The Importance of Survival in Asset Management

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The principle would be that survival matters a lot for performance. How much? And I make an example with a few numbers, very simple example. If my cousin breaks his leg in the first race, he cannot participate to the following ones and he has no chance of winning them. So that example shows just how important he survived. The longer your time horizon, the more survival becomes predominantly important with respect to performance. But as somebody who spent a career in asset management, I have to know all about them and think about them deeply.

Why is hard work a form of laziness? Why should we be wary of short-term success? How can imagining parallel worlds help us make better decisions? Author, management advisor, and researcher Luca Dellanna joins us to discuss these questions and more!

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Show Notes:

Ergodicity: survival is king
Why sample size matters
The two types of competitors
Teaching by signaling
The parallel worlds approach to decision-making
Racing to the bottom
Why working hard can be a form of laziness
The three things managers should prioritize
Why desiring change isn’t enough
Fighting avoidance with actionable small steps
“Mixed values produce mixed results”
Thinking by writing
What Luca has learned from living in multiple countries
Luca as Emperor of the World
MORE!

Books Mentioned:

Antifragile: Things that Gain from Disorder; by Nassim Nicholas Taleb
What Works on Wall Street; by Jim O'Shaughnessy
Ergodicity: Definition, Examples, And Implications, As Simple As Possible; by Luca Dellanna
The Control Heuristic: The Nature of Human Behavior; by Luca Dellanna
100 Truths You Will Learn Too Late; by Luca Dellanna
Tao Te Ching; by Lao Tzu