Good Luck doesnt mean expertise

[Truly Exotic]

Recently ive noticed in my dealings with both professional and personal friends/contacts/clients a certain phenomenon. I didnt notice it last time, but it seems more apparent now

People that bought admittedly in what is a good area and timing in hindsight without any research, strategy or thinking, who have experienced great growth esepcially in sydney and west sydney, who now proclaim to be property experts.

Now this is not a common phenomenon however, ive noticed that a lot of these people that have gained up to 50% in 2-3 years are now looking and expecting for similar results by investing in other areas, lets say melbourn or brisbane

That is a natural reaction in human nature, however what I am noticing is a high degree of arrogance in their mindsets now. Comments such as 'Oh I think im going to become a buyers agent' even though they dont know the fundamentals of real estate, through pot luck.

I also hear comments like 'oh we bought in west sydney, we gained 50%, they bought in melbourne, they only gained 25%, had they listened to us, theyd be much better off'

to

'oh it must be pretty easy being a buyers agent, we might try that too, oh btw where do you think the next good place to buy is????'

so just a reality check for people that good results doesnt mean good investment skills

 

[Terry_w]

Yes, I come across this sort too.

But also the opposite type. I have one made who carefully chose a property, took a huge risk, sub-divided and made $1mil in 12 months, but others class him as 'lucky'.

 

[pasey25]

Agree with the OP, since these people had no idea of the risks and their consequences, just managed to fall blindly into a good situation. In Terry's case above, its interesting to define what luck really is. The person who made $1m in 12 months, took calculated risks which payed off.

You might say that luck was involved in the fact that these risks didn't eventuate.

Risk is often measured by possible impact & likelihood. Not every risk can be mitigated by your actions. Those that can't, but have a high possible impact and likelihood are potentially very high risk. Sometimes these have the biggest possible payoff, but not due to your action, just the risk not eventuating. Is that luck?

 

[TMNT]

investment is a gamble, alabeit a calculated one,

when you buy something and it goes up even though it was very very likely to go up, eg start of a boom, its still luck to a certain extent

 

[see_change]

It's called survivorship bias .

If 10,000 people started trading in the share market with 10 k , chances are that someone will make 1 mill . That person can then write a book called .

" how I made 1 million from 10 k trading the market in 1 year " ....

Although that has a name , I've also noticed another sort of expectation . If people are successful in one area , whether it's in their profession as a lawyer or in a field like investing , they forget the amount of work they put into succeeding and assume they can be automatically successful in other areas .

I've seen this outside the forum , but after the last boom on the forum , several successful members went in to other ventures , invested in businesses and I can't recall one really good success story . Quite the opposite . We looked at something's going around and after some pretty superficial DD , couldn't find one which we thought was worth the risk .

Actually , there were some members who appear to be successful mortgage brokers and Jacques and Andrew Allen who appear to be doing well as buyers agents , but both of those are quite thoughtful , thorough and ethical people. ( IMHO )

Cliff

 

[Blacky]

I don't believe in 'luck' per se.

Those people who purchased made a decision with the information available - which was the 'right' decision at the time. With 100% hind site - it turns out to also be a good decision.

I remember reading a bunch of research papers which looking into the decision making process, and the decisions made by both 'lower' and 'upper' level managers. Almost all come to the same conclusions when they hold the same level of information.
Decisions are made, and the only difference between 'good' decisions and 'bad' decisions - is the amount of work required in order to produce the desired outcome.
Even terrible decision makers, can create their success it just takes a lot more effort than those who appear to be 'lucky'.

With the information we have to hand we always make the right decision. In hind site - that is - with additional information we may have made a different decision.

Blacky

 

[travelbug]

Yeah, I've been told I was just lucky that I started buying at the right time (2009). I actually made a great CG before the boom (some manufactured) and achieved my goal. The boom was an added bonus.

I think it's hilarious that there are some on here that wrote a book after 2 years of investing (without mentioning on here or in their book what they bought or how they are now retired). They could be on the dole for all we know.

And that others with a few years experience that start businesses to help newby investors. OK good on them for having the confidence to think they know enough to help others but - really!!

 

[Deltaberry]

Yea good points. Also true that it's a big step to commit to an investment. A lot of people by the same token overanalyse and never take action, even though they'd also proclaim to be experts.