I recently read this New York Magazine article written by Reeves Wiedman (his name will be relevant in a moment) on hedge fund manager Bill Ackman. The article discusses Ackman’s life and his recent criticisms of Harvard University, but what caught my eye was the following passage about Ackman:
Ackman believes that our lives are often fated from birth. “I have a view that people become their names,” he told me. “Like, I’ve met people named Hamburger that own McDonald’s franchises.” We’d been talking for nearly an hour and a half when Ackman asked me what my name was, hoping to offer a diagnosis. After he seemed momentarily stumped by my surname [Wiedman], I offered him my first name [Reeves], which he misheard as Reed. “Read … write,” he said, before turning back to himself. “So, my name is Ackman — it’s like Activist Man.”
My initial reaction when I read something like this is, “Really? How could a billionaire believe something like this?”
Technically, there is a field of study called nominative determinism which argues that people tend to work in areas that fit their name. For example, if your last name is Smith (meaning that you are descended from blacksmiths) the argument goes that you are more likely to become a blacksmith or similarly related occupation.
I could see how this could be somewhat true for genetic reasons (you have a natural inclination toward a specific occupation) or for cultural reasons (e.g. you come from a family of doctors and are pressured into the medical field). However, Ackman’s argument is much stronger than this.
He is arguing that we “become our names” and that his name is somehow related to him being an activist hedge fund manager. Unfortunately, when I looked into the origin of the surname Ackman, I found the following:
The surname Ackman is of Anglo-Saxon origin, derived from the Old English “acmann” which translates to “oak-man”. It was historically used by individuals who lived around oak trees or worked with oak wood, such as carpenters or foresters.
Too bad Ackman isn’t trading lumber futures to realize his full potential.
Jokes aside, I never used to understand how billionaires could believe things that seemed so idiotic. How can you be so successful and so misguided at the same time?
But, as I’ve thought about this more, I’ve come to realize that this level of delusional thinking is practically a requirement of the self-made billionaire class. After all, how else could you make it to the top unless you had an insane level of belief in something, even if your belief turned out to be wrong? It goes back to what Steve Jobs said in this Apple commercial long ago:
The people who are crazy enough to think they can change the world are the ones who do.
Unfortunately, Steve’s idea is only half true. Because of all the people who are “crazy enough to think they can change the world,” the vast majority of them don’t change the world. Their dreams are never realized. They never make it into Apple commercials. Regrettably, we only hear about those who do. It’s survivorship bias of the highest degree.
Knowing this, it’s not surprising to hear that Ackman believes “we become our names” or Elon Musk believes we live in a simulation or Jack Dorsey believes that hyperinflation is coming. That level of conviction in something (even if it’s incorrect) is a feature, not a bug, that correlates with the rest of their overall success. When viewed in this way, it makes sense why J.P. Morgan once stated (allegedly):
Millionaires don’t use astrology, billionaires do.
Because the people that are irrational enough to believe in astrology are irrational enough to believe in a world that is drastically different from the one we have today. That unrealistic level of faith that comes across as delusional is also what helps make them so successful.
This is not a recent phenomenon either. Sir Isaac Newton believed in alchemy as deeply as he believed in calculus. The characteristics that allowed him to change mathematics forever are the same ones that sent him on a wild goose chase to turn lead into gold. The lesson here is simple—the behaviors that lead to success can also lead to failure.
This is especially true in the investment world where the most successful investors are generally those that took a lot of risk and got things right. Unfortunately, the most unsuccessful investors tend to be those that also took a lot of risk, but got things wrong. In both cases, taking a lot of risk wasn’t a sufficient condition for success, but it was a necessary one.
In the end, the line between genius and idiocy is often walked by those who have reached the highest levels of achievement. Individuals like Ackman, Musk, and Dorsey, demonstrate that extraordinary success often requires a leap of faith beyond conventional wisdom. You have to sometimes challenge the status quo, even if you end up being wrong.
This illustrates how success and failure are two sides of the same coin. The very qualities that drive individuals to greatness can also lead to their downfall. The doubled-edged sword remains alive and well.
So, if you desire unconventional success, you will need to take unconventional action. But don’t blame me if things don’t go well. Blame your horoscope. I bet the billionaires do.
Thank you for reading.
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This is post 386. Any code I have related to this post can be found here with the same numbering: https://github.com/nmaggiulli/of-dollars-and-data
