This speech is up there with Steve Job’s Stanford Commencement speech. Thanks to my awesome sister who forwards me these thigns.
“Don’t Eat Fortune’s Cookie”
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June 3, 2012 — As Prepared< ?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
(NOTE: The video of
speech as delivered is available on the Princeton YouTube channel.)
Parents of the Class of 2012. Above all, Members of the Princeton Class of
2012. Give yourself a round of applause. The next time you look around a church
and see everyone dressed in black it’ll be awkward to cheer. Enjoy the moment.
Thirty years ago I sat where you sat. I must
have listened to some older person share his life experience. But I don’t
remember a word of it. I can’t even tell you who spoke. What I do remember,
vividly, is graduation. I’m told you’re meant to be excited, perhaps even
relieved, and maybe all of you are. I wasn’t. I was totally outraged. Here I’d
gone and given them four of the best years of my life and this is how they
thanked me for it. By kicking me out.
At that moment I was sure of only one thing: I
was of no possible economic value to the outside world. I’d majored in art
history, for a start. Even then this was regarded as an act of insanity. I was
almost certainly less prepared for the marketplace than most of you. Yet
somehow I have wound up rich and famous. Well, sort of. I’m going to explain,
briefly, how that happened. I want you to understand just how mysterious
careers can be, before you go out and have one yourself.
I graduated from
without ever having published a word of anything, anywhere. I didn’t write for
the Prince, or for anyone else. But at
studying art history, I felt the first twinge of literary ambition. It happened
while working on my senior thesis. My adviser was a truly gifted professor, an
explain how the Italian sculptor
actually totally beside the point, but I’ve always wanted to tell someone. God
he helped me to become engrossed. More than engrossed: obsessed. When I handed
it in I knew what I wanted to do for the rest of my life: to write senior
theses. Or, to put it differently: to write books.
Then I went to my thesis defense. It was just
a few yards from here, in McCormick Hall. I listened and waited for
to say how well written my thesis was. He didn’t. And so after about 45 minutes
I finally said, “So. What did you think of the writing?”
“Put it this way” he said.
“Never try to make a living at it.”
And I didn’t — not really. I did what everyone
does who has no idea what to do with themselves: I went to graduate school. I
wrote at nights, without much effect, mainly because I hadn’t the first clue
what I should write about. One night I was invited to a dinner, where I sat
next to the wife of a big shot at a giant Wall Street investment bank, called
Salomon Brothers. She more or less forced her husband to give me a job. I knew
next to nothing about Salomon Brothers. But Salomon Brothers happened to be
where Wall Street was being reinvented—into the place we have all come to know
and love. When I got there I was assigned, almost arbitrarily, to the very best
job in which to observe the growing madness: they turned me into the house
expert on derivatives. A year and a half later Salomon Brothers was handing me
a check for hundreds of thousands of dollars to give advice about derivatives
to professional investors.
Now I had something to write about: Salomon
Brothers. Wall Street had become so unhinged that it was paying recent
fortunes to pretend to be experts about money. I’d stumbled into my next senior
I called up my father. I told him I was going
to quit this job that now promised me millions of dollars to write a book for
an advance of 40 grand. There was a long pause on the other end of the line.
“You might just want to think about that,” he said.
Brothers 10 years, make your fortune, and then write your books,” he said.
I didn’t need to think about it. I knew what
intellectual passion felt like — because I’d felt it here, at
— and I wanted to feel it again. I was 26 years old. Had I waited until I was
36, I would never have done it. I would have forgotten the feeling.
The book I wrote was called “Liar’s
Poker.” It sold a million copies. I was 28 years old. I had a
career, a little fame, a small fortune and a new life narrative. All of a
sudden people were telling me I was born to be a writer. This was absurd. Even
I could see there was another, truer narrative, with luck as its theme. What
were the odds of being seated at that dinner next to that Salomon Brothers
lady? Of landing inside the best Wall Street firm from which to write the story
of an age? Of landing in the seat with the best view of the business? Of having
parents who didn’t disinherit me but instead sighed and said “do it if you
must?” Of having had that sense of must kindled inside me by a professor
of art history at
This isn’t just false humility. It’s false
humility with a point. My case illustrates how success is always rationalized.
People really don’t like to hear success explained away as luck — especially
successful people. As they age, and succeed, people feel their success was
somehow inevitable. They don’t want to acknowledge the role played by accident
in their lives. There is a reason for this: the world does not want to
acknowledge it either.
I wrote a book about this, called
“Moneyball.” It was ostensibly about baseball but was in fact about
something else. There are poor teams and rich teams in professional baseball,
and they spend radically different sums of money on their players. When I wrote
my book the richest team in professional baseball, the New York Yankees, was
then spending about $120 million on its 25 players. The poorest team, the
about $30 million. And yet the
team was winning as many games as the Yankees — and more than all the other
This isn’t supposed to happen. In theory, the
rich teams should buy the best players and win all the time. But the
something out: the rich teams didn’t really understand who the best baseball
players were. The players were misvalued. And the biggest single reason they
were misvalued was that the experts did not pay sufficient attention to the
role of luck in baseball success. Players got given credit for things they did
that depended on the performance of others: pitchers got paid for winning
games, hitters got paid for knocking in runners on base. Players got blamed and
credited for events beyond their control. Where balls that got hit happened to
land on the field, for example.
Forget baseball, forget sports. Here you had
these corporate employees, paid millions of dollars a year. They were doing
exactly the same job that people in their business had been doing forever.
In front of millions of people, who evaluate their every move. They had
statistics attached to everything they did. And yet they were misvalued —
because the wider world was blind to their luck.
This had been going on for a century. Right
under all of our noses. And no one noticed — until it paid a poor team so well
to notice that they could not afford not to notice. And you have to ask: if a
professional athlete paid millions of dollars can be misvalued who can’t be? If
the supposedly pure meritocracy of professional sports can’t distinguish
between lucky and good, who can?
The “Moneyball” story has practical
implications. If you use better data, you can find better values; there are
always market inefficiencies to exploit, and so on. But it has a broader and
less practical message: don’t be deceived by life’s outcomes. Life’s outcomes, while
not entirely random, have a huge amount of luck baked into them. Above all,
recognize that if you have had success, you have also had luck — and with
luck comes obligation. You owe a debt, and not just to your Gods. You owe
a debt to the unlucky.
I make this point because — along with this
speech — it is something that will be easy for you to forget.
I now live in
A few years ago, just a few blocks from my home, a pair of researchers in the
psychology department staged an experiment. They began by grabbing students, as
lab rats. Then they broke the students into teams, segregated by sex. Three
men, or three women, per team. Then they put these teams of three into a room,
and arbitrarily assigned one of the three to act as leader. Then they gave them
some complicated moral problem to solve: say what should be done about academic
cheating, or how to regulate drinking on campus.
Exactly 30 minutes into the problem-solving
the researchers interrupted each group. They entered the room bearing a plate
of cookies. Four cookies. The team consisted of three people, but there were
these four cookies. Every team member obviously got one cookie, but that left a
fourth cookie, just sitting there. It should have been awkward. But it wasn’t. With
incredible consistency the person arbitrarily appointed leader of the group
grabbed the fourth cookie, and ate it. Not only ate it, but ate it with gusto:
lips smacking, mouth open, drool at the corners of their mouths. In the end all
that was left of the extra cookie were crumbs on the leader’s shirt.
This leader had performed no special task. He
had no special virtue. He’d been chosen at random, 30 minutes earlier. His
status was nothing but luck. But it still left him with the sense that the
cookie should be his.
This experiment helps to explain Wall Street
lots of other human behavior. But it also is relevant to new graduates of
have been appointed the leader of the group. Your appointment may not be
entirely arbitrary. But you must sense its arbitrary aspect: you are the lucky
few. Lucky in your parents, lucky in your country, lucky that a place like
Princeton exists that can take in lucky people, introduce them to other lucky
people, and increase their chances of becoming even luckier. Lucky that you
live in the richest society the world has ever seen, in a time when no one
actually expects you to sacrifice your interests to anything.
All of you have been faced with the extra
cookie. All of you will be faced with many more of them. In time you will find
it easy to assume that you deserve the extra cookie. For all I know, you may.
But you’ll be happier, and the world will be better off, if you at least
pretend that you don’t.
Never forget: In the nation’s service. In the
service of all nations.
And good luck.
Alan’s favorite books / authors
The test is what books come off the top of my mind.
I love Science Fiction. I love audio books (http://www.audible.com/). I now have a Kindle but haven’t tried it yet.
Top 5 Sci Fi is easy.
1. Dune, by Frank Herbert - read the entire series but really only the first book is worth it
3. Foundation, by Isaac Asimov - Asimov’s Robot series is what made me study Electrical Engineering, hoping to design the next robot. I didn’t learn until Junior year in college that CS / AI was probably closer to what I wanted to do, but by then, I was too far into my EE program to change.
4. Snow Crash (Bantam Spectra Book) by Neal Stephenson - Loved this book, so read all his other ones. The Diamond Age was a good read, but the plot got really weird. Cryptonomicon was a toil to get thru - loved the WWII story, not the modern day one.
5. Chung Kuo: The Middle Kingdom by David Wingrove - So excited to read a Sci Fi book centered around China. Like all above, the first book was best. Plodded thru the rest of the series. The ending was a disappointment. Some of the violence was too much for me.
Other Sci Fi I’ve really enjoyed:
This is my 2nd favorite genre, with Ludlum as all time favorite.The Bourne Identity: A Novel by Robert Ludlum - after his 5th book, you realize all his books follow a pattern, but damn, it’s a good one
I read a lot of fantasy as a kid but not as interested any more.
J.R.R. Tolkien Boxed Set (The Hobbit and The Lord of the Rings) by J. R. R. Tolkien - the king of Fantasy, but to tell you the truth, I thought the series was ok; maybe I should reread as an adult
Harry Potter Paperback Boxed Set (Books 1-3) by J. K. Rowling - read this as an adult; loved the first 3
Game of Thrones by George R.R. Martin.
Caesar’s Commentaries: On The Gallic War and On The Civil War by Julius Caesar - pretty crazy that this is his own story
Banker To The Poor: Micro-Lending and the Battle Against World Poverty by Muhammad Yunus - recommended by my friend Dave McClure; finally a type of philanthropy that I found meaningful for meThe Story of Civilization [Volumes 1 to 11] (Hardcover Set 1963-1975) by Will & Ariel Durant - I listened to these audiotapes (literally cassette tapes) for a year while I commuted to San Ramon with Andersen Consulting. What a way to learn history. Some of it has been debunked by now but still an amazing tour de force by 1 person.
Business / Self Help
Outliers: The Story of Success by Malcolm Gladwell - The Tipping Point: How Little Things Can Make a Big Difference is good too but Blink: The Power of Thinking Without Thinking isn’t as useful, good for cocktail parties; now reading What the Dog Saw: And Other Adventures
The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb - intriguing but got a bit tired at the end
Where East Eats West by Sam Goodman - a good, street-smart book for doing business in China
Many Lives, Many Masters by Brian Weiss - fascinating book about previous lives, reincarnation; if nothing else, it helps you ask, “What is the 1 reason I’m (back) on Earth? What’s the 1 lesson my soul came back to the physical world to learn?” If you drop the metaphysical aspects of the question, the reflection is still very deep.
Children’s Technology Workshop
In Kyle’s own words:
We first see all around the treehouse. And then the garage door opens. Here comes the car on the driveway. The garage door is closing. Now the mailman comes. He jumps up to put the mail in the mailbox. Now the dog comes and gets the mail. He brings it to his master up the treehouse stairs. The man wakes up and reads it. Now he’s taking a shower. Now he’s watching TV. Now he’s eating pizza. Now he’s washing his dishes. Now he’s working out with his tools. Now he’s working on his computer. Now that’s me!
Another exhausting day. Had breakfast at the 24 hour cafe at Circular Quay, watching the ferries come and go with the Opera House and Harbour Bridge as backdrop. Walked to the Royal Botanic Gardens - loved the glass pyramid in the middle. Walked past the state library, and dropped into the Legislature hall where they had Chinese calligraphy scrolls to celebrate the upcoming Olympics. I really liked “The Ultimate Aim” with the paint splash looking like an arrow shot. Stopped for a super healthy and tasty lunch at some mall that was enroute to my destination goal of Queen Victoria Building/Shopping Center. Stopped in St. Andrew’s Cathedral to take some shelter from the rain and to rest my aching back. Gorgeous stained glass windows and comforting (live) organ music. Walked through City Centre Station to avoid the rain but couldn’t figure out a train/metro to Darling Harbour, where the IMAX theatre is. Finally ran thru the rain to the theatre and sat in line for an hour to watch The Dark Knight on a truly huge screen with terrifyingly loud sound. Not sure I really understood the whole movie. Went to dinner back at the Rocks and stumbled “home” to work.
I came early to enjoy the beautiful city
since it’s such a long flight, and ML and Kyle are in
7pm, and enjoyed a great soba salmon salad and beer at the micro-brewery in the
great Changi airport. I casually walked
up to my gate, only to find my flight wasn’t there anymore! After much confusion, I realized I read my
connecting flight time wrong – it turns out 20:00 is not 10pm!! Arghh, I missed my flight! Thank god
they got me on the next flight out at 12:30am.
I had to practice the Power of Now to not totally stress out.
And the Power of Now was right. The stress was totally in my head. Whether I stressed or not wouldn’t make me
get on the flight I missed, nor would it help my chances to get on a future
flight. Staying calm, using my mind as a
tool (e.g., go to Singapore Airlines desk and ask politely for help), and
accepting the consequences (in this case it was good – “Please wait 2 more
hours in the lounge Mr. Tien”) was the best way to handle the situation.
I arrived in
noon. My room has a view of the
(pic 1)! The helpful concierge Shane
directed me to The Rocks for lunch. I
enjoyed a great gyro at Dare (to eat responsibly, is their motto) café on a
cool but sunny day.
Then I walked through the flea market and
watched in amazement as Darren Germain spray-painted incredible “space
art.” I asked him to make a custom one
for me – pic 4 shows him with a blank canvas above a similar spray-painting,
and pic 5 is the finished product. See
this YouTube video to get a sense of how he did it. It was awesome!
Cravings covered, I took the monorail
through its entire loop – about half an hour.
It shoud’ve been a nice view of the city centre but it was raining. Nevertheless, it was enjoyable (my practicing
the Power of Now?).
I then walked over to
anything. Hungry, I walked back to
Harbourside but didn’t find anything to my liking. I walked around to the other side of
– my back started hurting by then.
During the walk, I saw that The Dark Knight was playing on IMAX! It was sold out for the night, so I bought
tickets for tomorrow. It’s going to be
awesome! I finally settled on Blackbird
Café for some fish & chips, but it was disappointing. If I’m going to eat deep fried food, it
should be really really good!
Rather stupidly, I walked all the way back
to Shangri-La, stopping in Max Brenner’s chocolate bar for some soy hot
chocolate to give my aching back a rest.
Whew, what a jam-packed day! The advantages of traveling alone.