Luck vs. Skill
November 2008A friend sent this story to me the other day.
A young man asked an older rich man how he made his money.
The old guy fingered his sweater and said, "Well, son, it was 1934 and in the depth of the Great Depression. I was down to my last dime.
"I invested that dime in an apple. I spent the entire day polishing the apple and, at the end of the day, I sold the apple for fifteen cents.
"The next morning, I invested those fifteen cents in two apples. I spent the entire day polishing them and sold them for 30 cents. I continued this system for a month, by the end of which I'd accumulated a fortune of $1.59."
"And that's how you built an empire?" the boy asked.
"Heavens, no!" the man replied. "Then my wife's father died and left us two million dollars."
A friend and I went to a dinner several months ago. There was a panel discussion and a young CEO-panelist who had cashed out of his business was spouting off all sorts of advice about a variety of topics from leadership to strategy to investing. Quite the sage. A legend in his own mind.
I watched as some in the audience scribbled notes and hung on every word. Eventually one audience member asked the brilliant CEO some specifics about his former company. It turns out that their revenue was insignificant and they never made a dime of profit. My friend and I stood up and left. Careful who you listen to …