Probability & Statistics

The Drunkard's Walk: How Randomness Rules Our Lives

Amazon Guest Review: Stephen Hawking
Published in 1988, Stephen HawkingÂ’s A Brief History of Time became perhaps one of the unlikeliest bestsellers in history: a not-so-dumbed-down exploration of physics and the universe that occupied the London Sunday Times bestseller list for 237 weeks. Later successes include 1995Â’s A Briefer History of Time, The Universe in a Nutshell, and God Created the Integers: The Mathematical Breakthroughs that Changed History. Stephen Hawking is Lucasian Professor of Mathematics at the University of Cambridge.

In The DrunkardÂ’s Walk Leonard Mlodinow provides readers with a wonderfully readable guide to how the mathematical laws of randomness affect our lives. With insight he shows how the hallmarks of chance are apparent in the course of events all around us. The understanding of randomness has brought about profound changes in the way we view our surroundings, and our universe. I am pleased that Leonard has skillfully explained this important branch of mathematics. --Stephen Hawking

In this irreverent and illuminating book, acclaimed writer and scientist Leonard Mlodinow shows us how randomness, change, and probability reveal a tremendous amount about our daily lives, and how we misunderstand the significance of everything from a casual conversation to a major financial setback. As a result, successes and failures in life are often attributed to clear and obvious cases, when in actuality they are more profoundly influenced by chance.

The rise and fall of your favorite movie star of the most reviled CEO--in fact, of all our destinies--reflects as much as planning and innate abilities. Even the legendary Roger Maris, who beat Babe Ruth's single-season home run record, was in all likelihood not great but just lucky. And it might be shocking to realize that you are twice as likely to be killed in a car accident on your way to buying a lottery ticket than you are to win the lottery.

How could it have happened that a wine was given five out of five stars, the highest rating, in one journal and in another it was called the worst wine of the decade? Mlodinow vividly demonstrates how wine ratings, school grades, political polls, and many other things in daily life are less reliable than we believe. By showing us the true nature of change and revealing the psychological illusions that cause us to misjudge the world around us, Mlodinow gives fresh insight into what is really meaningful and how we can make decisions based on a deeper truth. From the classroom to the courtroom, from financial markets to supermarkets, from the doctor's office to the Oval Office, Mlodinow's insights will intrigue, awe, and inspire.

Offering readers not only a tour of randomness, chance, and probability but also a new way of looking at the world, this original, unexpected journey reminds us that much in our lives is about as predictable as the steps of a stumbling man fresh from a night at the bar.

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

If the prescriptions for getting rich that are outlined in books such as The Millionaire Next Door and Rich Dad Poor Dad are successful enough to make the books bestsellers, then one must ask, Why aren't there more millionaires? In Fooled by Randomness, Nassim Nicholas Taleb, a professional trader and mathematics professor, examines what randomness means in business and in life and why human beings are so prone to mistake dumb luck for consummate skill. This eccentric and highly personal exploration of the nature of randomness meanders from the court of Croesus and trading rooms in New York and London to Russian roulette, Monte Carlo engines, and the philosophy of Karl Popper. Part of what makes this book so good is Taleb's ability to make seemingly arcane mathematical concepts (at least to this reviewer) entirely relevant in evaluating and understanding everything from the stock market to the success of those millionaires cited in the aforementioned bestsellers. Here's an articulate, wise, and humorous meditation on the nature of success and failure that anyone who wants a little more of the former would do well to consider. Highly recommended. --Harry C. Edwards

Now in a striking new hardcover edition, Fooled by Randomness is the word-of-mouth sensation that will change the way you think about business and the world. Nassim Nicholas Taleb–veteran trader, renowned risk expert, polymathic scholar, erudite raconteur, and New York Times bestselling author of The Black Swan–has written a modern classic that turns on its head what we believe about luck and skill.

This book is about luck–or more precisely, about how we perceive and deal with luck in life and business. Set against the backdrop of the most conspicuous forum in which luck is mistaken for skill–the world of trading–Fooled by Randomness provides captivating insight into one of the least understood factors in all our lives. Writing in an entertaining narrative style, the author tackles major intellectual issues related to the underestimation of the influence of happenstance on our lives.

The book is populated with an array of characters, some of whom have grasped, in their own way, the significance of chance: the baseball legend Yogi Berra; the philosopher of knowledge Karl Popper; the ancient world’s wisest man, Solon; the modern financier George Soros; and the Greek voyager Odysseus. We also meet the fictional Nero, who seems to understand the role of randomness in his professional life but falls victim to his own superstitious foolishness.

However, the most recognizable character of all remains unnamed–the lucky fool who happens to be in the right place at the right time–he embodies the “survival of the least fit.” Such individuals attract devoted followers who believe in their guru’s insights and methods. But no one can replicate what is obtained by chance.

Are we capable of distinguishing the fortunate charlatan from the genuine visionary? Must we always try to uncover nonexistent messages in random events? It may be impossible to guard ourselves against the vagaries of the goddess Fortuna, but after reading Fooled by Randomness we can be a little better prepared.

PRAISE FOR FOOLED BY RANDOMNESS:

Named by Fortune One of the Smartest Books of All Time

A Financial Times Best Business Book of the Year

“[Fooled by Randomness] is to conventional Wall Street wisdom approximately what Martin Luther’s ninety-five theses were to the Catholic Church.”
–Malcolm Gladwell, author of Blink

“The book that rolled down Wall Street like a hand grenade.”
–Maggie Mahar, author of Bull! A History of the Boom, 1982—1999

“Fascinating . . . Taleb will grab you.”
–Peter L. Bernstein, author of Capital Ideas Evolving

“Recalls the best of scientist/essayists like Richard Dawkins . . . and Stephen Jay Gould.”
–Michael Schrage, author of Serious Play: How the World’s Best Companies Simulate to Innovate

“We need a book like this. . . . Fun to read, refreshingly independent-minded.”
–Robert J. Shiller, author of Irrational Exuberance

“Powerful . . . loaded with crackling little insights [and] extreme brilliance.”
–National Review

“If asked to name the five best books written about markets, Fooled by Randomness would be on my list.”
–Jack D. Schwager, author of Market Wizards: Interviews with Top Traders

“Excellent and thought-provoking . . . an entertaining book.”
–Financial Times

The Visual Display of Quantitative Information, 2nd edition

A timeless classic in how complex information should be presented graphically. The Strunk & White of visual design. Should occupy a place of honor--within arm's reach--of everyone attempting to understand or depict numerical data graphically. The design of the book is an exemplar of the principles it espouses: elegant typography and layout, and seamless integration of lucid text and perfectly chosen graphical examples. Very Highly Recommended.

A modern classic. Tufte teaches the fundamentals of graphics, charts, maps and tables. "A visual Strunk and White" (The Boston Globe). Includes 250 delightfullly entertaining illustrations, all beautifully printed.

Statistics for Dummies

In the numbers explosion all around us in our modern-day dealings, the buzzword is data, as in, “Do you have any data to support your claim?” “The data supported the original hypothesis that . . .” and “The data bear this out. . . .” But the field of statistics is not just about data. Statistics is the entire process involved in gathering evidence to answer questions about the world, in cases where that evidence happens to be numerical data.

Statistics For Dummies is for everyone who wants to sort through and evaluate the incredible amount of statistical information that comes to them on a daily basis. (You know the stuff: charts, graphs, tables, as well as headlines that talk about the results of the latest poll, survey, experiment, or other scientific study.) This book arms you with the ability to decipher and make important decisions about statistical results, being ever aware of the ways in which people can mislead you with statistics. Get the inside scoop on number-crunching nuances, plus insight into how you can

• Determine the odds
• Calculate a standard score
• Find the margin of error
• Recognize the impact of polls
• Establish criteria for a good survey
• Make informed decisions about experiments

This down-to-earth reference is chock-full of real examples from real sources that are relevant to your everyday life: from the latest medical breakthroughs, crime studies, and population trends to surveys on Internet dating, cell phone use, and the worst cars of the millennium. Statistics For Dummies departs from traditional statistics texts, references, supplement books, and study guides in the following ways:

• Practical and intuitive explanations of statistical concepts, ideas, techniques, formulas, and calculations.
• Clear and concise step-by-step procedures that intuitively explain how to work through statistics problems.
• Upfront and honest answers to your questions like, “What does this really mean?” and “When and how I will ever use this?”

Chances are, Statistics For Dummies will be your No. 1 resource for discovering how numerical data figures into your corner of the universe.

Cartoon Guide to Statistics

If you have ever looked for P-values by shopping at P mart, tried to watch the Bernoulli Trails on "People's Court," or think that the standard deviation is a criminal offense in six states, then you need The Cartoon Guide to Statistics to put you on the road to statistical literacy.

The Cartoon Guide to Statistics covers all the central ideas of modern statistics: the summary and display of data, probability in gambling and medicine, random variables, Bernoulli Trails, the Central Limit Theorem, hypothesis testing, confidence interval estimation, and much more--all explained in simple, clear, and yes, funny illustrations. Never again will you order the Poisson Distribution in a French restaurant!

How to Lie With Statistics

"There is terror in numbers," writes Darrell Huff in How to Lie with Statistics. And nowhere does this terror translate to blind acceptance of authority more than in the slippery world of averages, correlations, graphs, and trends. Huff sought to break through "the daze that follows the collision of statistics with the human mind" with this slim volume, first published in 1954. The book remains relevant as a wake-up call for people unaccustomed to examining the endless flow of numbers pouring from Wall Street, Madison Avenue, and everywhere else someone has an axe to grind, a point to prove, or a product to sell. "The secret language of statistics, so appealing in a fact-minded culture, is employed to sensationalize, inflate, confuse, and oversimplify," warns Huff.

Although many of the examples used in the book are charmingly dated, the cautions are timeless. Statistics are rife with opportunities for misuse, from "gee-whiz graphs" that add nonexistent drama to trends, to "results" detached from their method and meaning, to statistics' ultimate bugaboo--faulty cause-and-effect reasoning. Huff's tone is tolerant and amused, but no-nonsense. Like a lecturing father, he expects you to learn something useful from the book, and start applying it every day. Never be a sucker again, he cries!

Even if you can't find a source of demonstrable bias, allow yourself some degree of skepticism about the results as long as there is a possibility of bias somewhere. There always is.

Read How to Lie with Statistics. Whether you encounter statistics at work, at school, or in advertising, you'll remember its simple lessons. Don't be terrorized by numbers, Huff implores. "The fact is that, despite its mathematical base, statistics is as much an art as it is a science." --Therese Littleton

Darrell Huff runs the gamut of every popularly used type of statistic, probes such things as the sample study, the tabulation method, the interview technique, or the way the results are derived from the figures, and points up the countless number of dodges which are used to fool rather than inform.

The R Book

The high-level language of R is recognized as one of the most powerful and flexible statistical software environments, and is rapidly becoming the standard setting for quantitative analysis, statistics and graphics. R provides free access to unrivalled coverage and cutting-edge applications, enabling the user to apply numerous statistical methods ranging from simple regression to time series or multivariate analysis.

Building on the success of the author’s bestselling Statistics: An Introduction using R, The R Book is packed with worked examples, providing an all inclusive guide to R, ideal for novice and more accomplished users alike. The book assumes no background in statistics or computing and introduces the advantages of the R environment, detailing its applications in a wide range of disciplines.

• Provides the first comprehensive reference manual for the R language, including practical guidance and full coverage of the graphics facilities.
• Introduces all the statistical models covered by R, beginning with simple classical tests such as chi-square and t-test.
• Proceeds to examine more advance methods, from regression and analysis of variance, through to generalized linear models, generalized mixed models, time series, spatial statistics, multivariate statistics and much more.

The R Book is aimed at undergraduates, postgraduates and professionals in science, engineering and medicine. It is also ideal for students and professionals in statistics, economics, geography and the social sciences.

The Unfinished Game: Pascal, Fermat, and the Seventeenth-Century Letter that Made the World Modern

Visual Explanations: Images and Quantities, Evidence and Narrative

With Visual Explanations, Edward R. Tufte adds a third volume to his indispensable series on information display. The first, The Visual Display of Quantitative Information, which focuses on charts and graphs that display numerical information, virtually defined the field. The second, Envisioning Information, explores similar territory but with an emphasis on maps and cartography. Visual Explanations centers on dynamic data--information that changes over time. (Tufte has described the three books as being about, respectively, "pictures of numbers, pictures of nouns, and pictures of verbs.")

Like its predecessors, Visual Explanations is both intellectually stimulating and beautiful to behold. Tufte, a self-publisher, takes extraordinary pains with design and production. The book ranges through a variety of topics, including the explosion of the space shuttle Challenger (which could have been prevented, Tufte argues, by better information display on the part of the rocket's engineers), magic tricks, a cholera epidemic in 19th-century London, and the principle of using "the smallest effective difference" to display distinctions in data. Throughout, Tufte presents ideas with crystalline clarity and illustrates them in exquisitely rendered samples.

Describes design strategies - the proper arrangement in space and time of images, words, and numbers - for presenting information about motion, process, mechanism, cause, and effect. Examines the logic of depicting quantitative evidence.

Guesstimation: Solving the World's Problems on the Back of a Cocktail Napkin

Guesstimation is a book that unlocks the power of approximation--it's popular mathematics rounded to the nearest power of ten! The ability to estimate is an important skill in daily life. More and more leading businesses today use estimation questions in interviews to test applicants' abilities to think on their feet. Guesstimation enables anyone with basic math and science skills to estimate virtually anything--quickly--using plausible assumptions and elementary arithmetic.

Lawrence Weinstein and John Adam present an eclectic array of estimation problems that range from devilishly simple to quite sophisticated and from serious real-world concerns to downright silly ones. How long would it take a running faucet to fill the inverted dome of the Capitol? What is the total length of all the pickles consumed in the US in one year? What are the relative merits of internal-combustion and electric cars, of coal and nuclear energy? The problems are marvelously diverse, yet the skills to solve them are the same. The authors show how easy it is to derive useful ballpark estimates by breaking complex problems into simpler, more manageable ones--and how there can be many paths to the right answer. The book is written in a question-and-answer format with lots of hints along the way. It includes a handy appendix summarizing the few formulas and basic science concepts needed, and its small size and French-fold design make it conveniently portable. Illustrated with humorous pen-and-ink sketches, Guesstimation will delight popular-math enthusiasts and is ideal for the classroom.