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ThinkMagnet (James Mitchell) writes " Blink: The Power of Thinking Without Thinking is Malcolm Gladwell's foray into the study of intuitive decision-making. The author, a former Washington Post science and technology writer, reveals his journalistic background in his narrative style. His assertions are based on recent scientific findings, but are always presented as a story. This makes good conversation fodder, but can frustrate readers who prefer direct presentation of scientific arguments." Read on for the rest of Mitchell's review. Blink: The Power of Thinking Without Thinking author Malcolm Gladwell pages 288 pages publisher Little, Brown (January 11, 2005) rating 8 reviewer James Mitchell ISBN 0316172324 summary This book discusses in narrative style the mechanics of subconscious snap decisions.

First, Gladwell introduces a concept called "thin-slicing." This involves the human brain's critical reduction of information to make predictions about complicated systems. For example, a system developed at the University of Washington can predict with 95% accuracy whether a couple will be divorced within fifteen years, based entirely upon one hour of observed interaction.

Next, Gladwell discusses analogous ways the human brain uses thin-slicing to make subconscious snap decisions. Interestingly, this rapid decision-making process can easily be primed by external influences. External influences affect more decisions than many people care to admit; these factors form the basis for snap judgments and first impressions.

Gladwell relates a study of how well a subject's personality was evaluated either by strangers who visited the subject's dorm room for fifteen minutes or by friends that knew the subject well. Friends were more accurate about extraversion and agreeableness, but the strangers were better at gauging conscientiousness, emotional stability, and openness to new experiences. Thin-slicing isn't always correct; it depends on having the right information.

Superficial traits can be used to the advantage of an actor trying to project a particular characterization. Similarly, an authority figure can dress and behave in a particular fashion to influence subordinates. Warren G. Harding made overwhelmingly positive first impressions throughout his political career, although he is considered by historians to be one of the worst American presidents. Despite his consistently lackluster performance, his attractive bearing and appearance camouflaged his shortcomings.

On the other hand, by understanding the fallibilities of intuition, one can influence others' unconscious decision-making processes and be more aware of influences on one's own intuition. People can control and develop their intuitive decision-making skills. For instance, a successful car salesman would never be distracted by the appearance of a customer to the detriment of a sale. A portion of the book discusses physiological tests that reveal the strength of stereotypes in subconscious decision making by measuring reaction times.

Having defined the capabilities and limitations of intuitive decision-making, Gladwell spends a chapter focusing on spontaneity through the story of General Paul Van Riper and Millennium Challenge '02. A technologically advanced military with a vast array of information collection and "common operational picture" was pitted against a less technologically capable adversary led by General Van Riper. Much as David defeated Goliath, Van Riper's force inflicted staggering losses on his information-gorged enemy. His victory illustrates the utility of pre-arranged structure (such as "commander's intent" or "desired endstate") to empower subordinates to make spontaneous decisions. The fog of war couldn't really be defied, but decision makers could be trained to cope well with uncertainty.

The latter parts of the book discuss how intuitive decision-making can fall short. Humans' senses and subconscious minds can be negatively affected in stressful environments where stimuli are distorted and thin-slicing can easily go awry. Gladwell takes examples from recent developments in police procedures designed to avoid situations that adversely affect law enforcement personnel. For instance, many departments make their officers patrol individually. Without partners, they are more likely to wait for backup before entering dangerous situations. The author also performs a detailed deconstruction of the Amadou Diallo shooting in New York City. He concludes that the tragedy was not a product of conscious injustice, but simply a chain reaction of impaired snap decisions made within seven seconds of violence.

Overall, Blink makes for a quick read and is sure to stimulate conversation. Its premise is simple, and it contains ample food for thought. Its discussion of priming the intuition with particular stimuli and impaired "thin-slicing" provides a useful tool in deconstructing human behavior. The strengths and weaknesses of intuition-priming and thin-slicing are useful knowledge for any professional decision-maker.

You can purchase Blink: The Power of Thinking Without Thinking from bn.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.

ThinkMagnet (James Mitchell) writes " Blink: The Power of Thinking Without Thinking is Malcolm Gladwell's foray into the study of intuitive decision-making. The author, a former Washington Post science and technology writer, reveals his journalistic background in his narrative style. His assertions are based on recent scientific findings, but are always presented as a story. This makes good conversation fodder, but can frustrate readers who prefer direct presentation of scientific arguments." Read on for the rest of Mitchell's review. Blink: The Power of Thinking Without Thinking author Malcolm Gladwell pages 288 pages publisher Little, Brown (January 11, 2005) rating 8 reviewer James Mitchell ISBN 0316172324 summary This book discusses in narrative style the mechanics of subconscious snap decisions.

First, Gladwell introduces a concept called "thin-slicing." This involves the human brain's critical reduction of information to make predictions about complicated systems. For example, a system developed at the University of Washington can predict with 95% accuracy whether a couple will be divorced within fifteen years, based entirely upon one hour of observed interaction.

Next, Gladwell discusses analogous ways the human brain uses thin-slicing to make subconscious snap decisions. Interestingly, this rapid decision-making process can easily be primed by external influences. External influences affect more decisions than many people care to admit; these factors form the basis for snap judgments and first impressions.

Gladwell relates a study of how well a subject's personality was evaluated either by strangers who visited the subject's dorm room for fifteen minutes or by friends that knew the subject well. Friends were more accurate about extraversion and agreeableness, but the strangers were better at gauging conscientiousness, emotional stability, and openness to new experiences. Thin-slicing isn't always correct; it depends on having the right information.

Superficial traits can be used to the advantage of an actor trying to project a particular characterization. Similarly, an authority figure can dress and behave in a particular fashion to influence subordinates. Warren G. Harding made overwhelmingly positive first impressions throughout his political career, although he is considered by historians to be one of the worst American presidents. Despite his consistently lackluster performance, his attractive bearing and appearance camouflaged his shortcomings.

On the other hand, by understanding the fallibilities of intuition, one can influence others' unconscious decision-making processes and be more aware of influences on one's own intuition. People can control and develop their intuitive decision-making skills. For instance, a successful car salesman would never be distracted by the appearance of a customer to the detriment of a sale. A portion of the book discusses physiological tests that reveal the strength of stereotypes in subconscious decision making by measuring reaction times.

Having defined the capabilities and limitations of intuitive decision-making, Gladwell spends a chapter focusing on spontaneity through the story of General Paul Van Riper and Millennium Challenge '02. A technologically advanced military with a vast array of information collection and "common operational picture" was pitted against a less technologically capable adversary led by General Van Riper. Much as David defeated Goliath, Van Riper's force inflicted staggering losses on his information-gorged enemy. His victory illustrates the utility of pre-arranged structure (such as "commander's intent" or "desired endstate") to empower subordinates to make spontaneous decisions. The fog of war couldn't really be defied, but decision makers could be trained to cope well with uncertainty.

The latter parts of the book discuss how intuitive decision-making can fall short. Humans' senses and subconscious minds can be negatively affected in stressful environments where stimuli are distorted and thin-slicing can easily go awry. Gladwell takes examples from recent developments in police procedures designed to avoid situations that adversely affect law enforcement personnel. For instance, many departments make their officers patrol individually. Without partners, they are more likely to wait for backup before entering dangerous situations. The author also performs a detailed deconstruction of the Amadou Diallo shooting in New York City. He concludes that the tragedy was not a product of conscious injustice, but simply a chain reaction of impaired snap decisions made within seven seconds of violence.

Overall, Blink makes for a quick read and is sure to stimulate conversation. Its premise is simple, and it contains ample food for thought. Its discussion of priming the intuition with particular stimuli and impaired "thin-slicing" provides a useful tool in deconstructing human behavior. The strengths and weaknesses of intuition-priming and thin-slicing are useful knowledge for any professional decision-maker.

You can purchase Blink: The Power of Thinking Without Thinking from bn.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.

adamba writes: "Why are manhole covers round?" "How many gas stations are there in the United States?" "How would you design a remote control for venetian blinds?" "What company is famous for interview questions like those?" You might not know the answer to the first three questions, but you probably know the last one. The notion of asking "Microsoft interview questions," quick logic puzzles and brainteasers, has become accepted wisdom for many technology companies. In comparison, the questions asked during traditional interviews, such as "Describe your typical day" and "What is your greatest weakness?" seem too simplistic, too easy to handle with a prepared answer, too prone to allowing weak candidates to slip through: they simply don't reveal enough about the person. While the Microsoft questions appear to be a better way to evaluate people, the issue has never really been seriously examined. Microsoft's success would seem to make the argument pointless: Can $250 billion in market capitalization be wrong?" Read on for an interesting look at the details and justifications for this kind of interview. How Would You Move Mount Fuji? Microsoft's Cult of the Puzzle author William Poundstone pages 288 publisher Little Brown & Company rating 9 reviewer Adam Barr ISBN 0316919160 summary The scoop on Microsoft interviews--with answers!

Now comes a new book, How Would You Move Mount Fuji? Microsoft's Cult of the Puzzle - How the World's Smartest Company Selects the Most Creative Thinkers by science writer William Poundstone. Poundstone talked to various people who have been involved in Microsoft hiring, including those who were interviewed, and those who gave interviews (full disclosure: I worked at Microsoft for ten years and was one of the people he talked to). He includes a lengthy list of questions, and most interestingly for many people, he also includes answers.

In the book, Poundstone traces the origins of this type of question, providing some fascinating information on the history of intelligence testing. He then chronicles how a certain type of puzzle interview caught on in the high-tech industry. Microsoft was not the first company to ask such questions, but it certainly popularized it.

Poundstone explains that responding to a problem you can't solve could be thought of as the fundamental problem in Artificial Intelligence (AI), and then continues,

"The problems used in AI research have often been puzzles or games. These are simpler and more clearly defined than the complex problems of the real world. They too involve the elements of logic, insight, and intuition that pertain to real problems. Many of the people at Microsoft follow AI work closely, of course, and this may help to explain what must strike some readers as peculiar--their supreme confidence that silly little puzzles have a bearing on the real world."

It could be--or maybe Microsoft employees assume that since they were hired that way, it's a great way to hire (and complaints from those who were not hired are just sour grapes). Most developers I knew thought of AI as a pretty academic discipline, and were more concerned with putting a dialog box up at the right location on the screen than trying to pass the Turing Test.

Nevertheless, as companies seek to emulate Microsoft, the questions have caught on elsewhere. And as Poundstone put it, such questions have now "metastasized" to other industries, such as finance.

This makes the effectiveness of these questions an important issue. Poundstone first presents evidence that "Where do you see yourself in five years" and "What are you most proud of" are fairly pointless questions. In one experiment he describes, two trained interviewers conducted interviews with a group of volunteers. Their evaluations were compared to those of another group who saw a fifteen second video of the interview: the candidate entering the room, shaking hands, and sitting down. The opinions correlated strongly; in other words, when you are sitting in an interview telling the interviewer what you do on your day off and what the last book you read was, the interviewer has already made up his or her mind, based on who knows what subjective criteria. As Poundstone laments, "This would be funny if it weren't tragic."

Puzzle interviews could hardly be worse than that, but it turns out the evidence that they are better is doubtful. Poundstone shows how intelligence tests are on very dubious scientific standing, and points out that Microsoft's interviews are a form of IQ test, even though Microsoft does not admit that publicly. In his 1972 book of puzzles Games for the Superintelligent, Mensa member James Fixx wrote, "If you don't particularly enjoy the kinds of puzzles and problems we're talking about here, that fact alone says nothing about your intelligence in general". Yet virtually every Microsoft employee accepts the "obvious" rationale, that only people who do well in logic puzzles will do well at Microsoft.

There is another important point about puzzle-based interviews: although you would think that they were naturally more objective than traditional interviews--more black or white, right or wrong, and therefore less subject to interpretation by the interviewer--in fact, interviewers' evaluation of answers can be extremely subjective. Once you have formed your impression of a candidate from the enter/handshake/sit-down routine at the start of the interview, it is easy to rationalize a candidate's performance in an interview, either positively or negatively. They needed a bunch of hints to get the answer? Sure, but they were just small hints and it's a tough problem. They got the correct answer right away? No fair, they must have seen it before.

Given the ease with which the answers to logic puzzles can be spun, it is highly probable that Microsoft interviewers are also making fifteen-second judgements of candidates, without even realizing it.

Three years ago Malcolm Gladwell wrote a New Yorker article about job interviews called The New-Boy Network. Gladwell quotes much of the same research as Poundstone, and relates the story of Nolan Myers, a Harvard senior who is being recruited by Tellme and Microsoft. He has done a one-hour interview with Hadi Partovi of Tellme, and spoken to Gladwell, the author, in a coffee shop for about ninety minutes. His initial interaction with Microsoft was much briefer: he asked Steve Ballmer a question during an on-campus event, which led to an exchange of emails.

As Gladwell writes, "What convinced Ballmer he wanted Myers? A glimpse! He caught a little slice of Nolan Myers in action and--just like that--the C.E.O. of a four-hundred-billion-dollar company was calling a college senior in his dorm room. Ballmer somehow knew he liked Myers, the same way Hadi Partovi knew, and the same way I knew after our little chat at Au Bon Pain."

So Steve Ballmer, who obviously does not feel that he is choosing people based on traditional interviewing techniques, and in fact was one of the originators of the "Microsoft questions," is more prone to making fifteen-second judgements than he would probably admit.

The flaw, if any, may simply be in ascribing too much value to the puzzles themselves. The actual questions may be secondary: the company might do as well asking geek-centric trivia questions, like "What was the name of Lord Byron's niece?" That does not mean Microsoft is hiring the same people that an investment bank is going to hire. The cues they look for may be different: instead of a firm handshake and the right tie, they may be looking for intelligent eyes and fast speech, or whatever non-verbal cues ubergeeks throw off.

A Microsoft interview candidate will typically talk to four or five employees, and in general must get a "hire" recommendation from all of them. Even if the employees are actually basing their recommendations not on puzzle-solving ability but on a subconscious evaluation, it is unlikely that all of them will be subconsciously using the same criteria. Emitting the proper signals to satisfy four different Microsoft employees may be as good a judge of a candidate as any, and Microsoft may be good at interviewing simply because it tends to hire people that are similar in some unknown way to the current group of employees. If another company adopts puzzle interviews, they may discover that they are not hiring the smartest people, just the people most like themselves.

In the end, the best thing that can be said about puzzle interviews is that as a screening technique, they are no worse than traditional interviews. And there are some side effects: some candidates may be more prone to accept a job with Microsoft because of the interview style, and imparted wisdom about the technique may function as a useful pre-screening of prospective applicants. And of course, employees may get a kick out of showing a candidate how smart they are, although this can have a downside: How Would You Move Mount Fuji? has several examples of interviewers who seemed more concerned with proving their intelligence than in gauging that of the candidate. One former Microsoftie admits they asked candidates a question they did not know the answer to, just to see what they would do.

Two chapters of the book, entitled "Embracing Cluelessness" and "How to Outsmart the Puzzle Interview," attempt to help interview candidates who are confronted with such puzzle questions. The official advice is scarce: Microsoft's Interview Tips page advises candidates "Be prepared to think," which isn't much help, since presumably nobody is advising the opposite. Some of the recruiters who go to college campuses have their own little tips; for example, one recruiter named Colleen offers a quote from Yoda: "Do or do not, there is no try." Other recruiter tips include "Stay awake" and "Always leave room for dessert." Luckily, Poundstone gives advice that is a bit more concrete than that.

Microsoft puzzles can be divided into two types: those where the methodology is more important than the answer, and those where only the answer matters.

The "methodology" puzzles break into two classes, "design" puzzles ("How would you design a particular product or service?") and "estimation" puzzles ("How much of a certain object occupies a certain space?"--for example, "How much does the ice in a hockey rink weigh?")

Design questions exist because at Microsoft, responsibility for product development is split between two groups, the developers and the program managers. Developers write code: program managers design the user interface, trying to balance the needs of users with the technical constraints from developers. As Poundstone points out, while estimation questions and general logic puzzles are universal, the design questions are reserved for program managers.

The reason is that program management does not require the specific skills of development. Designing software is something any reasonably intelligent person can attempt, so the design questions are aimed at finding people who are really good at design. In fact one program manager I worked with told me that the best way to distinguish a potential program manager from a potential developer was to ask them to design a house: a developer would jump right in, while a program manager would step back and ask questions about the constraints on the house.

(Developers, meanwhile, are usually asked to write code on the whiteboard, an experience that program management candidates are spared. Books exist that discuss coding problems in more detail, such as Programming Interviews Exposed: Secrets to Landing Your Next Job by John Mongan and Noah Suojanen, which covers many standard programming questions and even includes answers to a few of the logic puzzles that Poundstone addresses).

Poundstone does include some of these design questions and provides sample answers. But the "answer" to these questions is really the process involved: ask questions, state assumptions, propose design. That's all you need to know about them. If you are wondering why Microsoft did not use this logical procedure when confronted with the question "Design a response to the open source movement," but instead seems to have spouted off the first five things that popped into its collective head--that's just more proof that performance in interviews is not necessarily a great indicator of future job performance.

Another recruiter, Stacey, gives the following interview tip: "The best interview tips I can give you are to relax and think for yourself. For a Microsoft interview, be prepared to answer both technical and problem solving questions. Ask clarifying questions and remember to think out loud. We are more interested in the way your are thinking through a problem then we are in your final answer!"

That approach works for the "methodology" questions: design and estimation. What about the other kinds--the more traditional brainteasers? For those questions, forget your methodology. What Microsoft interviewers want is the right answer.

James Fixx, writing three years before Microsoft was founded, offers some advice that may hearten potential Microsoft recruits: "One way to improve one's ability to use one's mind is simply to see how very bright people use theirs." With that in mind, we can follow along with Poundstone as he explains the solutions to the puzzles that the very bright people at Microsoft ask during interviews. He certainly delivers the goods: 100 pages of answers. Unfortunately, it's not clear whether seeing those answers help you tune up your brain to answer problems that do not appear in the book.

In his book, Fixx spends some time trying to explain what, as he so delicately puts it, "the superintelligent do that's different from what ordinary people do." For example, trying to describe how a superintelligent person figures out the next letter in the sequence "O T T F F S S", he advises people to think hard: "Persistence alone will now bring its reward, and eventually a thought occurs to him." Talking about how to arrange four pennies so there are two straight lines with three pennies in each line, he writes "The true puzzler...gropes for some loophole, and, with luck, quickly finds it in the third dimension." Further hints abound: "The intelligent person tries... not to impose unnecessary restrictions on his mind. The bright person has succeeded because he does not assume the problem cannot be solved simply because it cannot be solved in one way or even two ways he has tried." This advice sounds great in theory, but how do you apply it in practice? How do you make your mind think that way? As Poundstone quotes Louis Armstrong, "Man, if you have to ask 'What is it?' you ain't never goin' to know."

Poundstone recognizes that the flashes of insight that Fixx describes, and that Microsoft interviewers expect, are more of a hit-or-miss thing than the inevitable result of hard thinking by an intelligent person: "What is particularly troubling is how little 'logic' seems to be involved in some phases of problem solving. Difficult problems are often solved via a sudden, intuitive insight. One moment you're stuck; the next moment this insight has popped into your head, though not by any step-by-step logic that can be recounted."

During interview training I participated in when I worked there, Microsoft would emphasize four attributes that it was looking for when hiring: intelligence, hard work, ability to get things done, and vision. Intelligence was always #1, yet despite this, Poundstone says that the official Microsoft people he talked to would shy away from the word "intelligence", preferring to use terms like "bandwidth" and "inventiveness". Indeed Microsoft's Interview Tips web page says "We look for original, creative thinkers, and our interview process is designed to find those people." No mention of the word intelligence or any notion that interviews are some sort of intelligence test.

In fact, although I think that most Microsoft people would consider the puzzle tests to be mainly a test of intelligence, they may do better at testing some of the other desired attributes. Psychologist and personnel researcher Harry Hepner once said, "Creative thinkers make many false starts, and continually waver between unmanageable fantasies and systematic attack." Poundstone explains that you have to figure out when your fantasies have become too unmanageable: "To deal effectively with puzzles (and with the bigger problems for which they may be a model), you must operate on two or more levels simultaneously. One thread of consciousness tackles the problem while another, higher-level thread monitors the progress. You need to keep asking yourself 'Is this approach working? How much time have I spent on this approach, and how likely is it to produce an answer soon? Is there something else I should be trying?'"

This is great advice, not just for a puzzle, but for a job, and life in general. So watching someone think through a puzzle might be a great way to see how they would tackle a tough problem at work--the "hard work" and "get things done" abilities that Microsoft is also looking for. As James Fixx writes in the sequel More Games for the Superintelligent, "While the less intelligent person, unsure of ever being able to solve a problem at all, is easily discouraged, the intelligent person is fairly sure of succeeding and therefore presses on, discouragements be damned."

Unfortunately, the typical Microsoft interviewer is not looking at the approach to puzzle questions as a test of perseverence. Someone who tries five different attempts might demonstrate more resourcefulness than someone who just "gets it"--but they would get turned down. Interviewers who ask puzzle questions are probing the "intelligence" category, and they want the right answer.

The last chapter of the book is titled "How Innovative Companies Ought to Interview" and deals with a soon-to-be-problem: How will the industry be affected by the publication of this book? Will interviews still work if everyone knows the secrets?

Knowledge of Microsoft-style questions is already out there on the Internet. Since the candidates who participate in the interviews do not sign a Non-Disclosure Agreement, they are free to tell others the questions they were asked, and from these reports databases of questions have been built up. Poundstone includes the URLs of several sites, including Kiran Bondalapati's "Interview Question Bank", Michael Pryor's "Techinterview", Chris Sells' "Interviewing at Microsoft", and William Wu's "Riddles". These sites generally don't include answers, but certainly knowing the types of questions to expect can be an advantage.

Microsoft employees are aware of such sites. Once, when I sent email describing the questions I had asked a Microsoft candidate, I got a nasty reply from someone else at the company: Didn't I know that the question I had asked was posted on a website of known Microsoft interview questions? On the other hand, with no official internal Microsoft list of questions, some employees are undoubtedly using these sites to come up with material. Even within Microsoft there is debate about which questions are reasonable. In an unscientific survey I took of former Microsoft program managers, opinion was divided on the validity of some of the questions. A question described by one person as a good test of a candidate's ability was dismissed by another as foolish.

Poundstone does point out that some questions are silly and should not be asked ("Define the color green"), but he gives serious answers to others which I don't think are worthwhile either, including "If you could remove any of the fifty U.S. states, which would it be?" and "How do they make M&Ms?" Furthermore, I would argue that if an entire class of questions can be "tainted" by How Would You Move Mount Fuji?, they don't deserve to be asked in the first place. Estimation questions might be invalidated by the revelation that the way to solve them was to multiply together a bunch of wild guesses. The strategy of using a design question to to differentiate program management candidates from developer candidates might also go the way of the dodo. Is that necessarily a bad thing?

How Would You Move Mount Fuji? is worth reading even if you don't plan on interviewing at Microsoft. It has some interesting history, a few good Microsoft tidbits, and puzzles that are entertaining on their own. For those considering a job at Microsoft, the book may ratchet up the "arms race" of questions. Microsoft employees may assume that people interviewing have read the book--so if you are going to interview there, or anywhere else that imitates their style, you should probably read it too.

You can purchase How Would You Move Mount Fuji? Microsoft's Cult of the Puzzle from bn.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.

Max Tardiveau writes "I just finished Nassim Nicholas Taleb's Fooled by Randomness. It is an enjoyable book, written engagingly by an interesting character -- the kind of book that makes you think twice about certain things (for instance, the fact that you're not dead: is that really because you're so darn good, or does dumb luck play a part?) Although written all the way back in 2001, this book is more relevant than ever, since one of its major topics is the impact of unpredictable events on markets, insurance, and our perception of life in general. In fact, Taleb makes a living from unforeseen events; these days, that seems like a rather cunning niche." Read on for the rest of his review of this book. Fooled by Randomness author Nassim Nicholas Taleb pages 220 publisher Texere rating 8 reviewer Max Tardiveau ISBN 1587990717 summary Debunking fallacies of observation, Taleb reminds us of the pervasive ineffables that complicate life at every turn.

The main topic of the book is the fact that all humans are simply terrible at judging probabilities. Taleb is a securities trader, so a lot of the book revolves around financial probabilities, but his argument is mainstream and requires absolutely no knowledge of the markets. The book details examples of people wildly misjudging risks and probabilities in many contexts. Often that misestimation is understandable in advance of certain events, but harder to excuse after they've occurred; Taleb hits pretty hard on what he calls "data snoopers," his term for people who back-fit theories to existing data.

One of the most notorious examples is the Bible code (which has been thoroughly debunked), but Taleb argues that analysts who spend their time trying to find patterns in historical market data are no different: if you try long enough and hard enough, you will unavoidably find apparent regularities, which can be extremely compelling when seen in isolation. In context, though, they dissolve into nothing but meaningless statistical anomalies. Taleb rightfully compares these searches for meaning to the famous monkeys and typewriters parable.

Taleb's best example of poor probability intuition is probably the infamous survivor bias, which is our tendency to be disproportionately impressed by success. We almost always ignore the fact that, for one success story, there are many failures. But we seldom hear about the failures (just like we never hear about the many theories that didn't fit the data). So it's all a game of numbers: out of 10,000 traders, a few are statistically bound to be successful, even if they are nothing more than lucky idiots. The fact that they succeeded does not mean anything. It doesn't mean that they are bad traders, but it doesn't mean that they are good traders either, because on average somebody had to succeed.

One of Taleb's hot buttons is that people tend to be too confident in what they know. He argues convincingly that we should take everything, including science, with a grain of salt. Writing about Karl Popper, he points out that there are only two kinds of scientific theories: those that are demonstrably false, and those that are not yet demonstrably false. An irksome (but sadly true) observation, yet most people behave as if what they know is eternal truth. One could of course argue that Popper's observation is but another kind of truth, but I tend to put a lot more trust in people who question what they know than in people who don't.

Another of Taleb's peeves is the human tendency to over-attribute every random event (the old post hoc, ergo propter hoc). For instance, a commentator saying that "the Dow went down ten points today on concerns about Iraq" is talking nonsense: there is no way anyone can tie such a small market move to any particular reason. I found this specific point (which in retrospect is blindingly obvious) especially enlightening, as I am embarrassed to admit that, until now, I just accepted those market comments at face value.

Taleb also has some fun at the expense of economists and analysts, especially those whose predictions turned out wrong, but who claim that the theories were in fact right, and that the facts simply weren't supposed to be that way. This is what he calls denial of history, and is common among investors and gamblers (the two being of course close cousins).

The style of the book is informal and funny, and often meandering. We hop from one topic to the next, which occasionally may detract from the book's continuity, but overall the author's points come through loud and clear. Ironically for a man who advocates self-doubt, Taleb is starkly self-confident, though not in an irritating way.

Taleb is an intriguing, multi-cultural, iconoclastic character that has been around Wall Street for a while, and now runs his own small firm. Malcolm Gladwell (author of The Tipping Point, an absolute must-read for anyone who owns a brain) has written an excellent article that shows how Taleb's reasoning runs counter to just about every bit of conventional Wall Street wisdom. If you're interested in the markets, especially derivatives, and how Taleb trounces most of Wall Street's voodoo doctors, this moderately technical interview from 1996 is worth reading too.

Overall, a warmly recommended book.

You can purchase Fooled by Randomness from bn.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.

Max Tardiveau writes "I just finished Nassim Nicholas Taleb's Fooled by Randomness. It is an enjoyable book, written engagingly by an interesting character -- the kind of book that makes you think twice about certain things (for instance, the fact that you're not dead: is that really because you're so darn good, or does dumb luck play a part?) Although written all the way back in 2001, this book is more relevant than ever, since one of its major topics is the impact of unpredictable events on markets, insurance, and our perception of life in general. In fact, Taleb makes a living from unforeseen events; these days, that seems like a rather cunning niche." Read on for the rest of his review of this book. Fooled by Randomness author Nassim Nicholas Taleb pages 220 publisher Texere rating 8 reviewer Max Tardiveau ISBN 1587990717 summary Debunking fallacies of observation, Taleb reminds us of the pervasive ineffables that complicate life at every turn.

The main topic of the book is the fact that all humans are simply terrible at judging probabilities. Taleb is a securities trader, so a lot of the book revolves around financial probabilities, but his argument is mainstream and requires absolutely no knowledge of the markets. The book details examples of people wildly misjudging risks and probabilities in many contexts. Often that misestimation is understandable in advance of certain events, but harder to excuse after they've occurred; Taleb hits pretty hard on what he calls "data snoopers," his term for people who back-fit theories to existing data.

One of the most notorious examples is the Bible code (which has been thoroughly debunked), but Taleb argues that analysts who spend their time trying to find patterns in historical market data are no different: if you try long enough and hard enough, you will unavoidably find apparent regularities, which can be extremely compelling when seen in isolation. In context, though, they dissolve into nothing but meaningless statistical anomalies. Taleb rightfully compares these searches for meaning to the famous monkeys and typewriters parable.

Taleb's best example of poor probability intuition is probably the infamous survivor bias, which is our tendency to be disproportionately impressed by success. We almost always ignore the fact that, for one success story, there are many failures. But we seldom hear about the failures (just like we never hear about the many theories that didn't fit the data). So it's all a game of numbers: out of 10,000 traders, a few are statistically bound to be successful, even if they are nothing more than lucky idiots. The fact that they succeeded does not mean anything. It doesn't mean that they are bad traders, but it doesn't mean that they are good traders either, because on average somebody had to succeed.

One of Taleb's hot buttons is that people tend to be too confident in what they know. He argues convincingly that we should take everything, including science, with a grain of salt. Writing about Karl Popper, he points out that there are only two kinds of scientific theories: those that are demonstrably false, and those that are not yet demonstrably false. An irksome (but sadly true) observation, yet most people behave as if what they know is eternal truth. One could of course argue that Popper's observation is but another kind of truth, but I tend to put a lot more trust in people who question what they know than in people who don't.

Another of Taleb's peeves is the human tendency to over-attribute every random event (the old post hoc, ergo propter hoc). For instance, a commentator saying that "the Dow went down ten points today on concerns about Iraq" is talking nonsense: there is no way anyone can tie such a small market move to any particular reason. I found this specific point (which in retrospect is blindingly obvious) especially enlightening, as I am embarrassed to admit that, until now, I just accepted those market comments at face value.

Taleb also has some fun at the expense of economists and analysts, especially those whose predictions turned out wrong, but who claim that the theories were in fact right, and that the facts simply weren't supposed to be that way. This is what he calls denial of history, and is common among investors and gamblers (the two being of course close cousins).

The style of the book is informal and funny, and often meandering. We hop from one topic to the next, which occasionally may detract from the book's continuity, but overall the author's points come through loud and clear. Ironically for a man who advocates self-doubt, Taleb is starkly self-confident, though not in an irritating way.

Taleb is an intriguing, multi-cultural, iconoclastic character that has been around Wall Street for a while, and now runs his own small firm. Malcolm Gladwell (author of The Tipping Point, an absolute must-read for anyone who owns a brain) has written an excellent article that shows how Taleb's reasoning runs counter to just about every bit of conventional Wall Street wisdom. If you're interested in the markets, especially derivatives, and how Taleb trounces most of Wall Street's voodoo doctors, this moderately technical interview from 1996 is worth reading too.

Overall, a warmly recommended book.

You can purchase Fooled by Randomness from bn.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.

Codex The Sloth writes "Malcolm Gladwell (who amongst other things, wrote "The Tipping Point") has written an article for the New Yorker claiming that the role of the lone inventor is over. The example of Philo T. Fransworth (the "inventor" of Television) who failed because (amongst other reasons) he didn't have the big resources of a company to allow him to focus on his innovations. The thesis is that it is rare to have a single innovation that makes a product workable and that getting all of the inovations together requires a (large) corporation. No doubt others feel different."

AdamBa writes: "The New Yorker is running an interesting review of the book 'The Myth of the Paperless Office', also discussing 'Scrolling Forward'. Read it and the ever-informative Malcolm Gladwell will explain why paper enables collaborative work much better than computers do, why a messy desk is a sign of productivity, and give a little background on the inventor of the Dewey Decimal System to boot."