People who are extremely successful as business executives or investors tend to think of themselves as more skilled and hard working than the average person. No doubt they are, but as you move towards the extremes of success, luck plays such an important role that the people who end up there are there almost entirely due to luck. No offense intended to any readers, just a matter of maths, as I will explain in this post.
Unfortunately, the fact that successful people believe their success comes mostly from their hard work has pretty bad consequences: they believe that if you are not successful it's your own fault and they fail to acknowledge that it's often largely determined by luck. Being poor becomes some sort of decision taken by people who just chose not to work hard enough. And who are the policy makers in our societies? Right, the successful people who were almost by definition very lucky (besides working hard, of course).
It's the same in finance or trading where the luck factor is probably even higher than in life in general.
Nice article, once again. This ↓ is amazing and needs constant reminding:
"If you earn more than £50,000 a year, you are in the top 1% of global income."
It is unbelievable how many of the people in the top percentiles underestimate the power of luck in their success and consistently overestimate their skills. I had also read somewhere that women are more realistic in their assessment of skills vs luck whereas most men think they are above average/top decile performers. This creates lot of problems once the results of the end-of-the-year performance assessments are issued.
If possible, could you share how you built the model and the simulation?
Perhaps there's a reason certain cultures put such a heavy emphasis on auspiciousness. For example, you've commented on this in a past post about Chinese CEO's and their behavior in the year of their sign. Maybe some cultures have realized through observation - over several thousand years - what you summarized in a 5-min read...? Thanks for the thought provoking post. And the reminder just how lucky I am!
Great post!
Unfortunately, the fact that successful people believe their success comes mostly from their hard work has pretty bad consequences: they believe that if you are not successful it's your own fault and they fail to acknowledge that it's often largely determined by luck. Being poor becomes some sort of decision taken by people who just chose not to work hard enough. And who are the policy makers in our societies? Right, the successful people who were almost by definition very lucky (besides working hard, of course).
It's the same in finance or trading where the luck factor is probably even higher than in life in general.
Nice article, once again. This ↓ is amazing and needs constant reminding:
"If you earn more than £50,000 a year, you are in the top 1% of global income."
It is unbelievable how many of the people in the top percentiles underestimate the power of luck in their success and consistently overestimate their skills. I had also read somewhere that women are more realistic in their assessment of skills vs luck whereas most men think they are above average/top decile performers. This creates lot of problems once the results of the end-of-the-year performance assessments are issued.
If possible, could you share how you built the model and the simulation?
Perhaps there's a reason certain cultures put such a heavy emphasis on auspiciousness. For example, you've commented on this in a past post about Chinese CEO's and their behavior in the year of their sign. Maybe some cultures have realized through observation - over several thousand years - what you summarized in a 5-min read...? Thanks for the thought provoking post. And the reminder just how lucky I am!