This book written by Nassim Nicholas Taleb was recommended by a reader who has given many worthwhile suggestions. That track record kept me reading a book I found to be frustratingly difficult. I do not recommend this book to anyone who wants to have a fun and easy read. The book was written by a very smart person who has contempt for people who don’t understand his wisdom. The kindest description is that he has supreme self-confidence, although “arrogant” works also. I was frustrated with the frequent passages that said something was to be explained in more detail in a future chapter. I was also frustrated by his lengthy references to ancient philosophers and poets. Taleb wants the reader to be impressed by his scholarly intellect.  I write this understanding that the author describes those who write reviews that are not fawningly positive as “idiots.”

Getting the whining out of the way, what about the book? The author says in the Preface that his second version of the book “…reflects this author’s drift into becoming a little less of a student of uncertainty…and more of a researcher into how people are fooled by it.” I’ve lost track of the number of people he criticizes. He writes “…that journalism may be the greatest plague we face today.”  He describes financial television commentators and “chief strategists” of the major investment banks as being “…nothing better than entertainers. ”CNBC is specifically mentioned as having “…allowed a collection of extrovert practitioners long on theories to voice them…One often sees respectable people making ludicrous (but smart sounding) statements…” Taleb notes that the people reading the Wall Street Journal on the commuter trains are wasting their time because hours spent studying the news doesn’t improve predictive abilities. He levels derogatory words at George Will in several passages and makes fun of Jim Rogers, the “legendary investor.”  He is an admirer of George Soros who can easily and quickly change his opinion, which has resulted in him making huge amounts of money.

The recounting of the myth about Croesus, considered the richest man of his time, and a Greek legislator named Solon, is a good start to the book. Croesus was frustrated that Solon was openly unimpressed with his wealth and asked whether Solon had ever known a happier man. Solon explained that happiness may suffer change. (As Yogi Berra explained, “It ain’t over until it’s over.”)  Croesus was defeated by the Persian king Cyrus and was about to be put to death by burning. He shouted, “Solon was right!” Cyrus spared him after hearing the explanation.

One Wall Street trader named Nero Tulip is a central character in the book. Nero observed that “…no other lawful profession…could be as devoid of boredom as that as a trader.” He thinks even high-sea piracy would have more dull moments than that of a trader. I think there is a lesson to be learned and remembered that Nero invested his own personal wealth only in Treasury bonds. He couldn’t bring himself to own stocks; because he was suspicious the stock market is an investment scam. He was a model for the author because he said he loved taking small losses by quickly selling losing positions and expressed that he wanted his winners to be large.

Another trader named John “…would have revealed that he presented the intellectual depth and sharpness of mind of an aerobics instructor (though not the physique).” John had amassed large personal wealth and lived a life that displayed it. John’s highly leveraged investments in high yield bonds began to melt down. His first reaction was to declare the market wrong. His wealth accumulated over seven good years was gone along with his job in seven days. The author describes people such as John as being lucky fools who do not have the slightest suspicion they are lucky fools.

I found few clues about Taleb’s personal investment strategies. He does explain that he became a trader because he had a desire to be a comfortable man of leisure. He “…needed to make a non random buck to secure my newly lost future and wealth that had just evaporated with the Lebanese war.” He refuses to express that being a trader takes any kind of admirable intellect. He titles chapter nine “It is easier to buy and sell than to fry an egg.” He observes that investors often make a good decision but give up before the market recognizes the wisdom of the investment and thus miss out on the rewards.  A very brief description is given of options trading.

There is an entertaining description of “….QWERTY to describe the vicious dynamics of winning and losing in an economy.” The arrangement of keys on a typewriter was made to avoid jamming before the days of electric typewriters and computer keyboards. The arrangement actually slows down typing. Several attempts have been made to make a more efficient arrangement, but they all failed. People had been trained on a QWERTY keyboard and it was not possible to get them to change.

Taleb writes that his actions, just like all other human beings, can be controlled by emotions. He admits to finding himself taking actions based on superstitions and says he as “…prone to foolishness as anyone I know…” He often mentions the research and writing of Daniel Kahneman in discussing how people make judgments and reach decisions. (The review of “Thinking Fast and Slow” recommended by the same person who recommended this book was posted April 9th.)

My opinion is that the best part of the book is in the closing chapters. There are fewer references to the ancient philosophers and more down to earth insights. A subtitle is, “I am Not So Intelligent.” Taleb starts “…every meeting of my boutique (his group of traders) by convincing everyone that we are a bunch of idiots who know nothing and are mistake prone, but happen to be endowed with the rare privilege of knowing it.” He gives some brief personal advice under the subtitle, “Randomness and Personal Elegance,” for anyone facing execution. “Dress your best on your execution day (shave carefully); try to leave a good impression on the death squad by standing erect and proud. Try not to play victim when diagnosed with cancer…”

Taleb has some advice for aspiring authors, although I’m not certain how the advice can be translated into book sales. He writes, “It is better to have a handful of enthusiastic advocates than hordes of people who appreciate your work—better to be loved by a dozen than liked by hundreds.” I believe he reveals one of what I consider to be one of the greatest flaws to the book when he describes how he prefers writing books to papers. He doesn’t like papers because they often have limits to length, and he believes “…the length of the piece needs to remain unpredictable.”

Read Part III of the book (beginning on page 219 in the version I read) if you want to get a sample of the author’s writing.  It took me more than two weeks to slug my way thought the entire book. There are many worthwhile passages, but you have to work at finding them. Perhaps that is what Taleb intends? Don’t buy the book. Check it out of the library.