Newsletter: On luck

Michael Lewis, the writer of books like Liar’s Poker, Moneyball, Flash Boys, or The Big Short, is our protagonist today. He gave the 2012 commencement speech at Princeton, and focused on the role of luck in life.  You can find here the full transcript, and the video of the speech can be found here. What follows is an adapted selection:

<< (…) I was almost certainly less prepared for the marketplace than most of you. Yet somehow I have wound up rich and famous. Well, sort of. I’m going to explain, briefly, how that happened.

(He now explains how he thought about writing books when he first wrote his bachelor thesis, and how after finishing his masters he met the wife of a top Salomon Brothers banker at dinner. She convinced her husband to give him a job, and after spending two years as a “derivatives expert” looking at Wall Street from a vantage point, decided to finally quit and write a book…) 

The book I wrote was called “Liar’s Poker.”  It sold a million copies. I was 28 years old. I had a career, a little fame, a small fortune and a new life narrative. All of a sudden people were telling me I was born to be a writer. This was absurd. Even I could see there was another, truer narrative, with luck as its theme. What were the odds of being seated at that dinner next to that Salomon Brothers lady? Of landing inside the best Wall Street firm from which to write the story of an age? Of landing in the seat with the best view of the business? (…)

 This isn’t just false humility. It’s false humility with a point. My case illustrates how success is always rationalized. People really don’t like to hear success explained away as luck — especially successful people. As they age, and succeed, people feel their success was somehow inevitable. They don’t want to acknowledge the role played by accident in their lives. There is a reason for this: the world does not want to acknowledge it either.


 The “Moneyball” story [the story of how the MLB team with the lowest budget managed to beat the rich teams using statistics to find incorrectly valued players] has practical implications. If you use better data, you can find better values; there are always market inefficiencies to exploit, and so on. But it has a broader and less practical message: don’t be deceived by life’s outcomes. Life’s outcomes, while not entirely random, have a huge amount of luck baked into them. Above all, recognize that if you have had success, you have also had luck — and with  luck comes obligation. (…) You owe a debt to the unlucky.

 I make this point because — along with this speech — it is something that will be easy for you to forget.

 (…) you are the lucky few. Lucky in your parents, lucky in your country, lucky that a place like Princeton exists that can take in lucky people, introduce them to other lucky people, and increase their chances of becoming even luckier. (…)

All of you have been faced with the extra cookie. [Coming from a previous anecdote, and simbolizing entitlement. The “extra cookie” are those moments in which we are offered something and we believe we deserve it when it was simply random that we were in the position to take it.] All of you will be faced with many more of them. In time you will find it easy to assume that you deserve the extra cookie. For all I know, you may. But you’ll be happier, and the world will be better off, if you at least pretend that you don’t. >>

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