Goldman Sachs is not lucky to be profitable year-after-year. But you are not Goldman Sachs. They have hard-to-reproduce advantages (“moats”) in terms of social and organisation capital, client and peer relationships, political access, intellectual property, etc, etc. And Goldman Sachs can’t just effortlessly expand—they can’t just decide “Right, let’s make more money, let’s find new arbitrages.” They are at the scale and profitability they are for a reason. And even Goldman Sachs was lucky, to get to its current position. When Goldman Sachs was founded, the odds were against it becoming what it is today. If you found an investment bank today, you are unlikely to be as successful as Goldman Sachs.
Or, to put it in more down-to-earth terms: giving up on your education to become a professional footballer is a bad move for almost everyone, and a very risky move even for the highly talented. This is in no way negated by the fact that Zlatan Ibrahimovic earns millions every single year.
“The odds were against them” doesn’t mean they were lucky. It means they beat the odds. They made their own luck, as the saying goes. Frequentism doesn’t apply here. They are picking winners, not pulling them randomly from an evenly distributed set.
Goldman Sachs is not lucky to be profitable year-after-year. But you are not Goldman Sachs. They have hard-to-reproduce advantages (“moats”) in terms of social and organisation capital, client and peer relationships, political access, intellectual property, etc, etc. And Goldman Sachs can’t just effortlessly expand—they can’t just decide “Right, let’s make more money, let’s find new arbitrages.” They are at the scale and profitability they are for a reason. And even Goldman Sachs was lucky, to get to its current position. When Goldman Sachs was founded, the odds were against it becoming what it is today. If you found an investment bank today, you are unlikely to be as successful as Goldman Sachs.
Or, to put it in more down-to-earth terms: giving up on your education to become a professional footballer is a bad move for almost everyone, and a very risky move even for the highly talented. This is in no way negated by the fact that Zlatan Ibrahimovic earns millions every single year.
“The odds were against them” doesn’t mean they were lucky. It means they beat the odds. They made their own luck, as the saying goes. Frequentism doesn’t apply here. They are picking winners, not pulling them randomly from an evenly distributed set.