By Jason Zweig | Nov. 27, 2016 1:07 pm ET
Image credit: George De La Tour, “The Cheat with the Ace of Clubs,” Kimbell Art Museum, Fort Worth (Wikimedia Commons)
Here’s a piece on luck I wrote in 2003, in which I argued that being lucky is, at least in part, a skill. I’m not sure I still agree with all of it (especially the section on gut feelings, which aren’t likely to be a good guide unless you limit their influence with techniques like checklists). But you might still find some of it useful.
R U Lucky?
On a lovely morning in May 1994, Barnett Helzberg Jr. was walking past the Plaza Hotel in New York City when he heard someone yell, “Mr. Buffett!” Helzberg turned and saw a woman in a red dress talking to a man he recognized as Warren Buffett. Recalls Helzberg: “I walked up to him and said, ‘I’m Barnett Helzberg of Helzberg Diamonds in Kansas City. I’m a shareholder in Berkshire Hathaway, I really enjoy your annual meetings, and I believe that my company fits your criteria for investments.'”
Helzberg Diamonds was one of the top jewelry chains in the country, with $282 million in annual revenue, but it was owned privately by Helzberg and his family. Within weeks, Buffett had bought the company for an undisclosed price. “My luck is uncanny,” says Helzberg. “The more you believe that you’re lucky, the luckier you are.”
As Helzberg’s story shows, being in the right place at the right time is one of the keys to making your own fortune. But there’s more to luck than harvesting shamrocks or rubbing rabbits’ feet. There’s a lot you can do to improve your luck. Some people, it seems, are skillful at being lucky.
These ideas are developed in a new book, The Luck Factor, by British psychologist Richard Wiseman. Wiseman studied more than 400 people who described themselves as very lucky or unlucky. He found that some are indeed luckier than others, that lucky people share similar attitudes and that many apparently random outcomes can be controlled. (Lotteries and gambling are not among them!) Wiseman found four characteristics that govern good fortune.
They mix it up. Lucky people are extroverted and eager to experiment. Wiseman describes a woman who, before she goes to a party, picks a color. Then she talks to everyone in the room wearing that color. Thus she meets more varied people–and gets more dates. Legg Mason Value Trust’s manager Bill Miller built one of the best investing records ever by buying stocks like America Online and Dell Computer that more conventional investors wouldn’t touch.
The great sociologist Robert K. Merton, in his forthcoming book The Travels and Adventures of Serendipity, calls this “structured uncertainty.” By embracing new experiences and varying your routine, you throw yourself in serendipity’s way, increasing your odds of getting a lucky break.
They listen to their gut. Weighing the pros and cons of any business decision, entrepreneurs often suffer decision paralysis. “Unlucky people try too hard to analyze everything,” says Wiseman. Lucky folks like Helzberg make intuitive decisions. “I’m a little of a shoot-from-the-hip kind of guy,” says Helzberg. When he spoke to Buffett, he recalls, “I wasn’t thinking. I just did it.”
Even Benjamin Graham, Warren Buffett’s mentor and the greatest investment thinker of all time, owed much of his fame and fortune to a hunch. In 1948, Graham’s fund bought Geico, even though the insurance company was not statistically cheap by his analysis. Graham was unsure whether to call Geico a “lucky break” or a “supremely shrewd decision” in his book The Intelligent Investor. But his investors, whose initial stake of about $712,500 grew to some $300 million, didn’t care. They just rejoiced that the extraordinarily analytical Graham knew when to listen to his gut.
Wiseman suggests finding a calm and private area, and imagining that you are alone with a wise elder who wants to hear not what you think about your choices but how you feel about them. Visualize the scene, then describe–aloud–your feelings about the decision.
They never quit. “Unlucky people collapse under bad luck,” says Wiseman. “Lucky people treat bad luck as a learning experience.” Thomas Edison tested thousands of materials–including boxwood and bamboo–as potential filaments for his “incandescent lamp.” (When this guy said that genius is 1% inspiration and 99% perspiration, he wasn’t kidding.) Finally, Edison discovered that carbonized cotton thread would do the trick. If he’d been a quitter, there’d be no light bulb switching on over your head when you get a good idea.
Wiseman recommends keeping a list of “lucky goals.” Be as specific and realistic as you can (“I wanna get rich quick” doesn’t count, but “I want 10 new customers next month” does). Then monitor your progress toward those objectives. Set a few goals, so a lack of luck in one arena can be overcome by a lucky strike in another.
They look on the bright side. Picture two cars, each occupied by only the driver, colliding head on at high speed. Both cars are totaled. Both drivers walk away without a scratch. The unlucky one wails, “Oh God, look at my car!” The lucky one exclaims, “Thank God I’m alive!” One sees only what went wrong; the other, what went right. The glass is both half empty and half full, depending on whether the person looking at it considers himself lucky or unlucky.
Now imagine what happens next. The driver who sees himself as lucky feels so happy to be alive that he shrugs off any setbacks for the rest of the day. He tells everyone that simply being alive is a miracle. Other people are struck by his enthusiasm, and their approval makes him feel even luckier.
The driver who considers himself unlucky fixates on anything else that goes wrong, no matter how minor, as yet another sign that the universe is against him. Picking up on his negativity, waitresses dawdle, security guards ask for several forms of ID, checkout clerks don’t even tell him to “have a good one.” By the end of the day, he is convinced that he is cursed.
Which driver will be a bigger business success? The answer is obvious. Starting from the same point, these two people have driven themselves down opposite roads of luck. As Louis Pasteur said, chance favors the prepared mind. Good luck strikes those who are open to it.
￼Source: Money Magazine, August 2003