Beginner's Luck

Initial success in a new domain is often random — but we interpret it as evidence of talent, which generates dangerous overconfidence and larger subsequent bets.

• A new investor who makes money on their first few trades during a bull market assumes they have discovered a superior strategy.
• A first-time gambler wins and dramatically increases their stakes — convinced that early success reflects skill.
• A manager who succeeds on their first project assumes they have found the winning formula and stops questioning their approach.