#111 - Fortunate
Martingale, bold brits, and a stacked deck
Boldness is underrated I think.
They say: Fortune favours the bold. And they’re right.
But we don’t truly appreciate that. Especially us Brits.
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Martingale
Bold has a bad reputation in the UK. It’s viewed with a mild disdain. Rather too American perhaps.
But that’s a mistake. I suspect the bold just see reality more clearly. What one sees as bold another sees as obvious.
Part of the problem is the blur between bold and rash. But they are different.
Let’s start with rash.
Where better to find rash behaviour than a casino. Or around a roulette wheel to be specific. My misspent youth can attest.
In roulette there’s something called the Martingale System. It goes something like this:
Place a bet, one unit say, on red or black. Two possible results:
Win - you’ve won one unit. Start again.
Lose - you’ve lost one unit. Double your bet next go.
Every time you lose you double your bet. That way, when you eventually win (hopefully), you cover the preceding loses + a make a profit of one unit.
You walked away with £50. Happy days. You seemingly can’t lose.
Oh but you can.
John Maynard Keynes’ old saw comes to mind:
“Markets can remain irrational longer than you can remain solvent”
Solvency is your problem. If you had an unlimited bank roll then sure, you’re good. But you don’t and neither do I.
Surely it can’t be another red?
Play the Martingale System for a while and you quickly see the danger.
I bet our player above was feeling the heat by turn 4.
The rash player is destined for a blow up. Bet the house enough and you will lose it. That’s for sure.
No, bold is not rash. It’s something different.
Bold Brits
There are bold Brits. Richard Branson comes to mind.
He’s spent over 50 years making big bets, and he has a lot to show for it.
But he’s been careful. Much more than it appears at first glance.
There’s a great story about the birth of Virgin Atlantic, his airline. Of all his big bets launching an airline is near the top. Music exec to airline mogul.
Certainly bold.
The airline industry is notoriously difficult. Yet, covid struggles aside, he pulled it off. All because he covered his back. Here’s wikipedia’s take:
Part of Richard Branson's declared approach to business is to either succeed within the first year or exit the market; this ethos includes a one-year limit being expressed upon everything associated with starting up operations.
Virgin Atlantic became profitable within the first 12 months, aided by sister company Virgin Records' ability to finance the lease of a secondhand Boeing 747.
The firm had timed its operations to take advantage of a full summer, from June to September, which was typically the most profitable period of the year.
He kept it simple. A lease of a 2nd hand aircraft. If it failed Boeing got their plane back & Branson goes back to records.
Branson succeed because he understood the game. To the outsider, he was rash. But he knew better.
A Stacked Deck
The bold understand the rules.
Superior comprehension breeds confidence. Which, in turn, breeds bold action.
Take Bezos & Amazon. Famous for not making bet the company plays. And yet few have been bolder. He understood his game better than anyone.
Now there’s a caveat, of course.
The line is fine. One can spend years on the right side until hubris drives them to the wrong. Many of boldest are found to be playing Martingale Systems all along.
Napoleon is the perfect example.
A meteoric rise built on breathtaking boldness. But in hindsight he just kept doubling his bets. The fall was inevitable.
Truly bold action is a stacked deck. Even if you lose you win.
Every failure in the early days of Amazon? Priceless learnings and the chance to do better next time. It wasn’t as risky as it looked.
And as for you?
I can’t tell you where that line is, between bold and rash.
But I’ve bet you’ve got room. I certainly do.
So learn the game. Figure out what’s really going on. The more you learn, the more you’ll see:
Fortune really does favour the bold.
My Week in Books📚
The Romantic by William Boyd
Any Human Heart by Boyd is one of my favourite. This is in much the same vain: A chronicle of a fictional life. There’s something very humbling about that format. A view of the fleeting nature of it all. Very good.
God is an Octopus by Ben Goldsmith
A deep book. About the grief of losing his 15 year old daughter & finding solace in rewilding. Beautifully told.
Thanks Ma for the recommendation!
Book recommendations welcome & encouraged. Just hit reply! 🙏
Unplugged Latest 🌳📵
The power of walking (+1 for walking)
A Final Thought 💡
“Whatever you can do, or dream you can, begin it. Boldness has genius, power and magic in it.”
- Johann Wolfgang von Goethe
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