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I'm waiting for some honest soul to start the Lightning Strikes Twice Fund. Whenever someone succeeds massively, intellectually we may "know" that there's a gre
by Umalu 16y ago
I'm waiting for some honest soul to start the Lightning Strikes Twice Fund. Whenever someone succeeds massively, intellectually we may "know" that there's a great deal of randomness in that but instinctively we want to believe it must have happened because they are smarter, better, etc. So for their next venture we throw our money at them hoping lightning will strike twice. This phenomenon is most acute where markets are most efficient, such as in the stock market.
- nickpinkston 16y agoDon't laugh - VCs enjoy people with past success which is the same as saying "lightning strikes twice" - for both some type of filter and personal reputation hedging.
- jam 16y ago...unless you consider financial markets to be sufficiently complex that individual success is unlikely to be correlated to good decisions. It's more difficult to say the same of successful entrepreneurs.
- marvin 16y agoThat's not a bad idea at all, if it possible to somehow short a fund. On average, the new best-performing funds each year will invariably do worse the next year, just because on average they were lucky to do so well in the first place. But investors will be more drawn to them than to the funds that performed worse.