“The quality of a decision cannot be based solely on its outcome,” says Nassim Nicholas Taleb in Fooled by Randomness:
- uncertainty and luck play a larger role in our outcomes than we think
- a correlation between two types of events does not imply causation
- most of us have a poor understanding of statistics and the rare random event
- small differences in performance and ability can cause very large differences in the rewards or difficulties we obtain in life
- in general we are very irrational beings and are not very good at understanding the probabilities of everyday events rationally
What if we could find a way to make better decisions despite our inability to think probabilistically?
In How to Get Lucky: 13 techniques for discovering and taking advantage of life’s good breaks, Max Gunther says we can arrange to improve our outcomes by upgrading our chances. In other words, we can learn how to improve the quality of our luck.
Luck (noun): Events that influence our lives but are not of our making.
We deny the role of luck because: (1) we prefer to think we are in control of our plans and actions, (2) discussing luck diminishes our role, (3) our culture is dominated by the Work Ethic that says “we’re supposed to make our way in life by hard work, perseverance, fortitude,” etc.
Thus the first step to improve our luck is to acknowledge that it exists:
lucky people characteristically organize their lives in such a way that they are in a position to experience good luck and to avoid bad luck.
Gunther calls his thirteen techniques of lucky positioning.
1.) Making the luck / planning distinction – balancing activities to consider both
If you want to be a winner, you must stay keenly aware of the role luck plays in your life. When a desired outcome is brought about by luck, you must acknowledge that fact. Don’t try to tell yourself the outcome came because you were smart. Never confuse luck with planning.
When you clearly see how luck affects a given situation, then you become strongly aware that the situation is bound to change. it can change radically, rapidly, without warning, in unpredictable ways. You cannot know what the change will be or when it will happen, but you can be perfectly sure it will happen sooner or later. The one thing you cannot expect is the very thing the loser expects: continuity, a repetition of yesterday’s events.
Of course, many situations rely more on planning than luck, “the trick is to know what kind of situation you are in at any given time.” It’s thus important to understand the luck/planning ratio and to look outside as well as inside for an explanation of occurrences.
2.) Finding the fast flow – being around people and situations where things are happening
New York management consultant Eric Wachtel says: “This doesn’t mean you have to be one of those Personality Kids who know everyone in town. We can’t all be the life of the party. Some of us are quieter than others. But we can all go around with a look and attitude that says we want to be friendly. We can stay active. The worst thing you can do is withdraw from the network of friendships and acquaintanceships at home and at work. If you aren’t in the network, nobody is ever going to steer anything your way.”
In the business world as in the movies, the big breaks flow through contacts between people. Not necessarily close friendships, just contacts – sometimes tenuous ones.
This technique takes advantage of the “small-world phenomenon.” But to take advantage of a linked chain of people we need another necessary ingredient.
It is necessary for them to know what you would consider a lucky break.
3.) Risk spooning – taking a risk by dipping toes vs. diving in
Many people, especially of the plodder breed, hate a successful gambler. They hate him largely because they hate themselves for not having had the guts to take their own risks. He stands there rich, happy and having a world of fun; a living advertisement for what they might have been. Seeking acceptable reasons to dislike him, they cultivate the notion that gambling is, in some way, impure.
Thus, antirisk mentality keeps its dominance. Even the very biggest risk takers and the very luckiest gamblers are determined to show they are nothing of the kind.
It is essential to take risks. Examine the life of any lucky man or woman, and you are all but certain to find that he or she was willing, at some point, to take a risk. Without that willingness, hardly anything interesting is likely happening to you.
One trait of the consistently lucky is that they are able to assess risk-reward ratios even amid confusion and ambiguity.
The opposite of learning to take small risks for small gains is taking big risks for small gains. Not as common as those who avoid risk, those who dive in are also forgetting the role of luck.
4.) Run cutting – knowing when to cash in to stay ahead
“Don’t push your luck,” says the ancient maxim.
Always assume a given run will be short. You will always be right. The law of averages is heavily on your side.
One of the oldest and wrongest pieces of advice you hear around Wall Street is “Cut your losses but let your profits ride.” There is nothing wrong with the part about cutting losses. […] But the last half of the adage, the part about letting profits ride, is a recipe for bad luck.
Taleb addresses this specifically in Fooled by Randomness where he delves into why “a large selection of businessmen with outstanding track record will (at any point in time) be no better than randomly thrown darts.”
5.) Luck selection – being ready to cut losses
“Cut your losses,” they tell each other on Wall Street. Though few can do it well consistently, it is still good advice. And it doesn’t apply only to the stock market. It applied everywhere.
Lucky people have the knack for doing that, and it is one of the chief contributors to their good fortune. The knack is not easy to acquire.
One reason why luck selection is so difficult for most people is that it almost always involves the need to abandon part of an investment. The investment may be in the form of time, commitment, love, money, or something else. Whatever it is, you leave some of it behind when you discard a bad hand.
Another reason why luck selection is difficult for most is that it often requires a painful confession: “I was wrong.”
Learning to do this better requires a healthy dose of realism to help avoid unfounded optimism.
6.) The zigzag path – because luck is never linear
This doesn’t mean you should make frequent changes just for the sake of change itself. It means only that if a piece of potential good luck drifts your way, you should not summarily reject it simply because it doesn’t fit some predesigned plan.
Use [long term plans] for general guidance as long as they seem to be taking you where you want to go, but whatever you do, don’t get stuck with them. Throw them in the trash heap as soon as something better comes along.
Never be afraid to zigzag. […] You never know which direction your lucky breaks may come from. When they drift into reach, grab them.
7.) Constructive supernaturalism – being pragmatic while believing
The connection is that a supernatural belief, even a trivial and humorous one, helps people get lucky by helping them make otherwise impossible choices.
Life is full of situations in which you must choose among alternatives but lack any rational basis for choosing.
Many people — the unlucky — would just stand there paralyzed, unable to make the impossible choice. But we saw in our studies of the Third Technique, risk spooning, that getting lucky requires taking risks. We also saw that we rarely have all the facts we could wish for when embarking on a risk course, and sometimes we have no facts at all. This is where the lucky can make a supernatural belief pay off.
“A superstition won’t do you any harm as long as you don’t use it as a substitute for thinking,” said Charles Goren, the bridge master. […] “In fact, a superstition can help you. If it makes you feel good to sit facing in a certain direction, then probably you’ll play better. You’ll get up from the table with the feeling that you improved your luck.”
In bridge as in life we need to play the cards we are dealt.
8.) Worst-case analysis – being prepared for catastrophe
This means rejecting unfounded optimism and preparing to handle the worst.
“I know this situation can go wrong. Now I’ve got to ask how it can go wrong. What is the worst possible outcome? Or if there are two or more ‘worst’ outcomes, what are they? How can it go wrongest? And if the worst does happen, what will I do to save myself?”
Hope is not a strategy.
9.) The closed mouth – not speaking unless you absolutely must or you may regret it later
The trouble with too much talk is that it can constrict that valuable freedom and flexibility. Talk can tie you up, lock you into positions that seem right today but may be wrong tomorrow.
“I have often regretted my speech, but never my silence,” wrote Publilius Syrus, a Roman author of mimes and aphorisms who flourished in the first century B.C.
Silence doesn’t only protect you from getting locked into unwanted positions, and it doesn’t only keep you from revealing facts and feelings you may not want known. It has one great virtue. By avoiding excessive communication, lucky men and women are freed of the need to explain and justify actions to other people.
Other people’s opinions can tangle you and slow you disastrously.
This technique comes into play when we make promises. An example is telling the story of how something good happened after it has already taken place
10.) Recognizing a non-lesson – sometimes there is nothing to learn but that luck exists
There are experiences in life that seem to be lessons but aren’t. A noteworthy trait of the lucky is that they know what they can’t learn anything from.
For example, we cannot learned detailed lessons about the future by studying the past. Is the following true?
“Those who persistently fail to learn the lessons of history are doomed to repeat it.” This statement has been variously attributed to several nineteenth-century statesmen, who in turn may have plagiarized it from somebody still earlier. It’s clever, but is it true? Unfortunately, no, except in the most vague and general way.
History is the product of what billions of men and women are doing, thinking, and feeling at any given time. It is in constant flux. It is entirely unpredictable.
It can teach generalized lessons, some of them huge like “War is hell.” but it can’t teach us out to stay out of it. We can become better at telling whether an outcome is due to luck or something more reliable, like character, by looking for “visible links of cause and effect.”
11.) Accepting an unfair universe – dealing with this reality rather than pining over it
This will likely be the hardest of the thirteen techniques. We get what we get in life.
Just as it is misleading to blame yourself for bad luck, you also delude yourself when you come to a belief that you “deserve” good luck. You may well deserve it, but whether you will get it is a matter of – well, luck.
Shakespeare’s difficult but powerful play King Lear has offended many critics, including Charles Lamb, mainly because it is the story of a lot of people who deserve good luck but don’t get it.
12.) The juggling act – always be working Plans B, C, D, etc. as well
Luckier people are busier.
Lucky people always seem to have many ventures going on at the same time. Even at the height of success in a major venture such as a career, the lucky man or woman will usually have secondary ventures going or in preparation or under study – sometimes in bewildering variety.
This Twelfth Technique is closely allied with the Second: Fast Flow orientation, and the Sixth: the zigzag path.
The lucky life tends to look considerably more harried to others than it feels to the man or woman living it.
What counts is how you feel about the activity. It is the worries that often make us panic, not being in the midst of many activities. We can stabilize worries that may crop up by writing them down.
13.) Destiny pairing – constantly watching for connections that could create opportunity
A destiny partner is more than just a friend. A friend is someone you like and have fun with. The liking may even be profound enough to deserve the name love. But if a person doesn’t actively change the course of your life and the nature of your luck, then “friend” is the only right word.
How do you meet a destiny partner [someone who actively changes the course of your life]? It usually happens by blind luck […] That being so, the best way to boost your chances of meeting the person who will change your luck is to practice the Second Technique: Put yourself in the fast flow.
If your potential partner walks into your life — a person with whom you feel a quick, strong and positive reaction — don’t let that person simply walk back out. At least keep the newborn relationship alive while you assess it and see where it might go for a chance might not come around again.
While it is impossible to predict with absolute certainty when and how something good will happen to us, by practicing the thirteen techniques in How to Get Lucky consistently most of the time, we can get lucky and discover opportunities.
Gunther suggests a good way to start is to “ask yourself which technique has been most notably lacking in your approach to life.” Focus on identifying your main problem with luck. Then set out to learn how to gain an edge.
[image via Pixabay CC0 Public Domain]