The word "Gambling" carries with it an extremely negative connotation. From the time we were kids, we've been taught, reinforced with stories, novels and movies that all gamblers meet a dead end, figuratively and literally.
I guess this stems from a misconception of what gambling is and what it means. Gambling is 'Risking". And the truth of the matter is we are all gamblers. We need to be gamblers to be able to live life in a social environment.
Think about this. Isn't every single thing we do a gamble ? Maybe with a low probability of failure and a high probability of success. But does that take away from the fact that its still a risk. A gamble. Walking on the streets. Crossing the road. Driving to work. In each of these scenarios, people lose their lives. Multiple times every single day. And we carry out these activities, daily.
Now that we have established that gambling or risk taking is by itself, a human requirement and that we all are gamblers or risk takers, the question that begs to be asked is, what differentiates the BAD gamblers from the GOOD gamblers. And this where opinions are likely to dramatically differ.
Here's mine. First I think I would divide the gamble we need to take into 2 distinct categories. The first is, gambles around our social lifestyle. And the second is around our working lifestyle. The first is the day to day activities we undertake. And as long as these are relatively low risk, its okay. And so we should go about doing all we would love to and that which enhances our enjoyment of life, and not worry too much about the associated risks.
Its our working lifestyle where our gambling will determine the probability of success or failure. We need to do a simple mathematical calculation in our head. The first is the probability of success or the risk factor versus the quantum of the reward. Let me try and explain this thru a few examples.
Sometimes when I interview people, I ask a question, "How sure are you ?". On most occasions the answer is 100%. Which prompts my next question, "Would you risk your job ? If you're right you get this job, else you don't.". The answer of most people is "No". And here's the catch. They're unwilling to risk something they don't even have. They don't know if they'll get the job anyways. However if they were willing to risk it, then they are guaranteed to get the job, if they're right, which they seem to believe. Its a Win - No lose risk. And you aren't very smart if you don't take it. Which is why, I've immediately made a job offer to those who took that risk, even though on every occasion they were wrong about the question. The logic was simple. This person is willing to take a risk, and that's always a good thing.
A classic example of risk taking is the stock market. Most people who invest in the stock market have no idea about the market. And yet they rush to invest based on the TIPS they get. From the TV channels, the newspapers, friends, colleagues and virtually everyone, including the paper delivery boy. If you bother to check you'll find that the historical return on the stock market is only around 15%. Slightly more than the safer "Fixed Deposits". On the Index stocks. However the Index stocks themselves keep changing and so its likely to be a lot less if you held on to a static set of stocks. In such cases taking a risk is stupid, since you don't know enough. You should therefore either invest in a reputed mutual fund, run by hopefully people who know more than us. Or alternately learn about the equity market, evaluate the same objectively, and then take investment decisions based on a clear understanding and thus a well weighed risk.
And another interesting risk taking is in the work we do. On most occasions, we look for another job or change because we think we'll get more money. Or a slighthly better designation. I'm no HR expert, but I think it may be reasonable to assume that most people who hit big time, have very few job switches. Professional Growth, is fastest when we stay with the same company. This is because there's a sense of confidence that develops between the bosses and ourselves. And most people wouuld rather give opportunities to insiders as opposed to outsiders. Also if we have a great track record, our value increases. The risk of switching jobs therefore is very high. Hence it should be carefully evaluated. Surprisingly, very little thought is given here. Yet another case of lack of understanding of risk.
My conclusion is again very simple. Most people who seem like "Gamblers" or "Risk Takers" are actually some of the most sensible people who carefully evaulate the risk before gambling. And most of the people who seem to be conservative or risk averse, end up gambling with the odds stacked against them. You have no choice. You'll need to be a Gambler. Doesn't it make sense to become a GOOD one ?
And no better advise have I found than the eternal wise words from Kenny Rogers "The Gambler"
I guess this stems from a misconception of what gambling is and what it means. Gambling is 'Risking". And the truth of the matter is we are all gamblers. We need to be gamblers to be able to live life in a social environment.
Think about this. Isn't every single thing we do a gamble ? Maybe with a low probability of failure and a high probability of success. But does that take away from the fact that its still a risk. A gamble. Walking on the streets. Crossing the road. Driving to work. In each of these scenarios, people lose their lives. Multiple times every single day. And we carry out these activities, daily.
Now that we have established that gambling or risk taking is by itself, a human requirement and that we all are gamblers or risk takers, the question that begs to be asked is, what differentiates the BAD gamblers from the GOOD gamblers. And this where opinions are likely to dramatically differ.
Its our working lifestyle where our gambling will determine the probability of success or failure. We need to do a simple mathematical calculation in our head. The first is the probability of success or the risk factor versus the quantum of the reward. Let me try and explain this thru a few examples.
Sometimes when I interview people, I ask a question, "How sure are you ?". On most occasions the answer is 100%. Which prompts my next question, "Would you risk your job ? If you're right you get this job, else you don't.". The answer of most people is "No". And here's the catch. They're unwilling to risk something they don't even have. They don't know if they'll get the job anyways. However if they were willing to risk it, then they are guaranteed to get the job, if they're right, which they seem to believe. Its a Win - No lose risk. And you aren't very smart if you don't take it. Which is why, I've immediately made a job offer to those who took that risk, even though on every occasion they were wrong about the question. The logic was simple. This person is willing to take a risk, and that's always a good thing.
A classic example of risk taking is the stock market. Most people who invest in the stock market have no idea about the market. And yet they rush to invest based on the TIPS they get. From the TV channels, the newspapers, friends, colleagues and virtually everyone, including the paper delivery boy. If you bother to check you'll find that the historical return on the stock market is only around 15%. Slightly more than the safer "Fixed Deposits". On the Index stocks. However the Index stocks themselves keep changing and so its likely to be a lot less if you held on to a static set of stocks. In such cases taking a risk is stupid, since you don't know enough. You should therefore either invest in a reputed mutual fund, run by hopefully people who know more than us. Or alternately learn about the equity market, evaluate the same objectively, and then take investment decisions based on a clear understanding and thus a well weighed risk.
And another interesting risk taking is in the work we do. On most occasions, we look for another job or change because we think we'll get more money. Or a slighthly better designation. I'm no HR expert, but I think it may be reasonable to assume that most people who hit big time, have very few job switches. Professional Growth, is fastest when we stay with the same company. This is because there's a sense of confidence that develops between the bosses and ourselves. And most people wouuld rather give opportunities to insiders as opposed to outsiders. Also if we have a great track record, our value increases. The risk of switching jobs therefore is very high. Hence it should be carefully evaluated. Surprisingly, very little thought is given here. Yet another case of lack of understanding of risk.
My conclusion is again very simple. Most people who seem like "Gamblers" or "Risk Takers" are actually some of the most sensible people who carefully evaulate the risk before gambling. And most of the people who seem to be conservative or risk averse, end up gambling with the odds stacked against them. You have no choice. You'll need to be a Gambler. Doesn't it make sense to become a GOOD one ?
And no better advise have I found than the eternal wise words from Kenny Rogers "The Gambler"
Nice post Sir. I remember I had taken that risk and had lost it, only to get a mail telling me that I was selected. :)
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