Chapter 2 - Luck vs Risk Flashcards
What is the main message of Chapter 2 regarding luck and risk?
The main message of Chapter 2 is that luck and risk are siblings and integral parts of life’s outcomes. They highlight that outcomes do not solely depend on individual effort, but also on the impact of others’ actions.
How does the chapter differentiate between being bold and being reckless?
The chapter explains that being bold can lead to success if luck is on one’s side, but the same actions can be seen as reckless if luck isn’t favorable, underlining the role of luck in determining outcomes.
What is the advised approach to investing, considering luck and risk?
The advised approach to investing is to never put all your eggs in one basket, taking into account that outcomes are influenced by both luck and risk.
How does the chapter explain the concept of extremes vs. broad patterns?
The chapter encourages following broad patterns rather than extremes. Extremes, though often celebrated, are hard to replicate and dependent on luck, whereas broad patterns represent what has worked for most people and hence have a higher chance of success.
2What does the chapter say about success and failure as teachers?
The chapter suggests that both success and failure can be misleading teachers. Success can lead to overconfidence, while failure can make smart people think they are not capable, whereas in both cases, outcomes could be largely influenced by luck and risk.
