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How to increase your luck surface area (2010)

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Re: How to increase your luck surface area (2010)

#111

Post by motohagiography »

HenryBemis wrote: post #81
motohagiography wrote: post #31

Taleb talked about this with his recommendation to get exposure to randomness that has asymmetric upside, and is analogous to luck is preparedness meeting opportunity. What I like about the OP's model is it also explains the asymmetry of social media where people do very little at all and talk about is a lot because the kind of non-linear success we are aiming for is a function of exposure. When you have wealth of an…

>Taleb talked Only because I happen to just starting reading this 4 books [0-3] motohagiography (word-depipction-of-saints?), and until 2-3 weeks ago I am ashamed to say I didn't even know who that was: Nassim Nicholas Taleb. [0-3]: Antifragile, The Black Swan, Fooled By Randomness, The Bed of Procrustes

Same Taleb. I recommend reading his books back to front because he's clearly difficult to edit and starting at the end means you don't have to go through the process of listening to him sound his ideas out. Most non-fiction works that way. If you only read his "Bed of Procrustes," and a selection of his technical papers, you'd be both better off, and following most of his advice.

A hagiography is a story that exalts the life of a saint. An "autohagiography," is what some writers call a shamelessly self-aggrandizing memoir. Motohagiography was a play on writing about motorcycles in a self-aggrandizing way, but could be extended to other technology. But thank you for giving it some thought!

Re: How to increase your luck surface area (2010)

#112

Post by salty_biscuits »

tylerhou wrote: post #83
uyt wrote: post #78

Earlier quoted context omitted.

Expected value (a straightforward sum of total money in the system) is the wrong way to look at it. His point is that the expected utility of these gambles is still positive for people who have nothing.

Expected utility is positive implies that people have discontinuous utility functions wrt. money. That is, utility will jump significantly after reaching a certain net worth. Another explanation that is consistent with gambling behavior is that people have inaccurate risk functions; that they overestimate positive upside and underestimate downside. I am not familiar with the economic literature. But I believe that th…

The obvious discontinuity is "never have to work". People talk about this all the time when they talk about this stuff.

Re: How to increase your luck surface area (2010)

#113

Post by Jommi »

HenryBemis wrote: post #81
motohagiography wrote: post #31

Taleb talked about this with his recommendation to get exposure to randomness that has asymmetric upside, and is analogous to luck is preparedness meeting opportunity. What I like about the OP's model is it also explains the asymmetry of social media where people do very little at all and talk about is a lot because the kind of non-linear success we are aiming for is a function of exposure. When you have wealth of an…

>Taleb talked Only because I happen to just starting reading this 4 books [0-3] motohagiography (word-depipction-of-saints?), and until 2-3 weeks ago I am ashamed to say I didn't even know who that was: Nassim Nicholas Taleb. [0-3]: Antifragile, The Black Swan, Fooled By Randomness, The Bed of Procrustes

and each book just re-iterates the same things. Gets old fast.

Re: How to increase your luck surface area (2010)

#114

Post by threedots »

dehrmann wrote: post #107
threedots wrote: post #76

Earlier quoted context omitted.

No you're good. I'm a career hedge-fund/market guy and all of my investable assets (outside of my company and my house) are in vanguard trackers. I'd guess most of my friends who are professional investors are the same (except they likely have some investment in their own fund). That's not to say there aren't better investment options in the world but they aren't accessible to ordinary people (even quite rich ones).

> I'd guess most of my friends who are professional investors are the same I'm curious about this. Hedge fund guys make enough to be accredited investors, but they mostly don't invest in them? Are the minimums too high? Are the yields not that great? I know the 2010's weren't great years for hedge funds. I also halfway wonder if the real product hedge funds sell is complex strategies to pension fund manages who think…

It's a good question. I can only speak for myself but I would only be interested in investing in a very small number of funds and they don't want my money (or sometimes anyone's money). Unless you are convinced a fund adds value after fees it's very hard to justify when you can construct your desired market exposure with passive products which are much cheaper and more liquid. It's painfully boring to do that so like everyone else I'm tempted to punt on sexier things every now and again but most of the time I don't.

To answer your last point, there's some of that for sure - in many parts of finance complexity is good for margins. And yes it's tough to demonstrate much value if your investing process amounts to placing buy orders for index funds. It's not all bad incentives though, hedge funds can offer uncorrelated (to the wider market) returns which are very valuable in a portfolio.

Re: How to increase your luck surface area (2010)

#115

Post by Jommi »

sgpl wrote: post #75
punnerud wrote: post #47

Earlier quoted context omitted.

I love how Reddit (and HN) enable fast sharing, fact checking of information and lifting ideas. When it comes to increase luck surface I think Clubhouse maybe will become one of the most important platforms. GME case seems to exploit the possibility for “short attack” by flipping the table into a infinite price increase, because the hedge funds accidentally created more fake shares that there is shares in existence a…

I'm actually not super bullish on clubhouse. I'm sure they'll find some success but to call it something that will become one of the most important platforms, I don't see it. And perhaps I'll be proven wrong in the next decade on this. I've recently started using twitter again (after initially using it in 2010/2011) and I feel that there's so much self promotion all the time disguised at knowledge sharing. It also se…

Like the original article says, its all about the surface area. If you spend too much telling, you lose out on doing.

Re: How to increase your luck surface area (2010)

#116

Post by aaron695 »

motohagiography wrote: post #31

Taleb talked about this with his recommendation to get exposure to randomness that has asymmetric upside, and is analogous to luck is preparedness meeting opportunity. What I like about the OP's model is it also explains the asymmetry of social media where people do very little at all and talk about is a lot because the kind of non-linear success we are aiming for is a function of exposure. When you have wealth of an…

> his recommendation to get exposure to randomness that has asymmetric upside

Buy low, sell high?

Re: How to increase your luck surface area (2010)

#117

Post by swyx »

They did a lot of good coining the term "luck surface area" - i hear it about once a month now in tech circles.

I actually went much further and did a literature review on the philosophy of luck: https://www.swyx.io/create_luck/

In short, the next step after the LSA concept is the idea of four kinds of luck, summarized by pmarca as others have noted. https://pmarchive.com/luck_and_the_entrepreneur.html

But I think all of these are missing the angle of strategic intent - i.e. actively trying to go towards where luck is more likely. Luck is not evenly distributed. That is where I hope to add to the existing literature.

Re: How to increase your luck surface area (2010)

#118

Post by swyx »

carrozo wrote: post #40

I’ve had this old post from Marc Andreessen pinned in my mental browser for a long time now. There are four types of luck and you can influence three of them: Chance I is completely impersonal; you can't influence it. Chance II favors those who have a persistent curiosity about many things coupled with an energetic willingness to experiment and explore. Chance III favors those who have a sufficient background of soun…

i've tried to quote this to friends before and struggled to remember it, so here's a simple 2 by 2:

1. Accidental Luck (General, Passive luck) - you have the luck of a plant - just lucky enough to be in the right place at the right time

2. Active Luck (General, Active luck) - you have luck from randomly moving around more

3. Prepared Luck (Individual, Passive luck) - you have luck because you've trained yourself to notice when luck happens to you

4. Magnetic Luck (Individual, Active luck) - you have luck because you work on interesting things and people seek you out

(i drew it out here: https://www.swyx.io/create_luck/#four-kinds-of-luck)

I also like the way Naval put it:

1. Hope luck finds you.

2. Hustle until you stumble into it.

3. Prepare the mind and be sensitive to chances others miss.

4. Become the best at what you do. Refine what you do until this is true. Opportunity will seek you out. Luck becomes your destiny.

Re: How to increase your luck surface area (2010)

#119

Post by Gatsky »

PartiallyTyped wrote: post #66
stouset wrote: post #54

Earlier quoted context omitted.

Your observation about young people with four-figure net worths thinking it’s rational to gamble it all on options is pretty much this week’s equivalent of those living paycheck-to-paycheck “investing” in the lottery. The bigger problem is that this is rarely just a one-time decision to gamble. And repeatedly doing this is statistically pretty certain to lose you significant amounts of money—particularly when compare…

Being a 4 digit net worth grad student in Europe, riding a few meme stocks just for a short-while has increased my 'wealth' and given me tremendous amount of financial freedom. I understand that the odds are against me, but really, the expectation even when accounting for variance, and adjusting for risk tolerance are a no brainer to me. I made >40% of my net worth in the first 2 weeks of January alone, and with GME…

Are these returns after tax?

Re: How to increase your luck surface area (2010)

#120

Post by rubicon33 »

stouset wrote: post #54
motohagiography wrote: post #31

Taleb talked about this with his recommendation to get exposure to randomness that has asymmetric upside, and is analogous to luck is preparedness meeting opportunity. What I like about the OP's model is it also explains the asymmetry of social media where people do very little at all and talk about is a lot because the kind of non-linear success we are aiming for is a function of exposure. When you have wealth of an…

Your observation about young people with four-figure net worths thinking it’s rational to gamble it all on options is pretty much this week’s equivalent of those living paycheck-to-paycheck “investing” in the lottery. The bigger problem is that this is rarely just a one-time decision to gamble. And repeatedly doing this is statistically pretty certain to lose you significant amounts of money—particularly when compare…

> The real Robin Hood-esque company in this whole thing is Vanguard, who have almost certainly done more than most any other company in this space to return profits from the market to customers of all wealth ranges.

This is true but unfortunately it's one of those situations where you need money to make money and even then it's a slow multi-decade long process.

Culturally young people find themselves in something of a vice grip. We are a consumerism culture hell bent on producing and acquiring the next best thing. Patience and presence of mind over financials are diminishing skills, yet you need both of these if you intend on retiring through owning stocks.

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