The Role of Luck in Business, Investing and Sports

From four-leaf clovers to bad bounces, March is loaded with luck--not all of it good. In his book The Success Equation, Michael J. Mauboussin, head of global financial strategies at Credit Suisse, examines the role of skill and luck in business, investing and sports. We asked him about the method behind his (and March) madness.

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We're now in the big data era, in which everything is calculable. Is there such a thing as luck anymore?
I would take the opposite view--there's more luck than ever. The difference between the very best players and the average players is less today than it was in the past. If skill is more uniform, and luck stays the same, that means luck actually becomes more important in determining outcomes. It's everywhere you look. But one area where you can see it very readily is in sports: In 1941, Ted Williams became Major League Baseball's last player to hit over .400 in a single season. Why has no one been able to do that since? The answer is because skill is much more uniform today.