Tag Archives: options

Don’t mistake possibilities for probabilities

Anything is possible — that’s inspiring and in a way assuring phrase. Indeed, anything can become possible with the right targeted effort and… with the right conditions. Now, this is a tricky one. The right conditions can be just there or they can be created. How probable is that both the effort and conditions will materialize is a completely different question.

To give some examples, it is perfectly possible for me to learn Chinese. If someone else has ever succeeded in doing so, why wouldn’t I? Well, what is the probability that I will learn Chinese? Pretty low. It is not one of my goals nor even dreams. Therefore, despite the theoretical possibility, it will remain impossible for me, or better — it is improbable.

It is theoretically possible for me to become an athlete. Even now in my thirties, if I put all my efforts into reaching this goal, I am convinced I will get myself there. At the expense of what? Pretty much everything I guess, so the probability of this event is likewise pretty low.

If I would put percentages, practically everything where there is at least a tiny chance of occurrence is possible. There are examples of successes that defy all odds. Like a million to one, and still… a possibility is a possibility. However, the probability is a likelihood of occurrence, which can easily be close to zero for this or that reason.

This difference sounds pretty obvious, yet the problem arises when a person mistakes a possibility for probability. If someone says: “It is impossible!”, what is meant on many counts is not that it is impossible, but rather that: “It is improbable!”. Slight nuance, but a huge difference in meaning.

In his book “Principles” Ray Dalio explicitly stressed: “anything is possible. It’s probabilities that matter.” and I cannot agree more.