Have you ever considered that risk and luck are simply opposite sides of the same coin? In an older post, I once wrote about a story shared in Morgan Housel’s book “Psychology of Money” — I will share it here again to illustrate the point.
In 1968, Bill Gates was fortunate enough to attend Lakeside High School — one of the only schoolds in the world that had a computer. This was at a point in history when most schools couldn’t even think of owning a computer.
Luck: In 1968, there were about ~300 million high-school-age students in the world, of which 8 million lived in the US. About 270,000 of them lived in Washington State and just 300 of them attended Lakeside School. So, Bill had literally one in a million chance of attending the high school with a computer.
Risk: Kent Evans was Bill Gates’ close friend, and he shared Bill’s business acumen and ambition. Kent would likely have become one of the founding partners at Microsoft along with Gates and Allen, had it not been for a fatal mountaineering accident just before graduating high school. The odds of dying during a mountaineering accident are also roughly one in a million.
So there you have it… Bill experienced one in a million luck by ending up the school which had a computer, and his mate Kent experienced one in a million risk by never realising what was almost a guaranteed success-story of one person’s life.
Risk and luck are closely related; so what?
Well, the irony is in how we tend to experience the feelings we have, when we face these situations in our daily lives. Quite often, when people experience bad things, they attribute it to the associated risk — i.e. ‘this bad thing happened due to forces outside of ones control’… fine. What about good times, and good fortune? This is where people forget the parts which are ‘outside of ones control’ — Since this is a watch related blog, look no further than the folks who bought watches pre-hype, and then attributed these purchases to their own skill in finding hidden gems, or those companies who had never seen hype and then proceeded to alienate old and loyal customers.
The reason we will always experience cycles, and have done throughout history, is best summed up by this paragraph:
“Hard times create strong men. Strong men create good times. Good times create weak men. And, weak men create hard times.”
G. Michael Hopf, Those Who Remain
In the end, having good times will result in complacency which leads to the destruction of the good times, and the bad times inevitably drive panic-driven problem solving and ingenuity which ultimately lead to… that’s right: good times!
Two main reasons to be optimistic
- In the end, when things get bad enough, people find a way to fix them
- As time passes, we tend to improve upon past achievements and compound on our gains as a species
Take penicillin, for example:
“At the onset of World War II, Penicillium notatum, the mold made famous by Alexander Fleming in 1928, was well recognized for its ability to inhibit the growth of certain bacteria in laboratory experiments. The pharmaceutical popularly known as penicillin, however, did not exist … American officials only began to take the compound’s potential seriously in the summer of 1941 …”
Rethinking Antibiotic Research and Development: World War II and the Penicillin Collaborative
Going further back to the Great Depression, economist Alexander Field writes that “the years 1929–1941 were, in the aggregate, the most technologically progressive of any comparable period in U.S. economic history.” Its true… while The Great Depression brought extreme financial pain, it also brought as a result, supermarkets, microwaves, sun block, jets, rockets, electron microscopes, photocopying, helicopters, colour televisions, commercial aviation, most forms of plastic, synthetic rubber, laundromats, and many other now-ubiquitous discoveries!
There’s a fantastic New Yorker Article about Tony Hawk, and towards the end they go on to describe how he pulled off a stunt which was, at the time, the “holy grail of skateboarding” — a two-and-a-half-revolution midair spin, called the 900. Completing this stunt gave Hawk instant legend status — the funny thing is, after he did it, even kids started completing this stunt successfully, and someone has even surpassed it by completing a 1080 (i.e. an additional 180 degree spin)!
A lot of sports work this way, from the 4-minute mile, to modern marathon records which are just a tad over 2 hours now — fun fact: Eliud Kipchoge has run four of the six fastest marathon times in history!
“The world is not driven by greed; it’s driven by envy.” You see someone accomplish a new feat and think, “I should be able to do that too — and even better.”
- Charlie Munger
Conclusion
This concept of luck and risk seemed relevant right now, in March 2023, because we’re facing uncertain times ahead. With the looming interest rate hikes, the recent crash in the watch market, governments fighting inflation, humanity adapting to a new way of living and working after the pandemic, climate change affecting the frequency of natural disasters… its quite a sh*t show.
What is actually important for people in this hobby of watch collecting, is to stay true to ourselves when it comes to preferences, budgets, and most importantly, the aspects of the hobby which bring us joy. What we saw over the past 2–3 years, is a wave of new ‘collectors’ who joined because of the ability to make quick profits. With these uncertain times, we will hopefully see these same profiteers f*ck off back to where they came from.
What we’re left with is increased availability, lower prices, and hopefully freedom to both enjoy what we have as a group of enthusiasts, and access to pieces which may previously have been too expensive or out of reach. This is a good thing, and I think it is worth celebrating.
Aside from collectors, I think brands need to adapt as well. The days of trying to milk customers with bundle offers are hopefully behind us. For the remaining customers who are wealthy enough to play the bundling game, I would urge you to reconsider. Tell these brands to go f*ck themselves. They cannot continue raising prices for no additional value, while still playing the scarcity game to entice unnecessary spend. The onus is on all of us, the collectors, to stop this mentality and make these executives rethink their approach.
We are going into the next cycle where customer service and client relationships matter. You may remember this old post about Vacheron from September 2021 — they decided that the new hype wave they were enjoying was worth capitalising on, and they alienated so many old and loyal customers… well guess what? It is payback time! It is even worse with brands like Lange, and even true of mainstream ADs like Watches of Switzerland on certain Rolex models as well. I see more people getting GMT allocations, Explorers and other sports models are on shorter wait times… this is the period where you build up your history and establish yourself as a worthwhile client, setting yourself up for the next up-cycle.
In closing — DEMAND that brands and ADs give you the service you deserve — they can no longer act like giving you an allocation is a big favour, and they need to learn something about being humble. Do not feel like you need any watch, and if you are buying something, ask for discounts, for concessions, for free straps — whatever. Make them earn your loyalty. Take your power back, because really… you make your own luck, lol!
F
Originally shared by ScrewDownCrown on 8 March 2023
