Lucky Man

As June rolls around each year, the time comes again for the annual graduation speeches.  Though most will be quickly forgotten (and probably should be), some do provide valuable inspiration and insight.   Thanks to YouTube, I stumbled upon a speech that struck me as particularly meaningful. In a baccalaureate address given by author Michael Lewis (Liar’s Poker, Blind Side, Moneyball) to the Princeton graduating class of 2012, Lewis made a succinct statement about the role of luck in life’s successes.

Successful people don’t always acknowledge the role of chance in life. Achievement is often rationalized as an entitlement. This helps to explain the excesses of Wall Street that surfaced in the 1980’s and which is still very evident today. I suspect that hedge fund managers who have had positive results are convinced that they have the ability to beat the market and therefore are deserving of the riches they have netted. They overlook the fact that most of their wealth derives from investor fees rather than market-beating returns.

Highly compensated executives are another group that have a difficult time delineating between talent and luck. A great leader like Steve Jobs can transform a good company into a great company but most executives are caretakers, rather than visionaries. I wish that corporate board of directors would recognize this difference and stop handing out multimillion dollar compensation packages for ordinary performance.

There might not be anybody on the planet who has given more thought to the role of chance in our lives than Nassim Taleb. The author of the trilogy Fooled by Randomness, The Black Swan and Antifragility, provides a compelling analysis of random events. He often pokes fun at people who have become rich or famous, yet fail to make any allowance for the role of luck in their performance. He saves some of his sharpest barbs for Nobel Prize winners, especially in the area of finance and economics. Not only are they often not the smartest or most deserving recipients, but the Nobel Prize gives credibility to economic models that he views as dangerous and which contributed to the financial crisis of 2008.

Some rich and famous people have no discernable talent whatsoever. They populate the tabloids and reality TV and are famous for being famous. Talk about lucky! That said, this trend is the exception, rather than the rule. I believe that most successful people have innate talents and abilities. More often than not, they have worked hard to achieve their success. Mark Cuban no doubt has the intelligence and drive which made him destined to be a millionaire. It was the luck of selling his business before the tech crash that turned him into a billionaire.

When smart and talented people like Michael Lewis admit that luck played a major part in their success, I find it very admirable. In an investment commentary earlier this year, bond king Bill Gross acknowledged the role of luck in his career. After all, his tenure as a bond fund manager has coincided almost exactly with the thirty-year bull market in bonds. He has to wonder how he will perform when the interest rate environment no longer provides a strong tail wind.

Like Mr. Lewis, I believe that the lucky have a responsibility to the unlucky. I can’t claim success like he has achieved, but for as long as I can remember I’ve felt very lucky. I was fortunate to have been born to great parents and to grow up in a stable household within the richest society ever seen. This set the stage for educational opportunities and everything else that came later. My career has been a series of fortuitous events, leading ultimately to the enviable position of making a living doing what I love. Not everyone is so lucky. With any luck, I’ll be able to keep doing it for a long time to come. For that, I am truly a Lucky Man