The Success Equation: Skill Plus Luck Equals Success

Success Equation: Skill Plus Luck

success equation: skill plus luckHave you read Michael Maboussin’s book  —The Success Equation?

I have been reading different Michael Maboussin  for a long time. He is a very successful investor who often writes about luck and its impact on investing and sports.

I find the intersection of these two disciplines fascinating.

Well, he is back out with another persuasive article. This time Maboussin presents compelling information on the need for more and more luck as the skill level of competitors  increases. If skill intensifies in a discipline than we find ourselves back in a dynamic in which luck comes into play.

He calls this the “paradox of skill”:

“..This is one of the lessons of the paradox of skill. Getting better in an absolute sense doesn’t matter if it’s offset by the competition. Hitters today are much better than they were in the past, but so are the pitchers. The improvement is obscured by the interaction”

The article also touches briefly on Anders Ericcson’ work on deliberate training in Peak.  Basically he is reminding us that the increase in skill is due to a tremendous increase in training.
The entire article is worth your time. You can read it article here.
Updated: Here’s a podcast from the capital allocator podcast in which he speaks more about the paradox of skill.




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