Crazy Idea No 5 : Investment success = Luck + Hard work + emotional readiness

Oaktree Capital's chairman Howard Marks in his memo , "Getting Lucky." has put across an interesting perspective on the role of luck in investing.

Marks writes, "Investment success isn't just a question of whether the investor put together the 'right' portfolio, but also whether it encountered a beneficial environment.  Thus being successful requires a significant degree of luck.  No one gets it right every time.  (That's why even the best investors diversify, hedge and/or limit their use of leverage.)  But the skillful investor is right more often, over a long period of time, than an assumption of randomness would permit.  We say about such investors, 'it can't be luck.'"

Another interesting take on "Luck" is  "Outliers " a book by Malcom Gladwell . 10000 hours was highlighted as minimum one needs to practice any skill to be more lucky than the rest. That means for 5 years one needs to practice  5 days a week X 8  hours to reach   "GETTING LUCKY" skill level. 

So one can get lucky in investing  by practicing investing for 10000 hours ?? Well my take is MAY BE .

This is because while 10000 hours is necessary condition for being lucky , but its is not the only condition  . The magic of 10000 hours works only if you have 

1) Basic aptitude and interest for the skill you are pursuing 

2) Emotionally you are ready to being lucky 


10000 hours of practice if forced upon by parents / employer or external forces may not ignite " Genie of luck "  as much as if the 10000 hours of hardwork was directed to skill that your heart wants to learn .  Hence LOVE what you do , and do what you love is the first principle for getting Lucky .If investing is not gives you a kick find someone who loves to Invest : check his/ her integrity , see if he has 10000 hours of experience , then bet on him/her 

Emotional Readiness is building emotional strength for play the game . The right mix of courage , caution and speed is necessary for investment success . While 10000 hours of practices helps one to get over 90% of uncertainties related to investing , for that 10% of events ( in cricket lingo  to face googlies ; bouncers ) one need to be emotionally ready and have right temperament  .

Well then who said Investing is easy ??