Do you ever stop to wonder how your life would be today if events in your past had alternative conclusions? Perhaps the thoughts that enter your mind take you back to moments of great uncertainty.
Choices are usually based on outcomes. You are living with the outcomes of your past choices today. But this is not the complete picture, because to truly assess whether you have made good choices, you have to consider what the alternative outcomes could have been.
Imagine a strange billionaire offers you £20 million to play a game of Russian roulette – putting a revolver, containing a single bullet in one of the six available chambers, to your head and pulling the trigger. Five out of six of the possible outcomes will lead to a life-changing reward; one will lead to an embarrassing but unconventional death. If you win the £20 million, and the next day your neighbours see you parking up your Lamborghini, they might think that you have made some good choices in your lifetime. However, if you died, and the story is reported in the newspapers, public opinion of you will be significantly less favourable.
Hopefully we can see how relying on outcomes alone is actually a poor indicator of decision making. Was playing the game of Russian roulette a wise decision to make? Well that depends on how much you value your own life but I expect the vast majority of people would prefer to decline the offer rather than risk a bullet to the head.
Reality can be like Russian roulette but in some ways it is far more dangerous. The revolver of life has an unknown number of chambers and an unknown number of bullets. You never really know what to expect. Because we are dealing with unknowns, it’s easy to forget about the existence of a bullet especially when we have pulled the trigger a few times and survived. Rather than just looking at the outcome, the focus needs to shift to the process that leads to the outcomes we see. Then we can differentiate between a lucky idiot and a skilled professional.
Inspiration: Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb
Summi 