Career in Finance

[RedJoker]

Wow, read a couple of excerpts and reviews I found. Believing that success in the market is completely dependent on luck is like believing poker is completely dependent on luck.

No one would try to claim that luck isn't a part of poker, just like I'm not going to claim luck isn't a part of the stock market, but claiming it's the main reason people succeed is a bit hard to swallow.

I haven't read the whole book so I'm not going to try and review it, but it sounds a bit like 'The Da Vinci Code', entertaining but flawed.

For an example of a counter argument read 'The Super Investors of Graham-and-Doddsville' by Warren Buffet. I found this on the thread 'Financial advisor tried to screw me today', the link was in a post by Buffet (thanks, good link).
http://www1.gsb.columbia.edu/valuein...ves/DOC032.PDF

If I missed the point of the book or your post, apologies, please advise.

[talentdeficit]

taleb doesn't think trading is 'completely dependent on luck'. he is a professional options trader. what he thinks is that luck is mistaken for skill and trends are inferred from random series. he presents some fairly compelling arguments. you should read the book.

[RedJoker]

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luck is mistaken for skill

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Yes, I can see how this could happen, most casual investors do not understand fundamentals or technicals, they are taking tips off people and gambling. Only looking at fundamentals would have the same effect,
good fundamentals + bad technicals = poor performance.

Technical analysis is a probability game, you see a stock bouncing off support, be it horizontal trendline, channel or moving average. You can then decide how strong that support is, has the price bounced off the 20 day MA before, how many times has the trendline been hit, etc. Then it is possible to look for divergences in On Balance Volume (OBV), Cash Flow Accumulation, etc.

By using this information it is possible to make the 'correct' decision to buy or not, based on probability. Whether the price rises or falls will be dependent on luck but, more often than not, correctly reading the indicators will result in profits. When the price does fall, using technical analysis can allow you to place stops intelligently and limit losses.

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he is a professional options trader.

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http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm

This profile is fairly long, have a look at chapter 3. Not the classic style of options trading, but if he makes money from it then well done. If you have read the whole profile then these are examples of two extremes of options trading, I personally think a compromise could be more profitable (i.e. selling covered calls, buying protective puts, etc.).

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trends are inferred from random series.

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This is debatable; the other extreme view is that stock prices move in a random fashion and also in a trending mode. Randomness we can do little about, but the trends are set by the 'elite' investors. It is the interpretation of fundamentals by these influential bodies (whether they be hedge fund operators or just 'smart guys') that dictates the start, length, size and end of any trend.

Whether one view is right or not is a matter of opinion. I will read the book. Just like I might read about Buddhism or Hinduism, I think it could give me a broader view on the world. I probably won't change my religion but it could be beneficial.