Why Luck Doesn't Pay
By Brian DeBlanc
December 5, 2000
[This classic Fribble originally ran on November 18, 1999.]
In today's America, where some unbelievable percentage of adults are planning on winning the lottery as a retirement vehicle, luck's dance ticket gets punched a lot. Casinos are springing up all over the country, and people who would rather not spend the time researching and learning of high quality companies choose instead to speculate on the latest hot stock tip mentioned by their co-workers. Now, almost in retaliation it seems, Lady Luck is tossing many queasy riders off her speculative roller coaster.
I'm not bearish, mind you. Luck is a brand name that virtually everyone recognizes. Her company has mindshare, delivers products from bargain basement to the highest of high-end, and is positioned to keep the customer returning time and time again. Think Pavlovian response: If people could trust their luck to hold every time they called on her, the little darling would eventually fall out of favor. People would become disenchanted with the humdrum old-reliable. But luck is smarter than that. Luck only pans out occasionally, which keeps people checking, over and over, ad infinitum. It's a psychological supply and demand thing. The less luck we have, the higher the premium we place on it. I figure luck will be around, occupying an excellent niche in the market, pretty much forever.
Personally, though, for the most part, I could take it or leave it. Don't get me wrong. I'm as happy as the next person when the bagels are fresh and hot. I'm thrilled as purple punch when the seagulls-of-ill-intent passing overhead miss me by inches with their little gifts. And I'm positively rapturous when I discover a pint of Cherry Garcia in the fridge which I thought was long gone.
But I've never been particularly lucky, and for that I'm grateful. If I put a buck or two on Keno while eating a $2.99 prime rib in Vegas, I know I'll lose it going into the affair. I feel like I'm single-handedly keeping Vegas in the black, which makes me feel like a magnanimous guy. Another example is door prizes. The only way I'm going to win a door prize is if there are enough of them for every single person to get one, and they take winners' names out once they've won a prize. Then I'll pull down a prize.
These are examples of Luck's other side. She's like that guy on the old Star Trek episodes, half black, half white, split down the middle, who would have tremendous fights with himself when in the presence of other overly dramatic actors. It's "bad luck" when you get in a car accident; "tough break" when that hot stock tip loses half its value overnight. Luck is schizophrenic, or at the very least extremely temperamental; sometimes good, sometimes bad. Frank sang it once: she ain't always a lady.
The point is: good or bad, it's all luck. The same karmic flaw that keeps me from pulling down a few bucks while eating on the cheap in Vegas may also keep me from getting creamed by a Mack truck when I leave work this afternoon. I know it's the same flaw that keeps me in the air when I fly, because only one in some ridiculously large number of flights actually goes down, and I ain't that lucky! Did I worry when the doctor said my knee repair carried a one-in-50,000 chance of infecting me with something life-threatening? Not at all! I've never been one-in-50,000!
Good or bad, it's all luck. In the investing world, I'd just as soon take the time, learn about the companies, then invest in those that I believe have solid prospects for the future. Because luck ain't always a lady.