Tuesday, January 15, 2008

Know When Not to Fold

I played blackjack yesterday, and the experience turned into a valuable object lesson about the relative importance of protecting against downside and going for upside. I started with $500. It grew pretty quickly into $900, diminished (even more quickly) into $200, stabilized and then, in one of those beautiful runs that gamblers live for (like the occasional strong, true golf swing that shows golfers how it's supposed to feel and keeps them coming back for more), mushroomed into $1400.

Had the original $500 reached $1000 instead of $900, I would have invoked my "double your money; go home" rule. When the $900 started hemorrhaging, I thought about stanching the bleeding at the original $500. After deciding against that and watching the $900 shrink all the way to $200, I probably should have taken the money and run the minute I recovered that original $500. But I'm stubborn - I hate to "give up" gains I once had, and breaking even doesn't do it for me. My conviction that the good luck will return is always stronger than my fear of the admittedly more likely recurrence of the bad luck. So I stayed in the game and ended up winning big.

The parallels to career and, I suppose, to life as well are obvious. There's an element of chance in every arena. You can limit its impact by knowing your stuff - learning how to play, developing the required core competencies, practicing, continuously improving, and the like. But you can't eliminate the element of chance. You have to learn how to ride it instead. It's important to protect against the downside, but it's more important to dream big about the upside. You'll limit your upside if you leave too soon, whether at the first signs of adversity or because your dreams are too small. If you're too afraid of the downside to stay in the game, you won't win. And while not losing is better than losing, it isn't the same as winning - not in blackjack or in anything else.

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