What is What I Learned Losing a Million Dollars about?
The book is a semi-autobiographical account of Jim Paul’s rise and fall as a commodities trader. It demonstrates how his early success fueled overconfidence, which led to larger risk exposure. The impressive development of his career was accompanied by an increasing attachment to being right – which became more important than getting the results he wanted. As market conditions turned against him, Paul’s attention shifted entirely from making money (or at least not losing it) to proving the market that he was right. This resulted in him repeatedly escalating his positions instead of reducing risk, ultimately losing a million dollars. The book provides an exquisite post-mortem, tracing this failure back not to a lack of intelligence or insight. Rather, the failure is driven by psychological blind spots.

Now, what is What I Learned Losing a Million Dollars really about?
As the name suggests, it is not about how to make money. If one looks deeper, it’s also not only about why intelligent, curious, disciplined people still lose it. It’s about the deep and intricate play of our mind, emotions, beliefs, convictions… and, of course, the processes and rules we can establish for ourselves to structurally translate our thoughts and intentions into actions. It is about how we can provide an insurance and a sandbox so that the Schrödinger cat of our curiosity at most gets one of its whiskers burned in the process of becoming a lion and not carbonized, as it is not a single mistake that usually kills you, but rather a sequence of unmanaged risks, each of which might have been survivable on its own. The book concludes by reframing success in general decision-making as a function of disciplined work with calculated risk and emotional control rather than brilliance, prediction, or luck, with ego, denial, and poor risk management representing the dark sides of untamed curiosity and lack of reflection.

What makes this book stand out?
This book speaks against several popular narratives simultaneously – so it definitely has the potential not only to fascinate but also to annoy a broad audience (which also makes it an excellent present for your enemy, if you know it will rub them and their beliefs the wrong way). First, it challenges the all-healing power of intellect. “I’m smart enough to know how it works” are some underrated last words. Setting aside that measuring intellect is a task of its own, being smart does not equal being unable to fool yourself. If anything, one could argue the smarter you are, the more intricate and refined your means of self-fooling become. The caution against this is very well placed both in business and academia – “you are the easiest to fool” was the introductory line in our very first module at VU Amsterdam… Boy, did I think of those words when I was catching myself lamenting that I could not include a cool article in my systematic literature review because it didn’t pass the predefined entry criteria! The point is: setting exit criteria saves you from a lot of trouble and a lot of decision-making energy. This becomes particularly relevant when curiosity meets high stakes.

Second, it challenges the blanket boldness of endeavours, as “no one has tried doing this before” is far from always a good reason and can never be the only good reason to try something. Should one try radically new approaches challenging existing paradigms and potentially revolutionising science and business? By all means! But only if one can physically, psychologically, emotionally, and materially sustain complete failure. Without such buffers, curiosity turns from courage into negligence and de facto a means of outsourcing of your responsibility to luck, chance, higher (and lower) powers...

Third, “the last mile is the least crowded” is used a lot (and I’m actually getting a T-shirt with this inscription for the next run), but it is most commonly used to motivate perseverance and resilience in the face of adversity, not to warn that it is so empty because the rest also died out on the way to the top of Everest. Often not spectacularly, but quietly. History is told by the winners, and the voices of losers are not heard as they are not there anymore. Yet, they could provide very useful input for you to execute a better judgment: why your unconventional idea is going to work (based on your careful analysis with eyes wide open and not on “because I’m mama’s special”), how to limit your exposure to test your creativity, and how to know when to call it a day and try something new should the odds not be in your favour.

All in all, this is a fascinating and eye-opening read, written with a good dose of somewhat black humour – a great companion for your year-end reflection session.