Found via The Big Picture.
The world around us is a capricious and often difficult place. But as we have developed our mathematical tools with increased sophistication, we have in turn improved our ability to understand the world around us.
And one of the seemingly simple places where this occurs is in the relationship between luck and skill. We have little trouble recognizing that a chess grandmaster’s victory over a novice is skill, as well as assuming that Paul the octopus’s ability to predict World Cup games is due to chance. But what about everything else?
Michael Mauboussin is Chief Investment Strategist at Legg Mason Capital Management who thinks deeply about the ideas that affect the world of investing and business. His previous books have explored everything from psychological biases and how we think to the science of complex systems. In his newest book The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing he tackles the problem of understanding skill and luck. It is a delightful read that doesn’t shy away from the complexity, and thrill, of understanding how luck and skill combine together in our everyday experience.