Saturday 29 August 2015

The Worst Bet You Can Make

The realization of this bet came to me when i met a friend of mine over at lunch. So here it goes.

You work in an a great company and have  had a healthy career. The ultimate success metric for you is becoming the CEO/Head of the company. 

For this you spend a lot of time probably much more that others do. In this path sometimes you miss out on things you want to do. Miss out thinking what is your passion. 

And as your skill enhances, as you grow higher you get more confident of achieving this goal. 

Now lets for a moment lets step aside and look at this goal mathematically.
  • Approx number of companies you would want to be CEO/Head=  5000
  • Approx number of people who are employed in all these= 50 lacs
  • Approx number of people who you think have similar capabilities as you (5%) = 2.5 lacs
  • Chance of you becoming a CEO= 0.2% ( 5000/2.5 lacs)
If you are a poker player or investor considering the odds how much time and money will you put on this bet? To my mind playing this bet is one of the worst bets you will undertake.

IMHO, don't play this bet. Do things that you enjoy. Enhance your skills. Enjoy the process and don't be obsessed over winning this losing bet.

And if you want to play this bet, then loads of luck from my side, cause that is what you will need in loads.

cheers.
PS- Apologies for not declaring upfront that this is not an investment blog :)

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4 comments:

  1. Nikhil Kulkarni30 August 2015 at 03:19

    So how do you increase the odds? There has to be a way!

    ReplyDelete
  2. Unknown18 September 2015 at 12:52

    of course there is. after luck is nothing but probability. So if you increase the chances of random events things will improve. The book "how to get lucky" is pretty interesting one on this.
    The second dimension i think is find your passion and live it. That i think kick starts "serendipity"

    ReplyDelete
  3. Prashanth Jnanendra30 September 2015 at 02:09

    Continuing the mathematics, shouldn't you multiply probability with payoff too? A bet is characterized by odds and payoffs. No?

    ReplyDelete
    Replies
    1. Unknown4 October 2015 at 08:46

      ofcourse. This is a case of low probability and high pay off. Such cases or the long tail of +ve side have massive luck component build in it. so u need to accordingly take the bet

      Delete

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