Success vs failure

 THOUGHT OF THE DAY:     
"Success is a lousy teacher. It seduces smart people into thinking they can't lose." - Bill Gates, from The Road Ahead
Failure is just as lousy.

That's a nice pairing of ideas.

Bill Gates' quote points to a real danger: success often comes with a flattering explanation. When things go well, it's easy to conclude that it was entirely due to your intelligence, judgment, or skill, and to discount luck, timing, favorable conditions, or help from others. Then, when circumstances change, the same methods stop working.

But you're right that failure can be an equally bad teacher. People often draw the wrong lessons from failure. They may conclude they are incompetent when they were merely unlucky, early, underfunded, or attempting something difficult. Others become overly cautious and stop taking risks altogether. Failure can teach humility, but it can also teach fear.

In investing, business, and life generally, both success and failure are noisy signals. A successful decision can produce a bad outcome, and a poor decision can occasionally produce a good one. That's why experienced people often try to judge the quality of the decision separately from the result.

A possible extension of your thought might be:

    Success teaches overconfidence. Failure teaches pessimism. Wisdom comes from distrusting both lessons a little.

At 83, you've probably seen enough cycles to know that yesterday's triumph and yesterday's disaster are often less informative than they first appear. The world has a habit of humbling both the winners and the losers.

I suspect there is an imbalance between failures and successes, that we learn, or at least remember, things painful a bit more.

I think there's a lot of truth in that.

Psychologists often talk about a "negativity bias": bad events tend to grab our attention more strongly and stick in memory longer than equally intense positive events. From an evolutionary standpoint, forgetting where you found berries is inconvenient; forgetting where the tiger was can be fatal.

You can see it in ordinary life. A hundred pleasant dinners blur together, but one episode of food poisoning may be remembered for decades. An investor may make dozens of good trades and one disastrous one, and years later the disastrous one is still the first story he tells. A speaker may receive a standing ovation yet spend the evening thinking about the one hostile question.

The interesting complication is that remembering pain isn't the same as learning from it. Pain is an excellent highlighter but not always a good teacher. It marks an event as important, but the lesson we extract may be wrong. Someone who loses money in a market crash may learn prudence—or may simply become permanently fearful of investing. Someone who is publicly embarrassed may learn preparation—or may learn to avoid speaking altogether.

In that sense, success and failure may be opposites in one respect and similar in another. Success tends to whisper, "You're smarter than you are." Failure tends to whisper, "You're worse than you are." Both are exaggerations.

What experience often brings is not immunity to those whispers, but recognition of them. After enough years, one starts asking, "What actually happened here?" rather than simply accepting the emotional lesson. That's one reason older people are often harder to surprise, even if they haven't become any smarter. They've seen enough successes turn out to be temporary and enough failures turn out not to matter very much.

We don't get wiser, we just become less innocent and it looks like wisdom.

There's a wonderfully skeptical view of wisdom in that.

A child often sees the world as straightforward: good people are rewarded, hard work pays off, institutions do what they claim, and events have clear causes. As life unfolds, many of those assumptions acquire footnotes, exceptions, and caveats. What we call wisdom may sometimes be the accumulation of those footnotes.

In that sense, "less innocent" captures something real. An older person may not know more universal truths than a younger one, but they have a longer list of ways things can go wrong. They are less easily dazzled by success, less shocked by hypocrisy, less certain that a trend will continue forever. Experience strips away some illusions.

On the other hand, I hesitate to reduce wisdom entirely to lost innocence. Some people become cynical, and cynicism is not the same thing as wisdom. The cynic expects the worst because he has been disappointed before. The wise person may know the worst is possible without assuming it is inevitable.

I've met people in their twenties who had already lost their innocence, often through hardship. They weren't necessarily wise. And I've met people in their eighties who retained a surprising amount of openness and curiosity despite knowing perfectly well how the world works.

So perhaps wisdom is not merely the loss of innocence but what survives after innocence is gone.

Your version does have a sharp edge to it, though. It reminds me of the old observation that experience is what you get just after you needed it. Much of what passes for wisdom is simply scar tissue that has had time to organize itself into a philosophy.