In this chaotic world, Wealth or life is more random than we thought. It is the future result which is random, determines our past decisions. It is true that chance favors the prepared. But every intelligent, hard working, persevering becomes successful does not mean that every successful man is intelligent, hard working, persevering. Economic risk takers are rather the victims of delusions. One should not take quality of their knowledge too seriously.
Let us see major events in our life. The biggest difference is created by birth. Some people are billionaires and some are beggars by birth. In childhood, some of us get undue advantage or disadvantage of our parent success or failures. Marriage can be a boon or bane for a person in life. Two sisters fortune can be turned around after marriage. Also future success or failures sometimes in spouse hand. While growing up, it also matters what kind of friends you have. It may be a chance, what profession you have chosen. In India in 90’s, most of software professionals are somehow successful today. Even in a job, one can get a right conditions or right boss. Some are millionaires because their stock options has done really well whereas their contribution may not be great. Sometimes the nature of work is also highly probabilistic. A regular job earns a steady income whereas investments are highly uncertain or speculative. Most Investments like stocks, real estate, bonds are invested in future.
Why life or wealth is so uncertain? Competition is one of the reasons in chaotic environment. As the competition is growing, the chance of success gets more unpredictable. Take an example of game. If some of the teams are equally competitive, environment (which is chaotic) will determine the result which is uncertain. So it becomes difficult to predict a win. As in case of rolling a dice, if all sides are equal (means competitive), the outcome is unpredictable. If dice is loaded (one team is highly skilled), then there is high probability of winning that side. Three variables are enough to create chaos. In economics, if there is high demand and low supply, the chances of getting a particular item is unpredictable. High price makes it predictable. If supply is high, more and more people will get it and becomes predictable for more people.
Still some people boast that they are self made. They started with nothing and accumulated wealth on their own. This is not possible as we depend on conditions and others for success. Take two examples (source : fooled by randomness). In the first, put 10 managers in a room. Randomly fire one manager monthly without any bias. If you ask the last manager after ninth month, how he survived the competition. He will tell different strategies and ways for his success. But you know in your mind that it has nothing to do with the skill of any manager. Humans are always looking for patterns even if there is none. In another example, send 1000 emails to different people predicting bull market next month to 500 and bear market to remaining 500. After a month, among the successful 500 candidates (based on whether the market ended bullish or bearish) again send 250 emails predicting bear market and 250 emails for bull market next month. Keep on repeating by dividing into half i.e., repeating again for 125, 62, 31, 15 and 7. For these last 7 people you are correctly predicting the market for last 8 months. To increase the number of months, you can increase the initial emails to 10,000 or 100,000. The beauty of this experiment is that we are ignoring the unsuccessful predictions and only concentrating on successful ones. This actually happens in real life. Successful people boast their risk taking capacity (or some other skill), but nobody knows how many people are failing by taking same risks. In India, lots of Gurus or Mahatmas claim that they have cured lots of people by magical powers. They are smart enough to wander from one place to another and keep claiming. If they are so certain, they should settle down at one place and make whole town healthy.
So take your time and check your life events. You might have got enough success in life but may be living in more richer neighborhood or chasing more successful people. It is possible that successful may be a lucky fool and unsuccessful may be unlucky genius in a world full of chaos.
Posted by dsodhi
Posted by dsodhi
Posted by dsodhi