In 1962, an unknown guy in an unknown town started a little business that was...well, unknown.
Today, everyone knows his name: Sam Walton. The business is Wal-Mart.
Who predicted his success? I doubt even Sam Walton himself knew what lay ahead. In 1962, the giants of the retail market in the US were Montgomery Ward (it went bankrupt) and Sears (it got beat by K-Mart, which went bankrupt). No wonder Sam Walton was famous for down-to-earth humility. He surely realized how improbable his success really was.
Any rational human surveying the retail business in 1962 would have said Wal-Mart had no chance. And he would have been wrong. Rational, but wrong.
Many times in business, we are faced with the impact of highly improbable events, what you might call the defeat of reason. This is the subject of two intriguing books, Fooled by Randomness and The Black Swan, by Nassim Nicholas Taleb.
All too often, we see more certainty in numbers than is really there. This is especially true in accounting and stock prices. Math makes things manageable, but it does not make them predictable. At least not as predictable as events in physics or chemistry.
For more on Taleb, check out a discussion of his work in The Economist and an interview on NPR.
Article in The Economist
NPR interview
Today, everyone knows his name: Sam Walton. The business is Wal-Mart.
Who predicted his success? I doubt even Sam Walton himself knew what lay ahead. In 1962, the giants of the retail market in the US were Montgomery Ward (it went bankrupt) and Sears (it got beat by K-Mart, which went bankrupt). No wonder Sam Walton was famous for down-to-earth humility. He surely realized how improbable his success really was.
Any rational human surveying the retail business in 1962 would have said Wal-Mart had no chance. And he would have been wrong. Rational, but wrong.
Many times in business, we are faced with the impact of highly improbable events, what you might call the defeat of reason. This is the subject of two intriguing books, Fooled by Randomness and The Black Swan, by Nassim Nicholas Taleb.
All too often, we see more certainty in numbers than is really there. This is especially true in accounting and stock prices. Math makes things manageable, but it does not make them predictable. At least not as predictable as events in physics or chemistry.
For more on Taleb, check out a discussion of his work in The Economist and an interview on NPR.
Article in The Economist
NPR interview
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