WASHINGTON -- Heard the one about the monkey and the typewriter?

"If one puts an infinite number of monkeys in front of (strongly built) typewriters and lets them clap away, there is a certainty that one of them (will) come out with an exact version of the Iliad," writes Nassim Nicholas Taleb in a new book, "Fooled by Randomness."

The monkey typist story is an old one, and the key word is "infinite." But Taleb takes this hoary tale a step further. "Now that we have found that hero among monkeys, would any reader invest his life savings on a bet that the monkey would write 'The Odyssey' next?"

Taleb's point is that the past frequently tells us nothing at all about the future, even though many of us believe it does and make investments accordingly. "Think about the monkey showing up at your door with his impressive past performance. Hey, he wrote 'The Iliad.' "

The lesson here for investors is powerful and frightening. How much can you rely on the track records of investment advisers, mutual fund managers, newspaper columnists or even the market as a whole in making decisions about your investment portfolio? Not nearly as much as you probably think.

Taleb's argument is that people are often tricked, mainly by the architecture of their own brains, into thinking that things that happen at random are actually happening by design.

Taleb's book, which is full not only of infuriating meanderings and off-putting self-importance but also of extreme brilliance, changed the way I think about investing.

"Fooled by Randomness" is loaded with crackling little insights, but the best one is that what looks like skill is often plain old luck, so beware of investment geniuses.

"When people buy stocks," wrote Meir Statman, a finance professor at the Santa Clara University and one of the leading experts on markets, "they think they are playing a game of skill. When the stock goes down rather than up, they think they have lost their knack. But they should take heart. All they have lost is luck. And next time, when the stock goes up, they should remember that was luck, too."

My own view is that it's not all luck, but it's mainly luck. Much of what investors do in picking stocks -- the research, the listening, the talking, the reading -- is nothing more than wheel-spinning. It wastes time and gets them nowhere special.

For example, investors and analysts are obsessed with reading tea leaves; that is, they perceive patterns that appear compelling but are actually meaningless. Burton Malkiel, the Princeton economist, disputed the value of "technical analysis" trying to determine where the price of a stock will go in the future based on a graph of where it's been in the past in his classic book "A Random Walk Down Wall Street."

He generated graphs based on the results of coin flips and showed how they looked like the "head and shoulders" patterns and other fetishes of chartists, as such analysts are called. Academic research has judged technical analysis useless.

Malkiel, however, shows clearly that the value of stocks in the future often depends on unknowable events. Consider the relatively stable utilities industry. In the 1970s, utilities were deeply affected by suddenly higher oil prices; in the 1980s, by the Three Mile Island nuclear incident; in the 1990s, by deregulation; in the 2000s by the Enron scandal.

"Analysts failed to predict these random events (that's why they're random), and earnings for the companies suffered," wrote Richard McCaffery on the Motley Fool Web (www.fool.com). "Random events are an intricate part of life in the business world, and these events make it very difficult for investors, whether professionals or not, to predict earnings and find winning investments."

So what does all this mean in practical terms? Can the average investor distinguish between luck and skill? Probably not. The lessons I draw from Taleb are:

1. If you're doing well in the market, don't get carried away by hubris;

2. Don't be reluctant to invest purely by instinct since fundamental analysis is not all it's cracked up to be;

3. Pay little attention to the day-to-day movements of stocks and news about companies;

4. Don't expect mutual funds to outperform their peers simply because they have done well in the recent past

5. Put money in low-cost index funds or broadly diversified portfolios.