What role, exactly, do skill and luck play in our successes and failures? Some games, like roulette and the lottery, are pure luck. Others, like chess, exist at the other end of the spectrum, relying almost wholly on the skill of the players.
But in every other domain--from business, to investing, to sports--skill and luck seem almost hopelessly entangled.
In his provocative new book, Michael Mauboussin untangles the intricate strands of skill and luck, defines them, and provides useful frameworks for analyzing their relative contributions. He offers concrete suggestions for how to put these insights to work to your advantage in business and other dimensions of life.
Among the insights that Mauboussin reveals:
- When your skill is greatest in different domains (the "arc of skill")
- Why you want to increase randomness when you're the underdog
- Why understanding reversion to the mean is crucial
- How to find the "right" statistic
- Why social ties can greatly increase a product's chances for success
Showcasing Mauboussin's trademark wit, insightfulness, and analytical mind, "Skill versus Luck" is a must-read for anyone seeking to make better decisions--in business and in life.
Michael J. Mauboussin is an investment strategist and has been in the financial services industry for more than twenty-five years. He has also taught at the Columbia Graduate School of Business since 1993, and is on the board of trustees at the Santa Fe Institute.
He is the author of two previous books, "Think Twice: Harnessing the Power of Counterintuition" and "More Than You Know: Finding Financial Wisdom in Unconventional Places" and is coauthor, with Alfred Rappaport, of "Expectations Investing: Reading Stock Prices for Better Returns."