The more I practice, the luckier I get.
How would you know if someone is successful because of skill or luck?
Depends on what's the pursuit that we are trying to evaluate.
Most human endeavours lie somewhere on this luck vs. skill spectrum.
Some areas such as a casino or a Russian roulette are pure luck driven.
While others such as elite professional sport would skew more towards skill.
In investing (especially equity) most people who are successful in the long run, acknowledge some or in most cases a meaningful role of luck.
Charlie Munger opines that.
To get what you want, you have to deserve what you want. The world is not yet a crazy enough place to reward a whole bunch of undeserving people.
Naval Ravikant on the other 👏 talks about four kinds of luck.
- Blind luck – “dumb luck”
- Luck that comes to you through persistence – “fortune favors the bold”
- Spotted luck – “chance favors the prepared mind”
- Luck that finds you - luck by design - Destiny
Our normal tendency is to attribute our success to skill or effort and our failures to luck or karma or what have you...
Is there a way to tell?
Turns out, there is!
In fact, Michael Mauboussin in his excellent 📖 Untangling Skill and Luck in Business, Sports, and Investing digs deeper into this very question and provides some interesting answers.
If you would like to learn more before reading the book, here's a talk he gave at Google elucidating some of the ideas in the 📖
One of the heuristics to determine if it is luck or skill that made someone successful is to see if you can fail on purpose.
If you can, then the role of skill is significant.
If you ask me, I would any day prefer to be lucky over skilled. As you would need some amount of luck even for the skill to play out as my wife rightly pointed out!
What about you? Would you rather be lucky or skilled?