How to increase your luck surface area (2010)

https://www.codusoperandi.com/posts/increasing-your-luck-surface-area

by deadcoder0904 • 5 years ago

353 200 5 years ago

brudgers2• 5 years ago

A theory that only works for people who are lucky enough to be surrounded by supportive people.

Some people have the misfortune to know people whose usual reaction is throwing sand in other people's gears. People who crap on other people's plans.

Just as good luck can compound, so can bad luck.

umvi• 5 years ago

A theory that only works for people who are lucky enough to be surrounded by supportive people.

It's possible to change who surrounds you. By socializing in new bubbles, making new friends, or just plain moving to a new location.

Shared404• 5 years ago

With enough bad luck, it's possibly to never have the opportunity to make those changes.

TheCowboy• 5 years ago

This is also possible, but it's also something where luck, personal resources, and experience play a role in determining how successful such changes will be.

brudgers2• 5 years ago

Whether or not that works is a matter of luck. Part of that luck is the recognition that the people close are unsupportive and knowledge that there are supportive people.

If someone has had the bad luck of growing up surrounded by unsupportive people, the recognition and knowledge don't occur naturally.

The problem of long term socialization with assholes is that a person tends to be socialized to being an asshole. That facilitates new friendships with new assholes more than it facilitates new friendships with non-assholes. It facilitates socializing in asshole rich bubbles...etc.

mish33• 5 years ago

Bad luck may follow the same formula: what you did wrong times how many people that affected.

sh490• 5 years ago

By increasing the size of your exposure. Ideally, diversifying exposure to opportunities/people/circles/etc.

This should be done concurrently with (if not as a result of) increasing quality and amount of your output. By the time you meet the 'right' person, are in the 'right circle', you'll have something to show. Otherwise, it's wasted opportunity, and hence wasted luck.

hntrader• 5 years ago

That's what the article says:

Luck = Doing * Telling

KineticLensman• 5 years ago

I'll stick with the proverbial Seneca: “Luck is what happens when preparation meets opportunity.”

Which is actually a generalization of the author's (relatively narrow) thesis where 'opportunity' depends primarily on the people that you meet and the 'preparation' is being passionate about something.

Closi2• 5 years ago

I think this is roughly the same thesis with different words - preparation = doing and telling = creating opportunities.

dade_• 5 years ago

Except Seneca said this 2000 years ago and used far fewer words than this blog post.

king_magic• 5 years ago

A previous manager of mine told me that same quote years ago. It’s never left me, and has always been a valuable way to look at the world.

emrah• 5 years ago

That's a nice quote but I wonder if something was lost in translation. "Preparation" seems too "point-in-time", like you do X, Y, Z and you are ready.. which doesn't seem right.

Opportunities in life are moving targets, there is no way to be "prepared" at any point in time. I think a better way to say this would be "Luck is what happens when momentum meets opportunity".

So you are engaged with something (like running a SaaS company), something happens (like one of your large competitors goes out of business) and your activities up to that point put you in a spot that makes it possible to benefit from that event.

colanderman• 5 years ago

(2010). There's since been much discussion of this post here, and generalization to other aspects of life. E.g. I remember the example, if your goal is to date a model, start hanging out in places (cafes/bars) where models hang out.

choxi• 5 years ago

Product-market fit often has an element of luck, otherwise someone else would have found the opportunity already. So this is really good advice for anyone working on a startup, it's sort of another way of saying the classic YC advice that you should be "building things and talking to customers".

I really like this mental model, one thing I've noticed about my failed startup attempts is that I did a lot of "doing" but not "telling".

Closi2• 5 years ago

I think that’s a slightly different thesis - I think this one is more about ‘lucky breaks’ I.e. Microsoft selling its first basic compiler, vs finding your product market fit.

kharak2• 5 years ago

Being passionate about something for a long time (not just a couple of hours or weeks) seems to be a rare quality. Too bad for those who lack it, as it seems to be a requirement for success in everything. There are so many posts that try to tell you how to get the most out of your passion, I haven't seen one that explains the origin of passion or whether it is possible to become passionate.

analyst74• 5 years ago

Opposite of passion is contentment, which is also very desirable for many.

You just can't have both, because with a burning passion, comes a sense of imperfection and constant struggle to get better but never enough, or worse, fear of decay and irrelevance, an inevitable outcome as one ages.

nicbou2• 5 years ago

You can be passionate and content.

There are plenty of passionate artists, athletes and engineers who don't care about going pro, getting famous or changing the world.

For example, I'm passionate about software development, but I make simple things that don't matter. I'm passionate about cooking, but only for myself and the occasional guest. I'm also passionate about the website I live from, but I don't worry much about its growth.

I like to build stuff, but I don't want an audience or its recognition. I don't want users nor money. I just do it because it's nice.

mettamage• 5 years ago

What also isn't talked about:

__Burnout and Passions__

Here's a comparison: I once build a computer graphics engine in 2 weeks and a few years prior I played WoW for 2 weeks.

In both cases I spent between 16 to 20 hours per day on it. I got ill, had an angry girlfriend (in the computer graphics timeline), and I did everything I wanted to do (it was done).

__Passions and Interests__

I have a genuine interest in security. Once every year I become super passionate about hacking/red teaming for 2 months. I'm like a cat in heat or something, but then with security. I play hackthebox, I follow security courses and clock 12 to 16 hours per day on it, 7 days per week. Converted to working days, that is around 5 months of working days.

Yet, people mistake this as me having a passion for it. I can assure you, if the article is technical and I'm in the other 10 months, I'd need to apply quite some self-control and discipline to be able to read it.

__It's not always the subject__

I have this weird trait. Whatever my friends are interested in, can become a passion of mine. One requirement: I need to do it with them. If I do and I'm having a positive interaction with my friend, then I'm passionate about it. However, I know it's not the subject, it's simply being with that friend. I figured it out by first noticing this in video games. It turns out I don't care about video games, I simply care playing them with friends. It turns out, it's true for all activities I have an interest in.

__Passions and linking to other topics__

I love imagining music. It's a compulsion I had since I was 4. Because of this, I quite like making music as well. However, I also like not being poor. I've seen quite a few poor musicians, so I've never focused too much on my music creation and I think that's quite a sad fact about my life.

But! It turns out, that (web) app development for things that I find cool or useful scratches exactly the same itch. So that means that passions are wider than your interest alone. It turns out that passions might be able to transfer to other passions if they have the same properties.

Unfortunately, I don't feel passionate about (web) app development for corporations. This is mostly because a lot of the creative freedom isn't there, but when you make your own stuff it is there.

---

My 2 cents.

asimjalis• 5 years ago

I found your introspection valuable. I work as a presales engineer. When a customer has a problem and is stuck on something I become obsessed with it. But as soon as we have a fix or a workaround I lose interest in the area. This makes it hard to generalize the solution or publish it as a blog post.

m463• 5 years ago

"stop starting and start finishing"

On the other hand, we have so little time here. Who's to say whether narrow and deep is always more rewarding than broad and shallow?

You know, be mindful of doing the wrong thing well instead of the right thing poorly.

So learn to forgive ourselves for pursuing things that fizzle out or lose our interest. Leave space to preserve passion to the benefit of our health and happiness. More interests might also mean more opportunities to align shared passions with others.

renjimen• 5 years ago

Exactly! Few people espouse the downsides of being very passionate about something. It can often lead to missed opportunities and a narrow view of life. Not to say it can't be balanced, but a lot of very passionate people I've met are difficult to arrange things with or have neglected other parts of their life, such as learning to be organised or social skills.

pototo6665• 5 years ago

I haven't seen one that explains the origin of passion or whether it is possible to become passionate.

---

As Bezos said, you can't choose your passion, your passion chooses you.

etrautmann• 5 years ago

I disagree - passion can emerge after you’re much deeper into something. I liked building things but wasn’t passionate about engineering until my last year in undergrad. It took 3-4 years of grinding away uncertainly until I had enough skill to make it really fun and interesting. That knowledge snowballs.

Plenty of people are passionate about work which appears arcane. Few of them started with that.

rmelhem• 5 years ago

yep, i suddenly felt in love with music after my dad passed away - was in college studying materials engineering, and made a living out of music for 6 years (until the pandemics)

OrbitRock• 5 years ago

Scott Alexander’s the lottery of fascinations is a good read in this area: https://slatestarcodex.com/2013/06/30/the-lottery-of-fascina...

vincentmarle• 5 years ago

Being passionate about something for a long time ... seems to be a requirement for success in everything.

There’s a book that attempts to debunk this myth by making the case that generalists are typically more successful: https://www.gatesnotes.com/Books/Range

mojoe• 5 years ago

There's a difference between being passionate about a skillset and passionate about a field. For instance, I can be passionate about renewable energy and still be a generalist in terms of my day-to-day work.

EGreg• 5 years ago

Here is a comment:

Passion is a direct result of three things:

1. Awareness of a major problem that affects a lot of people

2. Becoming convinced of a certain solution that is currently not being implemented

3. Having your needs met for a long time, also known as financial freedom

To the extent you find people with 1 and 3, you can recruit them with 2.

abdullahkhalids• 5 years ago

I think you are switching the order of things. Passion often comes after doing something for a long time. The trick is that you have to mindfully analyze what parts you enjoy about the thing, and how you can enjoy or tolerate the parts you don't like.

alexashka• 5 years ago

Too bad for those who lack it, as it seems to be a requirement for success in everything.

There is no shortage of evidence to the contrary.

Passion talk is out there because it works in fooling people who don't have what it takes to be 0.001%, into believing they might, long enough to buy self improvement seminars/tapes/programs/etc.

Here is an easy way to get success - define success to mean something realistic and that would work for you. For most people, that's working a stable job, finding a husband/wife, having a couple of children and living in a safe neighbourhood. That's completely attainable for most people and it doesn't require any passion - a little planning and perseverance will do just fine.

christiansakai• 5 years ago

Jack of all trades here. I'm fine not being rich because of doing jack of all trades.

hwestiii• 5 years ago

Louis Pasteur figured this out in the 19th century. “Chance favors the prepared mind.”

mrandish• 5 years ago

The concept in the post is something I've observed in my own life and the lives of others. The article highlights that it's just not "doing" but doing something you are "passionate" about. I get a little stuck on that word because it evokes the "follow your passions" type of advice which can be taken the wrong way. Here I think the key is it's not just "doing" anything but rather something you care enough about to at least try to do well. In other words, you're putting attention and energy into it. This tends to be something others notice because it's authentic.

The other thing which seems to elevate outcomes in this context is not just "telling" people as measured by quantity but also by quality. Just sharing with large numbers of people may work but trying to share with those who also "do" things will reach those most likely to care about what you're doing, the way you're doing it or even just that you're "doing" things with genuine personal investment. When I see that, it usually stands out and I'm much more likely to want to engage with that person.

Invictus03• 5 years ago

There is no such thing as being lucky. It is just a matter of perspective. Luck is what happens when people spontaneously feel grateful.

OgAstorga• 5 years ago

Isn't a good hand in Texa's considered luck? Isn't being invited by M. Zuckerberg to help code a side project named thefacebook considered luck (whether or not you've accepted)?

Invictus03• 5 years ago

These are just circumstances that present themselves to you. They are no more or less lucky than waking up in the morning, seeing the sun shine, or having clean water to drink. It's a matter of perspective.

freshpots2• 5 years ago

Check this out, your opinion may change: https://www.youtube.com/watch?v=3LopI4YeC4I (12:03)

adnzzzzZ• 5 years ago

Check this out, your opinion may change: https://www.youtube.com/watch?v=iZM_JmZdqCw (54:01)

alfiedotwtf• 5 years ago

I think from your comment, you didn't the article

Invictus03• 5 years ago

You would be wrong, please assume good faith per the HN guidelines.

yalogin• 5 years ago

This is only tangentially related to the article.

I keep hearing a lot of “put effort into what you are passionate about”. One thing I found is passion is also generated. It happened to be many times, I force myself to work and n something for some time and I automatically see the beauty/challenge in it and develop the motivation without the need to push. I want to hear other’s opinions on it.

xyzelement• 5 years ago

An Israeli entrepreneur once introduced me to the idea of "the adjacent possible" - meaning, as you progress to "the next point" - the possibilities connected to that point are available to you.

Somewhere else, I read the definition of "intelligence" as that which maximizes its future options.

I think both things hit at the same idea of "surface area of luck". We think of luck as "a good opportunity you can take advantage of" - if you become someone who can take advantage of more opportunities, you become luckier.

Some of the strategies that helped me (none of them are intentional):

- Never passing up an opportunity to learn - whether new skill or new degree or new industry or a new personal challenge. As Steve Jobs said, sometimes you don't learn until later how the dots connect to what you eventually do.

- Diversifying my experience. EG: 13~ years ago I was a "senior software developer." Since then, I had been a "development manager", a "product manager" and also for a time a "senior software developer" again. When I lost my job a few months ago, I was able to look at opportunities along all 3 of these job tracks, whereas if I had stayed in the single track, I'd have 1/3 the options.

- Ditto to industries. Until now, everything I did was in finance, so I intentionally found a role outside of finance, because I could always go back to it if I need to, but now I am proving to myself (and to my resume) that I can cross industries and work anywhere. That again increases. your surface area.

- Have a diverse network, for example find a way to connect with young talented people where you are (first job, university) because they will disperse throughout the world and may do cool things and you may want to do those things with them, or they can just help you. It has been amazing how much people that I had barely connected with when we worked together were willing to help when I needed a referral/advice/whatever.

- I'll call this one out separately: help people. Make time to mentor people, help them get jobs, put in a good word, whatever. Not everyone will "pay you back" but it doesn't matter, the reputation of "xyzelement's a good guy, he's generally helpful" means the world, especially as you become more senior.

- Be the dumbest guy in the room. You grow more when being surrounded by those who can challenge you uncomfortably. Pick the right room. Comfort = death.

- Troubleshoot your mind. Most of us are held back by stupid hangups. For example, most developers I know could be overall way more successful if they got over shyness/fear of public speaking. Figure out why you fear whatever you fear, and work to get over it. Imagine you didn't go for your dream job because it has some minute attribute that you pointlessly fear.

- Check your language. If you find that "they" are responsible for what's happening to you, you have given away all your power. Figure out how "you" are responsible for where you and and what opportunities "you" have, and then own it and act.

binbag• 5 years ago

Do things you're keen on? Deep.

sigmaprimus• 5 years ago

I'm not sure the variable of how many other people I tell about my passion has an effect of its success.

I have several passions and many ventures based on them.

I believe "A farmer has as much luck as he has seeds in the ground" regardless of how many people are involved. I my case "seeds" are ventures that I start based on my passions, many will wither but some will do well and a few do great.

The great ones seem to draw others to get involved even when I try to keep them low key.

pototo6665• 5 years ago

I like this idea. It's simple and elegant.

I am accidentally practising it.

I make games. I tried and failed to get investement and partners.

So I am making games alone. Last week I started streaming my daily work. I stream my the other screen display, such that I can decide what to show and what to hide.

I told myself, streaming cost me no money and I might attract attention of partners and investors. Nothing unfold yet. But I would continue.

_jjkk• 5 years ago

I have seen multiple indie developers successfully begin marketing on their unfinished / unremarkable prototype far in advance. In fact some of them get so popular they pivot into "I make videos of myself making games" instead of "I make games"

I would recommend doubling up exposure by recording your streams, then cutting up the best clips and releasing them as Youtube videos. Also posting these Youtube videos to Reddit when possible (obviously following their self-promotion rules)

Here is an example channel: https://www.youtube.com/watch?v=YEhOhNgoZHI

pototo6665• 5 years ago

Recoding stream is a good idea! Thanks for this concrete advice and example :))

williamonill• 5 years ago

I think this equation completely forgets to take into account the power of the people you tell about your ideas. If you are studying in Stanford and can literally walk into the office of professor X and tell him about your ideas (which worked pretty well for Elizabeth Holmes and professor Channing Robertson but that's a different story) you have an enormous competitive advantage. And if you have a Stanford professor on your side, it's pretty easy to open doors to other influential people.

On the other hand, if you tell your idea some stranger on the Internet... chances are much lower that you will find the right people.

motohagiography2• 5 years ago

Taleb talked about this with his recommendation to get exposure to randomness that has asymmetric upside, and is analogous to luck is preparedness meeting opportunity. What I like about the OP's model is it also explains the asymmetry of social media where people do very little at all and talk about is a lot because the kind of non-linear success we are aiming for is a function of exposure.

When you have wealth of any kind, you naturally orient to getting exposure to opportunity for diversified parts of it, but when you have a scarcity view, your decisions are necessarily all/nothing, and it even becomes a class culture thing. It's circumstances, but also learned attitude.

Related, I'm sympathetic to what's happening with GME and WSB, if a young persons net worth is four digits, it seems insane not to gamble it on options, as the housing bubble has cut off the last way for working people to get leverage. GME may mark the inflection point in the markets where young people realize it's their best or even only opportunity for leverage, and meme stocks are going to be the new normal because the economy doesn't provide anything better to invest in for under $50k. (that is, unless remote work makes distant property viable to live in)

Nevermark2• 5 years ago

I hate to say “Bitcoin” because of its high risk, short track record, volatility, faddish aura, etc, but:

I believe it’s filling a gap beyond being a better gold-like asset. Better gold = digitally portable, 24 hr liquidity, digital literate friendly, fixed cap, transactions (even with its limits), decentralized control, etc.

But the solidly fixed cap is more profound than I think most people recognize. Potentially, once Bitcoin finds its “true” price, it will continue to grow in value in proportion to all wealth in the economy - over the long run. So it won’t just be a hedge against downturns, but eventually a semi-stable way of sharing in overall increasing wealth in the economy.

I don’t know of another instrument that anyone can easily buy that might track (over the long run) with global wealth as apposed to particular entities or particular aspects of the economy.

So in that sense, anyone can participate in overall wealth growth. A very useful new tool!

OF COURSE, this is SPECULATION on my part. But I think the idea of a total global wealth correlated asset is new and useful.

dehrmann5• 5 years ago

fixed cap

This makes it more like a collectable (say, baseball cards) than a currency. The number is capped and some will be lost. It has value as long as people are interested in it--scarcity does not imply value.

It also has a short track record and could run into issues if miners collude, there's a DDoS attack, or someone with a lot of resources reverses transactions, hurting confidence in it.

punnerud• 5 years ago

I love how Reddit (and HN) enable fast sharing, fact checking of information and lifting ideas.

When it comes to increase luck surface I think Clubhouse maybe will become one of the most important platforms.

GME case seems to exploit the possibility for “short attack” by flipping the table into a infinite price increase, because the hedge funds accidentally created more fake shares that there is shares in existence and now have to by back.

Short attack = Using the possibility brokers have to artificial creating fake shares to drive down the price, in combination with shorting stocks for earning money.

More detailed explanation: https://seekingalpha.com/instablog/11442671-gerald-klein/309...

The combination of Clubhouse and Reddit will probably be one of the most important “inventions” this decade. Where GME could wake up everyone?

gwnwest21• 5 years ago

Hedge Funds managers have infinite resources and are working with Data Firms to prevent this from getting out of control again. These firms will use AI to scout social media platforms chatter and report back in real time what stocks are gaining momentum with retail investors.

https://www.marketwatch.com/story/wall-street-looks-for-ways...

https://www.ft.com/content/04477ee8-0af2-4f0f-a331-298744489...

sgpl• 5 years ago

I'm actually not super bullish on clubhouse. I'm sure they'll find some success but to call it something that will become one of the most important platforms, I don't see it. And perhaps I'll be proven wrong in the next decade on this.

I've recently started using twitter again (after initially using it in 2010/2011) and I feel that there's so much self promotion all the time disguised at knowledge sharing. It also seems like everyone (most people) have a podcast, a newsletter, a youtube channel, etc. I understand that on a surface level people are doing this to increase their 'surface area' but there's just too much and while I'm sure it does a some/a lot of good for the people putting it out there, most of it just seems like noise to me. So that's my reasoning to think that clubhouse won't really become as meaningful as you - it just adds more noise. Sure I can hangout in this room or listen to some folks talk about x/y/z topic, etc. but honestly I feel that after some time people will realize that their time could be better spent.

YZF• 5 years ago

Not too sure about the "fact" side of things. But the Internet has created opportunities for all sorts of people to get together faster than ever for all sorts of things.

You don't need >100% short interest for a shorted stock to go to infinity. A single share can do that. If I own all the shares, and you borrowed a single share and sold it back to me... well, good luck. Also these sort of attacks aren't really new. Short squeeze has happened before and various other similar ideas (attacking someone with leveraged positions or otherwise risky positions, including currencies). The interesting bit here is IMO the way these people, at least temporarily, acted together. Also the way the hedge funds couldn't grok that like they surely would if they were under attack from a more standard player.

tomfast• 5 years ago

Interesting comment.

Would you explain a little more about what you mean by “diversified parts of it” in “you naturally orient to getting exposure to opportunity for diversified parts of it, but when you have a scarcity view, your decisions are necessarily all/nothing”?

stouset16• 5 years ago

Your observation about young people with four-figure net worths thinking it’s rational to gamble it all on options is pretty much this week’s equivalent of those living paycheck-to-paycheck “investing” in the lottery.

The bigger problem is that this is rarely just a one-time decision to gamble. And repeatedly doing this is statistically pretty certain to lose you significant amounts of money—particularly when compared to just investing in the market as a whole—over the long run. It’s just another way that the poor are trapped in poverty, even though you can of course always find individual cases where someone got lucky and made millions.

This is one of the reasons I think Robinhood is a fundamentally an evil company. It’s been pretty conclusively demonstrated that the more trades you make as a retail investor, the worse your returns. To wit: Fidelity did some internal research on their customers to see which cohort had the highest returns. The winning cohort? The dead. Dead people don’t make trades, and so perform better than the living who do. I’d be willing to bet a large sum of money that Robinhood’s internal metrics conclusively prove that the net effect of their existence is a wealth transfer from the poor to the rich.

The real Robin Hood-esque company in this whole thing is Vanguard, who have almost certainly done more than most any other company in this space to return profits from the market to customers of all wealth ranges.

conformist• 5 years ago

These are good points and the lottery analogy seems quite accurate. I think, there may be an additional macro-aspect to this: If you are a young person with a four-figure net worth, you should be able to leverage this to buy (non-financial) options that have a much higher expected payoff than hyped stock options. For example, being able to quit a job to apply for others, moving to another town, spending additional time and money on education or similar. These are all options that you haven't got without the four-figure net worth. The real tragedy is that these options seem to be becoming more expensive or scarcer. Many are still better than an iterated lottery, but the (perceived) decline in optionality may be worthy of some sympathy. (Completely agree on Vanguard.)

PartiallyTyped8• 5 years ago

Being a 4 digit net worth grad student in Europe, riding a few meme stocks just for a short-while has increased my 'wealth' and given me tremendous amount of financial freedom. I understand that the odds are against me, but really, the expectation even when accounting for variance, and adjusting for risk tolerance are a no brainer to me.

I made >40% of my net worth in the first 2 weeks of January alone, and with GME I have multiplied my net worth by (>tenfold). Yes I understand that these are 'extraordinary times', but accounting for everything. I have literally nothing to lose. I can fast for a week if I need to, I can walk instead of taking the metro. Whatever. I am not going to lose a lifestyle that I never had and I never had a safety net to begin with because being a 4 digit net worth student doesn't give you any safety net.

Keeping track of my bets even before getting into this, I was right more often than not, and I am aware of survivorship bias and confirmation bias. In the limit, it makes more sense to spend 4-5 hours per day learning about market analysis, observing trends close to me and making decisions about sectors/fields that I know about.

dehrmann5• 5 years ago

The real Robin Hood-esque company in this whole thing is Vanguard

This.

I do worry a bit that there's something I'm missing because Vanguard is a Boomer thing that's no longer relevant, but I suspect all the research is solid and Vanguard being shareholder-owned aligns interests. Robinhood is probably just clever marketing and gamification of stock and options trading.

jcims• 5 years ago

Your observation about young people with four-figure net worths thinking it’s rational to gamble it all on options is pretty much this week’s equivalent of those living paycheck-to-paycheck “investing” in the lottery.

One difference here is the solidarity aspect of meme stocks vs lottery.

throwaway22455• 5 years ago

Your observation about young people... equivalent of those living paycheck-to-paycheck “investing” in the lottery.

You're so close to uncovering something here...! Why do you think so many people play the lottery?

im3w1l• 5 years ago

So something I've been thinking about: Living people enter the market when they make money, and they do that in a correlated way (times of high employment). And they exit the market in a correlated way to spend on retirement or college or whatever. Entering and exiting when everyone else do means you get a bad price.

sokoloff• 5 years ago

I agree with your points on trading frequency, but I still think Robinhood is good for people rather than bad.

I think the alternative destination for a lot of that Robinhood money isn’t “Vanguard VTSAX” but rather slightly positive lifestyle inflation/expenses.

To the extent that’s the case, all the gamification and reinforcement is creating a behavior that’s better than the likely alternative. (Returns are not good if your total lifetime investment trades are zero.)

dataflow• 5 years ago

Your observation about young people with four-figure net worths thinking it’s rational to gamble it all on options is pretty much this week’s equivalent of those living paycheck-to-paycheck “investing” in the lottery.

It's not—the lottery is by design guaranteed to have negative expected returns. The stock market isn't.

the_local_host• 5 years ago

Your observation about young people with four-figure net worths thinking it’s rational to gamble it all on options is pretty much this week’s equivalent of those living paycheck-to-paycheck “investing” in the lottery.

But when you "invest" in the lottery, you don't get to help blow up a hedge fund. I think many of the retail participants in the GME phenomenon find some entertainment value in what they're doing.

That said, I do think Robinhood makes it too easy for people to put on positions that they simply don't understand. The fiasco with "1R0NYMAN" comes to mind.

rubicon333• 5 years ago

The real Robin Hood-esque company in this whole thing is Vanguard, who have almost certainly done more than most any other company in this space to return profits from the market to customers of all wealth ranges.

This is true but unfortunately it's one of those situations where you need money to make money and even then it's a slow multi-decade long process.

Culturally young people find themselves in something of a vice grip. We are a consumerism culture hell bent on producing and acquiring the next best thing. Patience and presence of mind over financials are diminishing skills, yet you need both of these if you intend on retiring through owning stocks.

WalterBright4• 5 years ago

Oh, I figure people will get over wildly speculating in stocks and transition to a more steady hand at it, which will be good for them and the economy.

Kind of like I got over my wild days behind the wheel and drive pretty conservatively today.

hansvm• 5 years ago

The bigger problem is that this is rarely just a one-time decision to gamble. And repeatedly doing this is statistically pretty certain to lose you significant amounts of money—particularly when compared to just investing in the market as a whole—over the long run. It’s just another way that the poor are trapped in poverty, even though you can of course always find individual cases where someone got lucky and made millions.

Even with negative expected value, playing a lottery could be a rational decision given the right motivations and circumstances. Suppose for some reason you expect to be living paycheck to paycheck your entire life, barely having any surplus, and that there's nothing meaningful you can do to alter that trajectory. Investing scraps every month at 10% average returns (especially if you don't start till you're 30+) might allow you to retire a month or two sooner, buy slightly newer clothes, or maybe eat out a few more times each year, but even if you just lit that cash on fire you wouldn't have a substantially different life. However a few chances at $250k+ could fundamentally alter your possibilities, giving you a freedom that you otherwise couldn't dream of.

Uptrenda• 5 years ago

Alternatively: we could assume that people are capable of making their own financial decisions and don't need anyone to police what they do with their own money. Treating people like children for taking risks and assuming they are too incompetent to judge the consequences is condescending as hell.

The simple truth is Game Stop was a good trade, and I think comparing stocks to lottery tickets is very inaccurate. Stocks give you all kinds of numbers and information about the company which is just a little more transparent than staring into a random number generator. They have been called risky. But there are far more volatile positions to be holding.

genuine_smiles• 5 years ago

What’s better to invest in once you have 50k?

dehrmann5• 5 years ago

the economy doesn't provide anything better to invest in for under $50k

What's wrong with index funds? Real estate isn't everything.

fnimick• 5 years ago

I think the underlying assumption, which wasn't spelled out in the parent, is that any amount of money under $super-rich is similar amounts of worthless. If you genuinely believe that, then high-risk swings at a big payday make more logical sense than a low-risk gradual growth strategy.

I've heard friends express this - if you don't have $1 million +, you're just varying degrees of poor - so there's no point at gradual growth from 20k to 50k and etc when you're just as miserable. Might as well risk it all to try to get to the big time, since they don't see a reasonable path to growing gradually to anywhere worth living.

HenryBemis• 5 years ago

Taleb talked

Only because I happen to just starting reading this 4 books [0-3] motohagiography (word-depipction-of-saints?), and until 2-3 weeks ago I am ashamed to say I didn't even know who that was:

Nassim Nicholas Taleb.

[0-3]: Antifragile, The Black Swan, Fooled By Randomness, The Bed of Procrustes

motohagiography2• 5 years ago

Same Taleb. I recommend reading his books back to front because he's clearly difficult to edit and starting at the end means you don't have to go through the process of listening to him sound his ideas out. Most non-fiction works that way. If you only read his "Bed of Procrustes," and a selection of his technical papers, you'd be both better off, and following most of his advice.

A hagiography is a story that exalts the life of a saint. An "autohagiography," is what some writers call a shamelessly self-aggrandizing memoir. Motohagiography was a play on writing about motorcycles in a self-aggrandizing way, but could be extended to other technology. But thank you for giving it some thought!

Jommi2• 5 years ago

and each book just re-iterates the same things. Gets old fast.

aaron695• 5 years ago

his recommendation to get exposure to randomness that has asymmetric upside

Buy low, sell high?

WalterBright4• 5 years ago

I'm happy that the GME spectacle happened. It's made a lot of people realize they can participate in the stock market and accumulate wealth. There's no going back!

vagrantJin• 5 years ago

Yeah, I think I've read too much N. Taleb and his take on assymetrical outcomes.

the-dude• 5 years ago

I practice this in billiards/carambole ( 3 balls, no pockets ).

I try to avoid 'perpendicular' approaches, instead opting for shots with big angles, even if they are technically more difficult.

This literally translates into a larger area where I have the chance to touch the 3rd ball.

pontifier• 5 years ago

This puts the onus on others. In my opinion the biggest contributors to luck are observation i.e. the ability to see opportunity, and willingness to execute on the opportunities you see.

freshpots2• 5 years ago

This is an excellent video from Veritasium that discusses luck as a factor of success: https://youtu.be/3LopI4YeC4I

carrozo• 5 years ago

I’ve had this old post from Marc Andreessen pinned in my mental browser for a long time now. There are four types of luck and you can influence three of them:

Chance I is completely impersonal; you can't influence it.

Chance II favors those who have a persistent curiosity about many things coupled with an energetic willingness to experiment and explore.

Chance III favors those who have a sufficient background of sound knowledge plus special abilities in observing, remembering, recalling, and quickly forming significant new associations.

Chance IV favors those with distinctive, if not eccentric hobbies, personal lifestyles, and motor behaviors.

https://pmarchive.com/luck_and_the_entrepreneur.html

rexreed• 5 years ago

Of all those kinds of chance, the kind that you can really prepare for is really only Chance-type III.

Chance I is truly deus-ex-machina stuff you can't foresee nor plan for.

Chance II encourages randomness and serendipity, but those who lack the ability of discernment and proper focus risk being ADHD never focusing enough on anything to capture any opportunity, should it even emerge.

Chance III rewards those who have deepened their knowledge and have stubborn persistence to weather the inevitable rough patches. Because if it's not rough, then it's too obvious, and if it's too obvious, there's no real upside opportunity. You can plan for Chance III and prepare yourself for this.

Chance IV is black swan. It is the rarest of conditions where an eccentric hobby results in significant upside. You can't plan for this, and if you do pursue an eccentric hobby you should do it out of pure personal interest rather than planning for a black swan upside opportunity.

I have a feeling Marc Andreesen would consider himself to be Chance II or Chance III. And I question if his "luck" can truly be attributable to Chance II but rather his ability to "will" his fortune into being by virtue of being in Chance III.

ghaff3• 5 years ago

And he really owes much of his fortune to Chance I. Right capabilities/decisions but right place/time.

swyx2• 5 years ago

i've tried to quote this to friends before and struggled to remember it, so here's a simple 2 by 2:

1. Accidental Luck (General, Passive luck) - you have the luck of a plant - just lucky enough to be in the right place at the right time

2. Active Luck (General, Active luck) - you have luck from randomly moving around more

3. Prepared Luck (Individual, Passive luck) - you have luck because you've trained yourself to notice when luck happens to you

4. Magnetic Luck (Individual, Active luck) - you have luck because you work on interesting things and people seek you out

(i drew it out here: https://www.swyx.io/create_luck/#four-kinds-of-luck)

I also like the way Naval put it:

1. Hope luck finds you.

2. Hustle until you stumble into it.

3. Prepare the mind and be sensitive to chances others miss.

4. Become the best at what you do. Refine what you do until this is true. Opportunity will seek you out. Luck becomes your destiny.

moron4hire• 5 years ago

I would say this is exactly how I was able to pivot out of web and database development into VR development[0]. I spent a lot of time going out to meetups when I first started getting into VR. Meeting people, talking to people. Eventually, I started showing people the stuff I was building. That led to getting asked to do talks at the meetups about the stuff I was building. That led to more contacts. I ended up making friends with folks who would one day make the connections that got me my current job.

Incidentally, when folks at my current employer started talking about hiring someone for my role, they kept running into people who knew me and had a high opinion of me.

Networking works in many directions. But it only works if you don't go into it looking for it to work. I think the big key was that I wasn't out to gladhand with folks. I was just out to make friends over a shared passion. It gives an authenticity to your speech that people can see.

[0] Which now has a big web and database component, all in service to the VR app that I'm building.

ldbooth• 5 years ago

I like the visual of a surface area. It adds to how I think about it... The equation for luck similar as luck being the compounding interest component and over time, compounding itself with consistent doing. Compounding applies to many things, but take a business, years in business and word of mouth/experience is a form of compounding customers/revenue. Same for luck and doing something consistently with enthusiasm.

jonnycomputer3• 5 years ago

Given just how much bad luck I've had in my life, I'm not sure I want to increase my Luck Surface Area.

Ha ha. I know, that's not what the blog post is talking about. Well, sort of. Obviously, more exposure also means more risk. Like, I never used to get publication scam spam until I got published.

villasv• 5 years ago

When you pour energy into a passion, you develop an expertise and an expertise of any kind is valuable

I don't disagree with the overall spirit, but these Paul Graham aphorisms always turn me off.

To satisfy my mathematically oriented brain I've gone one step further and formalized the concept into the equation L = D * T, where L is luck, D is doing and T is telling.

See? There's no passion here. It really isn't relevant to what is being discussed.

Sure, passion is great. The more the better, the world is incredible when you're surrounded by it. Developers are fond of writing beautiful code, I am one of those too. But god damn, hold the inner coach and remember y'all are not psychologists. There is no reason to reduce the multitude of complex motivations to a single amorphous concept such as passion.

jonnycomputer3• 5 years ago

It is funny, because D * T suggests that it can all be done with D with just a smidgin' of T, or that you can just do a lot of talking with just a smidgin' of D.

But I guess I forgot about the Trump Presidency. So maybe D * T is the right model.

hazeii• 5 years ago

D == T maximises the area, and note it's not linear.

If you've got 12 units to split between D and T, total return is:-

So inefficient to be at the smidgen end on either axis, but anywhere roughly equal is fine.

soared• 5 years ago

I really really dislike the idea that everything you do needs to be multiplied by networking. Not everything is entrepreneurship, not everyone is looking to meet people to accomplish x.

I had hoped this article was something unique, but one paragraph in and it’s more growth hacking nonsense.

postit2• 5 years ago

I struggle a lot with advertising my work outside the company.

I'm the kind of engineer that will get anything done regardless of the tech (or people/process) complexity, and I always end up watching someone else in the team going to conferences to present my work.

Random reasons random, but mostly because my inner klout is way bigger than my outer persona.

ghaff3• 5 years ago

Do you not want to be the person presenting or are you being prevented from doing so for whatever reason. (And if the reason is something like presentation skills, do you care enough to do something about it?)

postit2• 5 years ago

Most of my work is per contract on which I've usually signed a non-disclosal.

bigbassroller• 5 years ago

I have come to a similar conclusion through the phrase “luck is opportunity meets preparation”.

baxtr• 5 years ago

I just love the positive tone of this article. There is so much hope and positivism. I find it energizing.

swyx2• 5 years ago

They did a lot of good coining the term "luck surface area" - i hear it about once a month now in tech circles.

I actually went much further and did a literature review on the philosophy of luck: https://www.swyx.io/create_luck/

In short, the next step after the LSA concept is the idea of four kinds of luck, summarized by pmarca as others have noted. https://pmarchive.com/luck_and_the_entrepreneur.html

But I think all of these are missing the angle of strategic intent - i.e. actively trying to go towards where luck is more likely. Luck is not evenly distributed. That is where I hope to add to the existing literature.

okareaman• 5 years ago

Coincidentally I just read this today: "There is no such thing in the world as luck. There never was a man who could go out in the morning and find a purse full of gold in the street to-day, and another to-morrow, and so on, day after day: He may do so once in his life; but so far as mere luck is concerned, he is as liable to lose it as to find it. "Like causes produce like effects." If a man adopts the proper methods to be successful, "luck" will not prevent him. If he does not succeed, there are reasons for it, although, perhaps, he may not be able to see them."

THE ART OF MONEY GETTING or GOLDEN RULES FOR MAKING MONEY By P.T. Barnum

https://www.gutenberg.org/files/8581/8581-h/8581-h.htm

spacemansam• 5 years ago

While I love him dearly, I'd definitely take any advice (or anything in fact) that the good Mr. Barnum was selling, with a pillar of salt.

MrYellowP• 5 years ago

"People" aren't actually a variable in this.

The variable is "amount of potential interactions with the environment". People are a part of ones environment.

Compared to someone who sits at home all day, the odds of "having luck" increase dramatically simply by going outside and walking around.

This includes "meeting new or old people", talking to them, sharing what you do etc.

What the author completely ignores is that it also increases the odds of getting unlucky.

I feel like the author has a rather romantic perspective on this.

rhodopsin• 5 years ago

“The harder I work, the luckier I get.” – Samuel Goldwyn

How to increase your luck surface area (2010)

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