Read of the Day: Why Greater Skill Leads to More Luck

Regular readers know I am a big Michael Mauboussin fan.  So, much of the press he’s been doing for his new book has been fantastic.  This outtake is no exception:

“Okay, you have gotten the memo on improving skill: 10,000 hours, hard work, deliberate practice, grit, and attentive teacher. We’ve all heard it. you also recognize that in many of life’s activities, the results you achieve combine skill and luck. no debate there. now, what if I told you that in many cases improving skill leads to results that rely more on luck? that’s right. Greater skill doesn’t decrease the dependence on luck, it increases it. If you have an interest in sports, business, or investing, this lesson is for you.”

Read the full piece here.  It’s short and worth the time….

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Johnny Evers

    ‘Luck is the residue of design.’
    – Branch Rickey

    ‘The harder I work, the luckier I get.’
    – Unknown.

  • Chattanooga

    I read the excerpt and the premise makes sense. I would agree that as skill increases, luck plays a larger role in differentiation. However, I feel like something important is left out in the skill/luck relationship– improving skill allows a larger range of conditions to be “lucky.” A larger and stronger skill set allows an individual or company to take advantage of a wider range of situations than the less skilled, and “luck” elements that otherwise would have not been available. Golf analogy makes sense to me– A 260 drive with the wind and a good bounce may put me in the middle of the fairway, where a 330 drive and the right hop could have me rolling onto the green.

  • John

    Football saying (soccer) ‘You have to be good, to be lucky’

  • Tom

    Chance favors the prepared. – Louis Pasteur

  • Valuation Consultant

    This is a fantastic read and the concept at the end I learned when I played poker for a living.

    The best poker players always focused on their decision making process. For example,

    I would lose hundreds of dollars and feel just fine, because I had made mathematically appropriate decision and forced another player into an unfavorable position, where they just got the card they needed.

    Other times I would win several hundred dollars and be cursing myself because I made an amatuer play that in the long run would not produce wins.

    Oddly enough once I mastered the concept and my emotions, the game became a lot less exciting because every hand was now in terms of net expected value, rather than a big exciting win or loss.

  • Ken

    There’s a book that has some of the same ideas written in the 1930’s. It’s called “Think and Grow Rich” by Napoleon Hill you can find it free in Google books. I have a paper copy given as a gift from my father when I was twelve. Read it.

  • http://www.dowtheoryinvestment.com Manuel Blay

    Wonderful book. A must read for anyone really interested in succeeding in life.

  • http://www.dowtheoryinvestment.com Manuel Blay

    “I’m a great believer in luck, and I find the harder I work, the more I have of it.”

    Thomas Jefferson

  • JJ

    ‘The harder I work, the luckier I get.’
    – Gary Player (SA Golfing legend, said after he hit a ball (into the wrong direction because there was an obstacle in the way) against a rock so that it would bounce back onto the green. Ball ended up in the hole…

  • Greg

    Lucky is our term for a random outcome which appears to be beneficial. Un lucky is when the random outcome appears negative. We can control how something appears by our attitude. What some people call unlucky another will realize is lucky to them, AND they could all be correct.

    We are terrible at doing probabilities so we dont really know whether something “should have” or “should not have” happened.

    Interesting story.

    It was studied that over 65% of golf balls headed towards the woods( below tree top level) will bounce toward the golf course and stay in play. This is simply because of the shape of a tree trunk and the directions that golf balls approach them. There is more surface that the ball can strike that will propel it towards the course.

    So its not luck when a ball heads towards the course its physics and probabilities.

  • Old Dog

    This is exactly what Jack Bogle was referring to when he revealed the best investment advice he ever got – “Nobody knows nothing.”

  • Dave Dell

    Might not be exact quotes but:

    “I recruit luck.”, Barry Switzer

    “Luck comes to those who are prepared to take advantage of the opportunity.” Robert Heinlein

    “You are where you are today based on your efforts six years ago.” Unknown (by me at least)

  • ES

    And of course ” God helps those who help themselves”.

  • William Bedloe

    One of my favorites is one Commonly attributed to JW Von Goethe, but may actually be a quote adapted from a book by William Hutchinson Murray called The Scottish Himalayan Expedition: “Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative and creation, there is one elementary truth the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one’s favor all manner of unforeseen incidents, meetings and material assistance which no man could have dreamed would have come his way. Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it. Begin it now!”

  • Cowpoke

    Excellent Book, I just gave it to my son a few weeks ago, along with Dale Carnegie’s How to Win Friends & Influence People and The Power of Positive Thinking By Norman Vincent Peale.

    Timeless Classics

  • Cowpoke
  • Cowpoke

    OH Heck, I forgot about the Play How to Succeed in Business Without Really Trying.
    That play fits perfect with this thread.