I'm feeling bold this Monday so excuse me for starting the week with a teaser.
If you don't have the habit of analysing your portfolio wins I have a few questions for you:
If I’m so confident this was skill, why am I resisting questioning it?
Is my goal to prove I’m skilled, or to ensure long-term consistent success?
Instead of seeing this as a threat to my skill, could it be a sign of my maturity as an investor?
and here are some more in case you are still resisting the idea of luck possibly being an ingredient of your success:
Is this like mistaking good weather for being a great sailor?
Shouldn’t a skilled investor always analyze all possible factors, including luck?
What’s the cost of not considering luck in my analysis? Am I willing to take that risk?
What if analyzing luck actually gives me a competitive edge over others who ignore it?
Outcome bias is all too tempting even for experienced professionals; too often a good outcome is taken as proof of a good decision and not enough time (if any) is put into probing this.
Success is a lousy teacher the wording goes. Yet it doesn't have to be this way. Conscious decision makers can count their true wins vs their lucky ones and learn from both.
(I'm referring to luck as being a scenario where you achieve your desired outcome but due to factors other than you've foreseen)
Have you convinced yourself?
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