I find it odd that I would even stop to consider “odds” – for that’s an oddity in itself, but oddly enough now I’m concerning myself about “odds” and their oddities. The reason for this is that I am going to propose over the next 3 minutes of text lines, 2 if you’re a fast reader, and should you skip this particular blog its a lesson that could take one a whole “lifetime” to uncover. The premise being that one should pay attention to their losing, as this may hold the key to reducing our individual failures, therefore increasing our odds of winning. Fair enough? Or I should say, “oddly” enough?

My premise is built on a notion that (operating in the background) the odds of failure in any given human endeavor way outnumber your odds of success in said endeavor. That this premise holds true most of the time, and for many facets of a life. The entire world is built on “odds” of success vs. odds of failure – odds are behind everything but day-to-day we pay little homage to them. Unless you’ve entered a casino, or a high level math class, or taken an overdose of drugs, or even stepped up to hit a baseball or a golf ball you probably haven’t considered what your odds of success are lately. And if you’re like me (or most people), you probably do not dwell on the subject much, instead preferring to embrace your many wins and their winnings. But what if I propose that the practice of counting only our success (over time) is flawed? What if you began counting your failures instead? People might be aghast at the very thought of it, saying things like – “I can’t harp on my failures, I must keep keeping on until I…” Or can you?

Let’s suppose that you’re employed somewhere and your personal “rate of success” (at whatever you do) averages between 25 to 30%, often times even less. At first glance your reaction might be, “I’d be fired for that – no doubt about it!” I find this fact interesting because in some professions you may be let go for incompetence, but does anyone realize how many professions there are out there that are blooming – really blossoming and growing by ginormous proportions when all the while they only achieve success rates below 30%? It’s absolutely mindblowing how many business successes can be had when regularly operating on less than a 30% rate of success!

Pictured above (in the first column) are the team batting averages of 12 Major League Baseball teams for the 2021 season. The first team listed has a team batting average of just .236 for the season. Interpreted, this means that for every 100 appearances at the plate, the team only produced 23.6 hits on average, or slightly less than 24% of the time were they even successful in obtaining a base hit. That’s a base hit less than one quarter of the time. And realizing how much success and money these professional baseball players and their teams achieve while, at the same time, routinely failing at the plate, well it’s enough to boggle the mind.

Probably the best example – maybe the most exaggerated example of a profession that relies solely on the oddity of small odds is in the world of money management. I personally witnessed the effect of low “odds of success” play out over three decades. Most Wall Street firms have learned to play their high odds of failing quite well, thank you! For example, when these firms hire 20 new advisors, it would be unusual for more than 1 of these new hires to actually make it in that business. Meaning that he or she actually stays in the business and the firm long enough to become a successful contributor to their corporate profits. One out of twenty equates to a 5% success rate and those odds may even be inflated, for I’ve seen rates of success for new hires entering the field at much lower than that, though firm management wouldn’t want to admit it. Still, it’s just the nature of the business. Managing money and building a long list of clients is not an easy task – it’s many times exhausting for you can’t control the client, you can’t control regulatory changes out of Washington, D.C., you can’t control the financial markets, and let’s not forget that you can’t control the decisions that your management team makes either. You have control over only one thing – yourself. So for anyone to say that odds of success are great starting out in that industry would be guilty of a gross over-statement. There were around 160,000 licensed financial advisors across the country working for “real” securities trading firms during the year 2020. Given that and the fact that odds of becoming successful in the world of advising on money is so small, (and hard to crack), probably keeps the number of licensed advisors way lower than it otherwise would be were odds of success much greater. Which in turn, probably keeps the compensation level (as an industry) better than average as well. So I would call that a positive thing overall…

This all leads me to conclude, “What if I begin to count my losses instead of only counting my wins?” I mean, if I have to get past a ton more of perceived failures to earn my next success, it seems only logical/natural to me via the “law of large numbers”, (ref. probability theory), that eventually I will stumble upon what I’m really after – Success!… wouldn’t hurt to try I suppose. 🙂