EP43 The Success Equation by Michael Mauboussin

Michael Mauboussin’s book “The Success Equation” walks through how to distinguish skill from luck and its impact on everything from investing to sports. Mauboussin is the author of one of my favorite books of all time, Expectations Investing, and this one has similarly powerful insights. He teaches us how to develop skill through deliberate practice and how to overcome stronger opponents as an underdog. He also shares the counterintuitive paradox of skill, where as skill improves, luck becomes even MORE important, a framework affecting financial markets and sports leagues today. Lastly, Mauboussin shows us the value of persistence in skill-based activities, explaining the impact reversion to the mean has on technology companies and public market investors. Let's jump right into the important lessons behind skill vs luck!

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The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing - Michael Mauboussin

bubble.com memo - Howard Marks

Increasing Returns and the New World of Business - Brian Arthur

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Show Notes:

1:47 - Distinguishing luck vs skill

6:04 - The Luck-Skill Continuum

10:59 - Developing skill through deliberate performance

14:35 - Improving skill through feedback - pick ROI over EGO

16:29 - The Paradox of Skill: as skill improves, luck becomes even MORE important