One of my favourite finance books was given to me by Mark Carnegie after a meeting where we discussed markets and valuation. That book is called The (Mis)behavior of Markets, and its author was none other than Benoit Mandelbrot – the father of fractal theory. Mandlebrot’s idea is that the traditional normal distribution does not properly capture empirical and “real world” distributions, and there are other forms of randomness that can be used to model extreme changes in risk and randomness. A somewhat humorous example of this failure of the normal distribution is the once-in-a-hundred-year flood, which we all regularly joke seems to happen every couple of years. Below, I discuss Nassim Taleb's 'Fooled by Randomness, and a major risk facing markets today.