comments:

Post a Comment