Saturday, July 3, 2010

Risk Taking and success

Tyler Cowen, on his ever excellent blog, quotes a reader on how people take chances in some areas of their lives and are quite bland in others. I found this interesting at several levels. First, I tend to agree with the general principle that we have only so much energy (mental or physical) to spread between tasks and that you can be focused on only so many at a time. Second, I think it blends in well with Mark's recent skepticism that risk taking is as good of a universal strategy as it seems to be if you read business advice books.

The reason is that success is not a single dimension, nor is happiness. If you have the incredible natural talent and drive to be the very best you can possibly make a risk taking strategy work because you have the ability to recover from failure. In the same sense, the very rich can try high risk investment strategies as they may still be well off even if the strategy fails. My favorite example of this is somebody like Garth Brooks trying to be Chris Gaines; Garth was a sufficiently well known star that he could recover when the "Chris Gaines gamble" did not work out.

But to reach these levels of focus, is it not likely that other things in life may have to be sacrificed? It is true that highly successful people are driven and focused but do need to remember that this focus often comes at a surprising cost. Alexander the Great was a successful general but would anybody envy his personal life?

All of which is to say that strategies for success are complicated, at best, and that people aren't simple at all. Which, come to think of it, is probably a good starting point for all of these discussions.

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