Views of Luck: An Important Mental Model

by | Apr 19, 2019


Charlie Munger, Warren Buffett’s business partner, is a big fan of recognizing and using “mental models” to help shape thinking. According to Shane Parrish of Farnham Street,

Mental models are how we understand the world. Not only do they shape what we think and how we understand but they shape the connections and opportunities that we see. Mental models are how we simplify complexity, why we consider some things more relevant than others, and how we reason.

Today’s IFOD is not on “mental models” (that may be a future good one) but rather merely shares a fable that I heard about 15 years ago that I’ve used as a mental model that has had a HUGE positive impact on how I view the world. Enjoy:

There is a Chinese story of a farmer who used an old horse to till his fields. One day, the horse escaped into the hills and when the farmer’s neighbors sympathized with the old man over his bad luck, the farmer replied,

“Bad luck? Good luck? Who knows?”

A week later, the horse returned with a herd of horses from the hills and this time the neighbors congratulated the farmer on his good luck. His reply was,

“Good luck? Bad luck? Who knows?”

Then, when the farmer’s son was attempting to tame one of the wild horses, he fell off its back and broke his leg. Everyone thought this very bad luck. Not the farmer, whose only reaction was,

“Bad luck? Good luck? Who knows?”

Some weeks later, the army marched into the village and conscripted every able-bodied youth they found there. When they saw the farmer’s son with his broken leg, they let him off. Now was that good luck or bad luck?

Who knows?

A quick story in this regard from my own life. Early in the fall semester of my freshman year at TCU I broke my thumb on my writing hand playing football. My hand/arm was immobilized along with my thumb for 8 weeks. It seemed like HORRIBLE bad luck – painful, and worse, I could no longer write with my writing hand. I struggled to take notes with my left hand in class and then just stopped taking notes (which was dumb). I ended up making horrible grades. Which I viewed as bad luck. I didn’t do much better the next semester and ended up getting yanked from TCU. This all seemed to be the end of the world for me. Horrible bad luck (which I mainly brought on myself). I then went to Mizzou, did much better grade-wise, met the love of my life, married her, had great kids AND learned a fantastic lesson. Good luck bad luck who knows?


  1. I saw “it”in action & I say it was good luck with hard labor.

  2. I don’t know John, as I have never met your wife or kids, but it is possible that had you not broken your thumb and left TCU, you would have married someone you loved EVEN more (even more!!), you’d have GREATER kids (greater!!), your car would be bigger (bigger!!) and more expensive (way bigger and way more expensive!!), your house would be nicer (like, seriously, a lot nicer!!), you’d be the CEO of Uber (about to go public!!), etc, etc. My God, the uncertainty of it all, the agony of it all…

  3. aww you think we’re great

  4. Thx for sharing john. Very good advice!

  5. “Good article? bad article? Who knows?”
    Lol, good article, John.

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