That which fools you

“We know what happens to people who stay in the middle of the road. They get run over!”
― Aneurin Bevan

If you’re reading this periodical you’re likely familiar with the book “Fooled by Randomness” (by Nassim Nicholas Taleb) published in 2001. It became something of folklore artifact among finance professionals who started using the title as a colloquialism when referring to lucky people. The book more formally describes how sometimes we are all beneficiaries of random events. It was the first time many of us began thinking about randomness as an object, as opposed to just a word to describe variation – the idea has been gnawing at me ever since.

One of the areas discussed in the book is “beating the market”, which the author argues is a field of endeavour prone to the trickery of randomness.

Let’s try to simplify the task of beating the market – at a portfolio level, beating the market averages entails some combination of:

Read full article: https://www.mandg.co.za/insights/articlesreleases/that-which-fools-you/

October 16 2023 By Aadil Omar - M&G Investments