Fooled by randomness

In his recent book, Fooled by Randomness, hedge-fund operator Nassim Taleb twists a familiar saying to provide an analogy for people (such as, say, some mutual fund investors) who make investments based solely on past performance:

If one puts an infinite number of monkeys in front of (strongly built) typewriters, and lets them clap away, there is a certainty that one of them would come out with an exact version of the Iliad. […] Now that we have found that hero among monkeys, would any reader invest his life’s savings on a bet that the monkey would write the Odyssey next?

[…] Think about the monkey showing up at your door with his impressive past performance. Hey, he wrote the Iliad. Quickly, sign him up for the sequel.


%d bloggers like this: