I can’t tell you how many Medium articles I’ve read that have mentioned the habits of Warren Buffett, Charlie Munger, Elon Musk, Steve Jobs, and Bill Gates. Was it one hundred? Two hundred? Five hundred? Fuck if I know but whatever the number — it’s better I don’t count. And judging by the number of “claps” that many of these articles have received, I can tell that I’m not the only one sucked into clickbait summaries that serve solely to motivate us lazy commoners to nurture the work-ethic of self-made billionaires.
Perhaps I’m just bitter that these don’t seem to work.
Have you ever had an epiphany? I don’t mean getting struck by lightning and then, upon waking up in a hospital bed, realizing that you need to sell all of your belongings and join a monastery nestled in an Italian hillside. I mean a small moment in time, where you read something or something insignificant occurs, and you realize that one belief you held firm for a very long time has, most likely, been incorrect this entire time? Well, that’s what happened to me a few days ago.
I was eating lunch at work when I impulsively decided to purchase a book. The author is a former professional poker player who now devotes her energy to teaching C-suite executives and amateur poker players about smart decision-making. Shortly after thirty pages into the book, I started to feel my brain slightly implode (or what I thought it would feel if my brain imploded and I was somehow still conscious enough to feel it occur). I had an epiphany that how to obtain the elusive sense of “success” was all wrong.
In Thinking in Bets, Duke stresses that analyzing decisions made during poker are much like making decisions in real life: You never have all the information, it’s often a time-sensitive matter, and you have to just sort of go based on your experience. There is nothing certain about the outcome because luck is always a factor. That’s why you, a) have to divorce your decision-making from the outcome, and b) acquire as much information as possible to reduce uncertainty.
Part of the problem is how our brains are wired. The prefrontal cortex covers the front part of our frontal lobe. This relatively small (in proportion to the whole) area of our brain is absolutely crucial to deliberative decision-making. In other words, I have this part of my brain to thank when I have to sift through hundreds of documents at work and decipher what is important for my client’s case and what’s not.
But we encounter hundreds, if not thousands, of decisions every single day. And the prefrontal cortex simply cannot handle processing these decisions. As a result, we leave a lot of small decisions to our gut — aka our preconceived assumptions. So, for example, when we hear a sound increasing in volume when we walk along the sidewalk, we assume that it’s a car driving by us. We don’t know for sure, but historically, that’s been the case. Consequently, we distance ourselves from the edge of the sidewalk. If we’re wrong — and it’s just, say, a dinky moped coming by — it’s a false positive. Yeah, we were wrong, but in the end, it doesn’t matter because we’re still safe. If we think the opposite — we suspect that a truck is driving up beside us but we tell ourselves “no it’s probably just a moped” — and we don’t step away from the curb, well we may get hit by a truck. That’s a false negative.
Why does this matter? Well because a) our biases impact our decision-making, and b) there’s an element of luck when it comes to the outcome.
This brings me to my main argument: The decisions that someone makes do not guarantee a specified outcome. And so, if every self-made billionaire wakes up at approximately 5:00 AM, drinks a cup of black coffee, reads two newspapers, and then goes for a 5K run before delving into work, none of that can be proven to have caused them to become filthy rich. In fact, the probability that there are more people out there who do all these things and do not become billionaires is significantly higher than those who do and are on the path to outperform Warren Buffett. We’re forgetting the crucial element in every outcome’s recipe: luck.
Duke uses the example of all the pollsters who were strongly criticized after Trump was elected. Duke argues that the pollsters weren’t wrong (Nate Silver of FiveThirtyEight.com predicted Trump had a 30-40% chance of winning), it was just an improbable outcome. None of the pollsters declared that Clinton was definitively going to win, but rather Clinton had a higher probabilistic chance of winning. As Duke states, “An event predicted to happen 30% to 40% of the time will happen a lot.”
She elaborates on the fundamentals of poker:
It is a game of decision-making under conditions of certainty over time. (Not coincidentally, that is close to the definition of game theory.) Valuable information remains hidden. There is also an element of luck in any outcome. You could make the best possible decision at every point and still lose the hand, because you don’t know what new cards will be dealt and revealed. Once the game is finished and you try to learn from the results, separating the quality of your decisions from the influence of luck is difficult.
I’m convinced that life is no different. We don’t want to admit to ourselves that some luck was inevitably involved in the success of Buffett or Musk. We want to believe that we can come from humble beginnings and graduate to a seven or ten-figure net worth. And that’s not to say that can’t be done. It’s admitting that it won’t be solely because of the good (or bad) decisions that we made along the way.
This is a classic example of survivorship bias: The idea that we concentrate on those that are successful and forget those who aren’t.
Nassim Taleb calls this “silent evidence.” He explains in The Black Swan how we view historical evidence through a filter that selects “the rosier part of the process” and ignores parts of the process that don’t coincide within our preconceptions, or at the very least ignores the fact that the historical evidence available to us is incomplete. Taleb uses the example of successful authors and our preconception that their talents were the reason for their success. However, our reasoning is flawed because our information, of which we rely upon to formulate our decision, is incomplete. We do not have access to the millions of authors whose works remain unpublished. Consequently, we cannot accurately evaluate whether or not talent is a factor in authorial success or not and — more so — we cannot reasonably infer that talent is the explanation for success based only on our study of successful authors who are talented.
In summary, Taleb explains:
This bias extends to the ascription of factors in the success of ideas and religions, to the illusion of skill in many professions, to success in artistic occupations, to the nature versus nurture debate, to mistakes in using evidence in the court of law, to illusions about the “logic” of history — and of course, most severely, in our perception of the nature of extreme events.
I don’t write this to be a downer. Articles that, in good faith, try to motivate you to be your best self are worth reading if the objective you desire is achieved. But this notion — that we choose to study certain success stories — can be harmful should we not realize that it doesn’t help us understand what the factors really are that led to a certain person’s success (which, again, is partly due to luck anyhow).
I see this as a good thing. Not because I enjoy being more confused about what I should and shouldn’t do in life, but because it means I can make the best decisions with the information available to me any given time and just hope for the best. There is no special trick. Just because someone else is doing something doesn’t necessarily mean I should be doing that thing. Everything is uncertain. Whatever is in the cards for me down the road will have some element of luck involved.
While this takes some pressure off (since all we can do is limited to what’s available to us and we have no reason to suspect we should do something more), it does require us to reconfigure our brains. For example, if I write a blog post that is well-read and receives 10,000 claps, I must tell myself that its success is not necessarily because I just happened to write better than any of my other posts or that I touched upon a topic that is trending right now, although both of those things may be true. In reality, its success could be for reasons as simple as Medium had a glitch in its algorithm and my post got stuck at the top of fifty-thousand users’ front page for thirty minutes. Or that a popular Influencer just happened to read it while he was waiting for his Uber to pick him up from the airport and he just happened to promote it on Twitter. These are circumstances I have no control over.
Just like how I could be more prepared for a hearing than the opposing counsel, but I still lose because I don’t have all the information available to me prior to the hearing. Or, no matter how they shape up, my arguments are simply weaker than the other side — making the length of time that I prepared for the hearing irrelevant. I could make all the right decisions and still lose. Conversely, I could make all the wrong decisions and still win (for instance, the opposing party misses a crucial deadline and our set of facts becomes de facto accepted).
This is the premise of Chuck Klosterman’s book But What if We’re Wrong? Thinking About the Present as if it were the Past. In a similar vein of Taleb’s “silent evidence” Klosterman writes:
History is a creative process (or as Napoleon Bonaparte once said, “a set of lies agreed upon”). The world happens as it happens, but we construct what we remember and what we forget. And people will eventually do that to us, too.
So why are we captivated by 500-word articles that neatly summarize the habits of the most successful? The most informed answer that I can give is that it comes down to our gut (and our biases). We have a problem of incorrectly identifying causation when it’s simply correlation. Just as how when we lose a basketball game, we assume it was due to a few bad calls by the referee and when we win we assume it’s due to our team’s hard-work and strategic plays. It never crosses our mind that all of these things could be simultaneously happening in the same game and still not dictate whether one team wins or loses.
Conventional self-help articles that cite “successful” entrepreneurs are neither good nor bad. You are free to inherit everything or nothing from reading them. They exist. So do you. And if there’s one thing I’ve learned from Duke, it’s this: The decisions that you make matter a lot and simultaneously don’t matter at all. Extrapolate from that what you will.
Jennifer Chan is a lawyer and blogger. You can find her at jennifertchan.net where she focuses on connecting the dots between work, money, and happiness. She resides in Toronto, Canada with her girlfriend, full-figured rabbit, and deaf & blind cockapoo.
Image via Unsplash