Download the Book (PDF): Introduction A table of visitors from Europe were coming to the end of a long tasting menu at Eleven Madison Park. They had spent a week eating their way across New York, and one of them said, in the ordinary unguarded way people talk when the wine has been poured a few times, that for all of it they had never had a street hot dog. Someone from the floor team heard it. A member of staff went out to a cart on the corner, bought one, and brought it back

Dwonload the Book (PDF): Introduction There is a question that anyone who allocates capital has to answer and almost nobody answers properly: how do you tell whether a manager with a good record is any good? The obvious method is to look at the record. Nassim Taleb's Fooled by Randomness is an extended demonstration that the obvious method does not work, and that the reasons it does not work are statistical rather than psychological — though the psychology explains why the er

Download the Book (PDF): Introduction Warren Buffett has said that The Intelligent Investor is by a considerable margin the best book on investing ever written. He has also said that the two chapters that matter most are the one about a fictional business partner and the one about a bridge. Neither contains a single valuation formula. That is the first thing a student needs to understand about this book, and the thing that makes it survivable. Benjamin Graham published it in

Download the Book (PDF): Introduction There is a peculiarity about A Random Walk Down Wall Street that puzzles nearly every student who reads it. Here is the definitive popular defence of the efficient market hypothesis, and roughly a third of it consists of detailed accounts of episodes in which prices were manifestly, catastrophically wrong. The puzzle dissolves once the thesis is stated precisely, and stating it precisely is the first thing this guide does — because the ve

Download the Book (PDF): Introduction Skin in the Game is not really a book about ethics, though it is written as one. It is a book about a design problem: how to arrange an institution so that the people making decisions receive information about whether their decisions are any good. Nassim Taleb's answer is that there is only one mechanism that reliably works, and it is exposure — requiring the decision-maker to bear a share of the loss. Every other device the governance fi

Download the Book (PDF): Introduction "Antifragile" has become a word that consultants use to mean "resilient", and that is a small tragedy, because the whole point of Nassim Taleb's coining it was that resilient is not what he meant. A resilient system absorbs a shock and returns to where it was. An antifragile system ends up better than it was before. A shock absorber is resilient; a muscle under load is antifragile, because it rebuilds stronger than it started. That distin