Luck vs. Risk
... and some advice for collectors in March 2023
Have you ever considered that risk and luck are simply opposite sides of the same coin? In an older post, I once wrote about a story shared in Morgan Housel's book "Psychology of Money" - I will share it here again to illustrate the point.
In 1968, Bill Gates was fortunate enough to attend Lakeside High School - one of the only schoolds in the world that had a computer. This was at a point in history when most schools couldn't even think of owning a computer.
Luck: In 1968, there were about ~300 million high-school-age students in the world, of which 8 million lived in the US. About 270,000 of them lived in Washington State and just 300 of them attended Lakeside School. So, Bill had literally one in a million chance of attending the high school with a computer.
Risk: Kent Evans was Bill Gates' close friend, and he shared Bill's business acumen and ambition. Kent would likely have become one of the founding partners at Microsoft along with Gates and Allen, had it not been for a fatal mountaineering accident just before graduating high school. The odds of dying during a mountaineering accident are also roughly one in a million.
So there you have it... Bill experienced one in a million luck by ending up the school which had a computer, and his mate Kent experienced one in a million risk by never realising what was almost a guaranteed success-story of one person's life.
Risk and luck are closely related; so what?
Well, the irony is in how we tend to experience the feelings we have, when we face these situations in our daily lives. Quite often, when people experience bad things, they attribute it to the associated risk - i.e. 'this bad thing happened due to forces outside of ones control'... fine. What about good times, and good fortune? This is where people forget the parts which are 'outside of ones control' - Since this is a watch related blog, look no further than the folks who bought watches pre-hype, and then attributed these purchases to their own skill in finding hidden gems, or those companies who had never seen hype and then proceeded to alienate old and loyal customers.
The reason we will always experience cycles, and have done throughout history, is best summed up by this paragraph:
“Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times.”
G. Michael Hopf, Those Who Remain
In the end, having good times will result in complacency which leads to the destruction of the good times, and the bad times inevitably drive panic-driven problem solving and ingenuity which ultimately lead to... that's right: good times!
Two main reasons to be optimistic
In the end, when things get bad enough, people find a way to fix them