Survivor bias and the mistake of stability

June 12, 2023 Seth Godin

– Seth Godin

The author provides various examples of Survivor bias and indicates how we get carried away to mistake
for stability and future planning. Let us see some examples as below:

 An asteroid has never destroyed the Earth, therefore an asteroid never will.
 This brand has been involved in scandals before, and it has always come back stronger, so there’s
nothing to worry about.
 There have been technology changes before, but we’ve always managed to find clients for what we
do.

The author opines that the Survivor bias is the trap of only considering the successful entries when thinking
about risk. For example, if you look at the performance of mutual funds after ten years, most of them seem
to do pretty well. But that’s partly because the ones that did really poorly didn’t make it to ten years.

We are lucky enough to live on a planet that hasn’t been destroyed by an asteroid. But that doesn’t mean
that other planets haven’t had their life forms extinguished–we’re simply unaware of them.

To conclude the author reminds us that the Past performance is no guarantee of the future. We should
plan accordingly!!