Barry Ritholtz, a finance professional with nearly three decades of experience, has undergone a significant evolution in his thinking regarding success. Initially downplaying the role of serendipity, Ritholtz now recognizes luck as a far weightier and more meaningful factor than he once believed. This realization stems from years of observing the financial world and conducting extensive interviews for his ‘Masters in Business’ podcast.
The Shifting Perspective on Luck
Ritholtz, who has been working in finance since 1996, notes that his views on various aspects of the industry, from indexing and trading to private equity and technology, have evolved. However, the most substantial belief shift has been his re-evaluation of ‘Luck.’ He explains that the human inclination is to desire an orderly world governed by cause and effect, where effort, intelligence, and skill directly translate into positive outcomes. The adage ‘hard work is its own reward’ is a common sentiment, but Ritholtz argues that ‘random events can and do lead to unanticipated outcomes that drive much of what occurs.’ He cautions that to ‘underestimate fortune, randomness, and chance at our own peril.’
Insights from 650 Interviews
Over the past 12 years, Ritholtz has hosted the ‘Masters in Business’ podcast, interviewing approximately 650 notable guests, including Nobel laureates, CEOs, billionaires, and venture capitalists. He recounts an initial dismissal of early mentions of luck by billionaires as ‘false humility.’ However, after repeated acknowledgments of fortune from diverse and successful individuals, he could no longer ignore the pattern.
Howard Marks on ‘Table Stakes’
A particularly instructive conversation was with Howard Marks, Chairman of Oaktree Capital. When Ritholtz initially questioned Marks about the role of luck, emphasizing intelligence, hard work, and perseverance, Marks responded, ‘Everybody in my MBA class at the University of Chicago was very smart and very hard working. But hard work and intelligence are mere table stakes. Not everybody has fortune smile on them; not everybody gets lucky.’ This candid response was pivotal for Ritholtz, prompting him to re-examine his own career and the influence of good fortune.
Personal Anecdotes of Serendipity
Ritholtz illustrates his point with several personal examples:
- Calling the Market Bottom in 2009: Ritholtz attributes his timely call to market the bottom in March 2009, in part, to his wife’s teaching schedule. Being on vacation when the market hit his target of ‘Dow 6,800’ allowed him to quietly process the situation. His subsequent ‘Cover Your Shorts and Go Long’ missive, sent on a Sunday evening, was followed by an invitation to appear on TV the next day, which happened to be the exact day of the market lows. This led to numerous requests to manage substantial sums of money.
- Meeting Josh Brown: A chance encounter at a conference in Coronado Island, where Ritholtz sat by a young Josh Brown by the pool, led to Ritholtz recognizing Brown’s potential and facilitating his move from the sell-side to the buy-side.
- Launching Ritholtz Wealth Management: The firm’s launch in September 2013 was driven by Ritholtz’s frustrations with working for others and Wall Street’s client money management practices. Coinciding with the start of a new bull market, which has since become one of the best 15-year periods for returns (2010-2025), was described as ‘pure chance.’
- Personal Milestones: Ritholtz also cites meeting his wife at his High School Senior Prom and his early adoption of blogging in 2003 via Six Apart’s ‘Typepad’ (named after William Goldman’s book ‘The Big Picture’) as instances of fortunate, unplanned events.
- Financial Crisis Insights: His mother’s career as a real estate agent led him to track housing data closely in the 2000s, enabling him to identify the real estate-driven, low-rate economy. This insight formed the basis for his book ‘Bailout Nation,’ which in turn led to a Washington Post column, a Bloomberg View column, and ultimately, the ‘Masters in Business’ podcast.
Beyond ‘Making Your Own Luck’
Ritholtz critiques common aphorisms about luck, such as ‘Luck is where preparation meets opportunity’ and ‘You make your own luck.’ He finds the latter contradictory, as luck, by definition, is outside one’s control. He also questions the notion of increasing one’s ‘surface area for luck,’ suggesting it often boils down to hard work and persistence, which are not inherently luck.
Ten Principles for Professional Success
While acknowledging the uncontrollable nature of luck, Ritholtz offers ten principles that he believes have helped him ‘get lucky’ professionally:
- Curiosity: Genuine interest in diverse subjects.
- Effort: Working harder than others.
- Mastery: Deeply developing expertise in a chosen field.
- Auto-Didact: Voracious reading and self-learning.
- Forward-looking: Focusing on current skills over past academic credentials.
- Add Value: Creating something others desire and will pay for.
- Network: Building genuine connections and offering help.
- Specialize: Developing a sharp, honed skillset.
- Be Prepared: Ready for unexpected opportunities.
- Serendipity: The ultimate, unquantifiable element of being lucky.
Ritholtz concludes that while hard work, skill, and perseverance are essential ‘table stakes’ for entering the arena, ultimately, one still needs fortune to smile upon them. He shares these principles as what has worked for him, hoping they may benefit others in their professional journeys.
