Book review: “The success equation – Michael Mauboussin”

The subtitle of the book claims the following: “Untangling Skill and Luck in Business, Sports, and Investing”

As being able to distinguish between luck and true skill is quite an important issue especially in investing, I was really curious to read the book.


Mauboussin really does a good job to look at this from several perspective, like sports, business and investing and how to place this activities on what he calls the “luck – skill continuum”.

The relationship between luck and skill then is important for instance if you want to test something statistically. The larger the part of luck, the more observations you should use to make statistical assumptions. So Buffet’s famous “investors of Graham and Doddville” would not qualify as statistically relevant in this regard, because only using a handful of examples for an activity with a lot of luck involved is not significant.

Another implication is that when you try to assess mean reversion, activities with a lot of luck involved will move quicker back to the mean compared to activities with mostly skill.

He mentions also some interesting aspects with regard to strategy. As an underdog you might prefer to complicate a certain competitive situation, as this increases the potential “luck” percentage in outcomes. Very simple games with uneven opponents do not leave a lot of room for luck.

Investing is for the author an activity with a lot of luck involved, at least in the short-term. The best mitigation in his opinion is a coherent investment process.


All in all it is a quite interesting read with many interesting stories. However, I have one big “quibble”: The day after reading the book, I did hardly remember any specific details. I had to kind of speed read again to actually being able to write this summary.

So for some reason, the content of the book seems not to stick with me. I had the same problem with “Think twice”. Well written book, but nothing that really sticks. Also, I was a little bit disappointed that as an investor, you don’t gain a lot of insight.

I am not sure why this is the case, maybe Maubousin should have concentrated more on specific areas instead of jumping between sports, management and investing.

So if you want to have a well written book about diverse topic you might consider buying it. If you are looking for a book that might qualify as an investment classic, save your money.


  • Hi mmi,
    as I read the phrase “the content of the book seems not to stick with me” is for me an indicator that the content might be in conflict of your perception of the world therefore it is denial by your subconscious. I do not know you, it was my first thought as I read your article and probably I am wrong with that guess because I might be over sensitive through studying personal biases lately.

    • hmmm, no I don’t think that’s the case. I agreed with almost all of the stuff in the book, however there was no tangible tae away, at least not for me. Maybe I am not clever enough ?

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