Fooled By Randomness – Nassim Taleb

The gist of Taleb’s book can be explained, at the risk of oversimplification, by using a few examples rooted in basic probability of the kind that relies on a simple coin toss experiment. Suppose one tosses a fair coin 5 times, with a reward associated with getting 5 consecutive heads. The probability associated with this [...]

A Short History of Financial Euphoria – John Kenneth Galbraith

In this book, Galbraith rounds up instances of financial booms and busts, starting from the Tuliopomania in the mid-1630s to the stock market crash in 1987. He cites two primary factors as being the cause of this financial euphoria: the brevity of financial memory and the association of wealth with intelligence. About the former, Galbraith [...]