# The Fool's Random Walk

1/ Survivorship Bias
We only see the successful (survivors), but not the many failures.
Example: Fund managers who make money for several consecutive years in the stock market may just be the few who survived by luck out of thousands.
We imitate them, thinking we've found the "secret," but it's actually a statistical illusion.
2/ Narrative Fallacy + Hindsight Bias
The brain dislikes randomness and loves to create causal stories.
Looking back, random events seem "inevitable"; but beforehand, they are impossible to predict.
Media and experts excel at this: using beautiful stories to explain market rises and falls, yet knowing nothing about the future.
3/ Luck vs Skill
Moderate success may come from skill and effort; extreme/wild success usually results from variance and luck.
In highly random fields (like trading, entrepreneurship, investing), short-term stellar performance is mostly noise, not signal.
4/ Monte Carlo Thinking (Monte Carlo / Alternative Histories)
Don't just look at actual outcomes; consider "all possible events that could have happened but didn't."
The quality of a decision depends on its expected value (probability × impact), not a single result.
Emotions, noise, and nonlinear human decision-making: people make decisions with emotion but explain them rationally afterward.
Media/information noise makes it harder for us to distinguish signal from noise.
Life is nonlinear: small things can lead to huge consequences (positive or negative).