What is Luck?

Let us think about the nature of various events that happen around us.

We most times start to believe the outcomes of the various events are driven by our actions. We fail to acknowledge that they are random in nature.

Let us take an example...

A friend of mine is looking for a job. He has been finding it difficult to find a job. He requests to recommend for a job if any job is available thru my circle of friends. Few days later, I meet with a group of friends. I ask my friends if there are any jobs open that can be referred to my other friend. Fortunately there is a position open in one of my friend's office. The friend is referred and he eventually lands the job.

Now, Let us take this scenario.

Can I claim credit for the struggling friend getting a Job?

Most people boast that it was their influence that got their friend the job. The question

I would ask myself is, If there is one more friend comes asking for a job. Can I get him one? Maybe I can get one.

The next question I would ask myself, If 20 people come asking for a job, can I get them all a job?

Probably Not.

If we disassociate ourselves and take a birds eye view, the reason the referral providing the friend the job may be many.

1. first of all there was an opening.

2. Secondly, the opening was in the office my friend works.

3. It was possible for both of us to meet in the get together.

4. He was Suitable for the open position. Nobody offers job for charity.

5. Nobody better landed for the interview.

If we start disecting every event that happens around us, we would realize that most things are random (or Luck).

Anything that cannot be repetitively achieved can be attributed as non-deterministic.

In other words, Randomness or Luck.

So. if we step back and think about everything that happens around us, sliver of things are deterministic. Everything else is Luck. We overestimate our ability and underestimate Luck.

We should acknowledge the role of luck in most things that happen around us.

On the other hand, people assume randomness as uncontrollable. But, I think Luck is very nuanced. Let us look at different ways one can get lucky.

Luck by Chance

The most commonly acknowledged form of luck is, Luck by chance. It is like winning a lottery ticket. It is in nobody's control.

Its a chance-A low probability event.

Let us say you have a bowl of 999 Red balls along with one Green ball. If the 1 green ball is to be considered Luck like winning a lottery ticket. You have a chance to draw 1 ball. What is the chance to be lucky?

Most of such events have even lower probability.Lottery has 0.000001 % chance. These events may happen once or twice in a lifetime. They are completely uncontrollable.

Creating your own Luck

Earlier I said, most things are random and we cannot control.

Create Luck? Does it sound contradictory?

If everything is random, then what's the purpose of life?

It would be no different to characters in a video game-Controlled by

someone else. Many call 'GOD‘. Are we all in a simulation? Thats for another day. But, I think there is more value to human effort and attributes like Perseverance, Hard work and human aspirations. When we put repetitive work and create energy towards a goal,

some magic happens. It may sometimes take a lot of time and may also test our patience. It would take enormous belief and character to persevere in such hard times. It need not always be hard work, its also sometimes behaviour-How we behave in such bad times

that creates a lot of consequences-Good & Bad.

In cricket. Coaches say! Play Proper Cricket! When you do the right things on the field like playing in the V. not dropping Catches, No mis-fielding, No aggressive emotions towards opponents.Running extra runs for yous partner. These things when done consistently gets noticed more prominently than few extra-ordinary performances now and then.

Likewise, in work and in life if you keep doing the right things people take notice of you. At some point you will be paid back for your behaviour.

The key thing here is consistency of work,behaviour,belief, character and patience.

If you keep doing the right things consistently, you will eventually create luck.

Lets take a look at this mathematically.

Take the same bowl with 999 Red balls and 1 Green ball.

Although, probability of luck was estimated to be 0.01%. By constantly putting in more effort and making more attempts creates more chances of getting lucky. If you give yourself 1000 chances, its very unlikely to not get lucky. More attemps you take, higher the probability of getting Lucky.

Positioning for Luck

Most rewarding things also come with an equal amount of risk. For a youngster looking to be a cricketer or a superstar actor, while the rewards on achieving the goal may be humongous. The opportunity size is very small. Among the 1 billion Indians, 40% people are less than 18 years old. While there are only 11 spots in a cricket team. there are crow of people aspiring to be one in that 11. If you are a wicket-keeper, you are technically fighting for 1 spot. Risk Dewald ratio is lob-sided.

Let us think about the other common trend that we see in education. Most people get into engineering. There is also a bigger opportunity size for engineers.

Similarly, you can map Risk-Reward for various opportunities. Most opportunities have an equal risk to reward. But interestingly, there are often some unique opportunities with no downside and uncertain upside. This is wonderfully explained with many examples in the

book 'Dhandho Investor’. Most of these could be business or career opportunities.

Take for example, Jeff Bezos who quit his salaried job to experiment his idea. He had nothing to lose. The business required a capital that he could afford to lose. If the business failed like for most others, he could very well find a salaried job. The failed experience would only add value

to his resume. But on the other hand, if the business did well, he had an unlimited upside.

Monish Pabrai calls it.

If we position ourselves to opportunities that have very low down-side and an uncertain upside. Over time, we cannot help but get lucky.

Making Luck chase you

Making luck find you is probably one of the most difficult propositions. It requires oneself extra-ordinary ability. Besides ability, one needs to have accountability and reputation for opportunities to trust and come looking for you. Let's take an example of Warren Buffet.

What is the real wealth of Warren Buffet?

Imagine if all the wealth is taken away from Warren Buffet. All his investments, properties and money.

People would come looking for Warren to give their money for investing. Its not only because his best in the business ability in investing but also the reputation he has built and the accountability he has demonstrated over the years. Similarly, personalities like Sachin, Dravid, Dhoni

in Cricket, Federer, McEnroe of tennis.Steve Jobs, Musk and Gates in entreprenership have all built similar personas. On the other hand, people with similar abilities have failed to garner such reception because of their dubious reputation.

Azharuddin, Cronje, Anil Ambani, Jesse Livermore are all such examples who failed to demonstrate accountability and gain trust.

Once we start looking at randomness of life in such nuanced way, the way we look at the whole world changes.