Welcome back.
Nice to see you. Thanks again for being here.
I've always been really interested in the topic of luck.
For a few reasons. Luck plays such a big role in the world.
A few people want to talk about it.
And I think it's really clear why this happens.
If I say you got lucky in whatever you did, I look jealous and bitter and a little bit mean.
And if I tell myself that I got lucky, I feel diminished in whatever I accomplished.
I think it's like this for almost everyone.
Luck is everywhere. Particularly the very successful outcomes that we pay the most attention to.
But no one wants to talk about it.
So maybe a better way to frame luck is just by asking, what is not repeatable?
Lucky implies a random event that you or anyone else could not see coming.
But asking what isn't repeatable is very different.
Did Jeff Bezos get lucky when he created Amazon?
Well, not in the same way that a lottery winner got lucky, of course.
It's different than that.
Jeff Bezos was visionary and ambitious and savvy to a degree that you only see maybe a few times per century.
But could he, could Jeff Bezos starting today without any money or name recognition?
Could he create a new multi-trillion dollar business from scratch?
I think the answer is probably not.
Which is not to say anything negative about Jeff Bezos, of course.
But there are so many things that helped Amazon become what it is today that cannot be replicated.
The growth of the internet, market conditions, old competitors, politics, regulations, all of these things that you can't replicate in the same way that they happened over the last 30 years.
Jeff Bezos is enormously skilled in a way that is obviously clearly not luck.
But a lot of what he did was not repeatable, and those points are not contradictory.
But it's so important to know the difference between the two when you're attempting to learn from someone.
You want to try to emulate skills that are repeatable.
Attempting to copy the parts of someone's success that are not repeatable is the equivalent of a 56-year-old dressing like a teenager and expecting to be cool.
Look, it may have worked at one time, but it's not going to work for you now, okay?
There's a law in evolution called Dolos Law of Ereversibility.
It basically says that once a species loses a trait, it will never gain that trait back because the path that gave it that trait in the first place was so complicated that it cannot and never will be replicated.
So say an animal has horns, and then it evolves to lose those horns.
The odds it will ever evolve to regain those horns are basically zero, statistically impossible.
Because the path that originally gave it horns to begin with was so complex, millions of years of selection under specific environmental and competitive conditions that won't be repeated in the future.
Now you can't call a trait that was gained from evolution luck.
They came about because of very specific forces.
You just can't ever rely on those forces, repeating themselves exactly as they did in the past.
And a lot of things work like that.
In business and investing, you want to learn the big lessons about why things behave the way they do without ever assuming that the past is a direct guide to the future.
Because it is not. Most of the details that happened in the past, the way that they went down, the characters and figures that played a role in it are not repeatable.
History is the study of change that I think is ironically used as a map of the future.
Jason's Waige of the Wall Street Journal once talked about what happens when you try to learn a very specific, non-repeatable lesson when in fact a broader and very repeatable lesson is what you needed to pay attention to.
He says quote, after the dot com crash, the lesson that people learned from that was not I should never speculate on overvalued financial assets.
The lesson they learned was I should never speculate on internet stocks.
And so the same people who lost 90% or more of their money, day trading internet stocks, ended up flipping homes in the mid-2000s and getting wiped out doing that.
It's very dangerous to learn a narrow lesson.
Like almost everything Jason writes, I love that.
And the great thing when you ask is this repeatable is that you start to focus on things that you and I, ordinary laypeople, have a chance of repeating ourselves.
So you can learn a lot from Warren Buffett's patience and endurance.
But you cannot replicate the market environment that he had in the 1950s.
So be very careful trying to copy specific strategies that he used back then.
In the same way, you can learn so much about business from John DeRoccafeller about things like the importance of controlling your distribution.
But you cannot replicate the 20th century legal system that allowed Rockefeller to steam roll and destroy his competitors.
So don't get too carried away when you're learning about those things.
Elon Musk can teach you a lot about risk taking and branding, but much less about competing in the auto business.
And Jeff Bezos himself can teach you so much about management and long-term thinking, but much less about e-commerce and cloud computing.
You just have to figure out the skills that are repeatable versus what is not.
And maybe the way to get luckier is to find what is repeatable.
That's all for this episode.
By the way, if you're looking for another podcast to listen to, check out the rundown by my friends at public.com.
It's a financial news podcast that you can listen to in just five minutes.
Orton Sweet, just like my own podcast.
In the rundown, you'll learn about the stocks that are making the biggest moves this week.
You get caught up on what happened in the global economy and figure out what's happening in the wild, always volatile world of crypto.
Maybe you'll even learn why your co-workers crypto advice is probably terrible and you shouldn't listen to it.
Each episode of the rundown is just five minutes and you'll walk away in the loop of understanding everything that's happening in the finance and economic world.
Check it out. I hope you enjoy it.
And thanks again for listening.
