6 ms·

The difference betwen skill and luck.

43 points by svag 16y ago

iuguy 16y ago
This reminds me of a discussion on a mailing list where someone pointed out the most amazing scam. You find 256 people and email them the details of a 50/50 prediction. 128 people should get the right prediction. You then email them another 50/50 prediction. Of course, 64 of them receive the right prediction twice in a row. You then make a third 50/50 prediction to the 64, another to the 32 positive responses and so on until you find a manageable number of people who now believe you have some amazing insight into the future. As much as we may want to think things are not random, sometimes they really are, sometimes they're just probabilities.
- frossie 16y ago
  Exploitations of people's failure to understand statistics are a lot older than email. Even in my grandmother's time there would be somebody who would offer to predict the gender of your unborn child - "if I am wrong, I'll give you your money back!".
- lotusleaf1987 16y ago
  That scam is an old one going back at the least to newspapers in the early 1900s. Specifically, sports prediction services did it in classified ads (and continue to do so in some places). I think most con-artist scams haven't really changed, just adopted new mediums and new technologies.
- Xk 16y ago
  Reminds me of http://xkcd.com/628/ http://xkcd.com/628/
- ngsayjoe 16y ago
  Warren buffet says what if all that predict successfully come from the same village, wouldnt that tells you something?
  - khafra 16y ago
    The same rules of probability apply, so it depends on the number of villages making predictions divided by the improbability of successfully matching that village's predictions. If there were only 10 or 20 people buying lottery tickets, and one of them actually won, I'd pay very close attention to that one person's methods.
sobbybutter 16y ago
"In the mid-1970s, a man sought a ticket that ended in 48. He found a ticket, bought it, and won the lottery. When asked why he was so intent on finding that number, he replied, 'I dreamed of the number seven for seven nights. And seven times seven is 48.'" Something tells me this guy did well by not taking math in grade school too seriously.
- jacques_chester 16y ago
  If he'd paid attention to maths, he wouldn't be playing the lottery.
- cema 16y ago
  Well, he was close enough.
generalk 16y ago
> Always compare results with a null model that reflects luck. If nothing else, playing poker has taught me this. It's possible to win lots of money based on making exceedingly poor bets and getting very lucky. There's one card left to come, there's a 5% chance an Ace will come, but if it does you'll have an unbeatable hand, if not, you have a hand that beats 66% of the possible hands. Do you bet? What happens if the Ace doesn't fall? A poor player who gets lucky will attribute his success to his obvious skill. A skillful player who gets lucky will chide himself for making a poor decision.
- ikono 16y ago
  If nothing else, playing poker has taught me this: The correct answer is always "it depends".
  - jacques_chester 16y ago
    You are now 2/3rds of the way to being a successful lawyer, accountant or economist!
Ruudjah 16y ago
> He found a ticket, bought it, and won the lottery. When asked why he was so intent on finding that number, he replied, "I dreamed of the number seven for seven nights. And seven times seven is 48." Need say no more.
vannevar 16y ago
The difficulty in separating skill and luck is unconsciously illustrated by the author himself in his basketball example. We're asked to consider how much of a 'hot hand' is attributable to chance, and how much to skill. But what is chance in this context? Clearly he doesn't mean the likelihood of a ball launched in an arbitrary trajectory finding its way to the basket. More likely, he means the shooting average of an average basketball player in the type of game being observed (pickup game, college, etc). Clearly skill contributes to such a baseline average. With basketball we have a skill that can easily be measured for nearly anyone: we just have them toss a basketball a few dozen times and we have a good gauge of how skillful they are compared to others. But what about, say, a venture capitalist? The game that they are supposed to be skilled at has so much overhead that very few are ever played, and not all those that want to play can (you've got to have a lot of money to even sit at the table). It's quite possible that success as a VC is entirely attributable to luck, with no contribution from skill at all. For these kinds of activities we have no way to generate a meaningful statistical baseline. We can only engage in a thought experiment: if hypothetically the success in question was actually due solely to chance, would the world we see look any different?
ohashi 16y ago
It was interesting but I was hoping for some more concrete suggestions than just a 'you should consider randomness vs luck.' What is a better way than ESOs? Give me a concrete example of how to untangle this rather than just saying untangle it. It doesn't have to be universally applicable but an example would be nice.
jonpaul 16y ago
The best single comment I've read about luck was written right here on HN. I've detailed it here: http://techneur.com/post/1321568428/luck-ii http://techneur.com/post/1321568428/luck-ii In summary, I made a comment about Zuckerberg and the value of Facebook. Someone responded that he was lucky. To which someone else responded with this: (Can't find original HN comment) "This attitude bugs me a lot. There is probably a path for every single person in this country to make a million dollars in the next year if they were just “savvy enough” to take advantage of it. It seems everyone wants to diminish Zuck’s success by ascribing luck to it, but let me tell you something. Zuck executed the shit out of Facebook. Did the community and mindshare just come out of thin air? There’s no good reason to believe that Zuckerberg is lucky at all. Saying he was in the right place at the right time has this tacit assumption that if he were somewhere else at the wrong time he would have tried the same thing and fell flat on his face. It seems because Facebook is an outlier, people feel safe talking about the luck factor, but that’s meaningless because we all exist with individual circumstances, and by that measure everything every one of us does is based on luck. Instead, I prefer to ascribe luck to things that the individual actually had no control over, such as winning the lottery."
- zck 16y ago
  The comment is here: http://news.ycombinator.com/item?id=1791800 http://news.ycombinator.com/item?id=1791800 Searchyc.com is your friend: http://searchyc.com/This+attitude+bugs+me+a+lot.+There+ http://searchyc.com/This+attitude+bugs+me+a+lot.+There+
  - Charuru 16y ago
    You can also just google it with quotation marks.
- jacques_chester 16y ago
  Zuckerberg is not particularly unique in terms of his intelligence, ambition or connections. Men and women like Zuckerberg have come into and passed out (or dropped out) of the USA's elite universities for centuries. Yes. Luck played a big role.
StavrosK 16y ago
> Reversion to the mean. Any system that combines skill and luck will revert to the mean over time. This means that an extreme outcome, good or bad, will be followed by an outcome that has an expected value closer to the mean. So if I toss a coin 10 times and it comes up heads, the next toss is more likely to come up tails? I smell a rat.
- beder 16y ago
  No, it means that in the next 10 tosses, you still expect to get a 5/5 split, so over these 20 tosses, you'll probably have 15 heads, which is closer to the mean. I've seen this analysis in sports. In baseball, for example, you generally expect teams to win one-run games as often as they win games in general (that is, there's no "great closer" effect). So if you see a team winning 80% of their one-run games in the first half of the season, you can expect their record to be worse in the second half.
  - StavrosK 16y ago
    Ah, I see, thanks.
    - ssebro 16y ago
      No dude- you were right and he was wrong.
      - StavrosK 16y ago
        No, he's saying that if you have a few outliers to begin with you expect to get more normal-looking data later on, drowning your outliers in them. If you get 5 heads initially and then another 5 heads and 5 tails, it's still closer to the mean than when you began.
        ssebro 16y ago
        That can't be right, since the each point in the data is independent. In a 50/50 coin-flip game where you get 9 coins come up heads, the probability that the next coin flip results in tails is still 50%. What you need to understand is that probability deals with uncertain events. So instead of thinking about the final count needing to be around 50% heads and 50% tails, you should expect the count of the yet undecided part to converge around 50% heads, 50% tails.
joshuaheard 16y ago
Luck = Skill + Opportunity
ajaymehta 16y ago
"I'm a great believer in luck, and I find the harder I work the more I have of it." - Thomas Jefferson
deleted 16y ago
[deleted]
AbyBeats 16y ago
"I dreamed of the number seven for seven nights. And seven times seven is 48." I think his lack of multiplication skills won him the lottery. It was luck indeed.
chr15 16y ago
The author has an entire paper dedicated to this [PDF] http://www.cscs.umich.edu/documents/Luck.pdf http://www.cscs.umich.edu/documents/Luck.pdf

43 points by svag 16y ago

iuguy 16y ago

This reminds me of a discussion on a mailing list where someone pointed out the most amazing scam. You find 256 people and email them the details of a 50/50 prediction. 128 people should get the right prediction. You then email them another 50/50 prediction. Of course, 64 of them receive the right prediction twice in a row. You then make a third 50/50 prediction to the 64, another to the 32 positive responses and so on until you find a manageable number of people who now believe you have some amazing insight into the future. As much as we may want to think things are not random, sometimes they really are, sometimes they're just probabilities.

frossie 16y ago
Exploitations of people's failure to understand statistics are a lot older than email. Even in my grandmother's time there would be somebody who would offer to predict the gender of your unborn child - "if I am wrong, I'll give you your money back!".
lotusleaf1987 16y ago
That scam is an old one going back at the least to newspapers in the early 1900s. Specifically, sports prediction services did it in classified ads (and continue to do so in some places). I think most con-artist scams haven't really changed, just adopted new mediums and new technologies.
Xk 16y ago
Reminds me of http://xkcd.com/628/ http://xkcd.com/628/
ngsayjoe 16y ago
Warren buffet says what if all that predict successfully come from the same village, wouldnt that tells you something?
- khafra 16y ago
  The same rules of probability apply, so it depends on the number of villages making predictions divided by the improbability of successfully matching that village's predictions. If there were only 10 or 20 people buying lottery tickets, and one of them actually won, I'd pay very close attention to that one person's methods.

sobbybutter 16y ago

"In the mid-1970s, a man sought a ticket that ended in 48. He found a ticket, bought it, and won the lottery. When asked why he was so intent on finding that number, he replied, 'I dreamed of the number seven for seven nights. And seven times seven is 48.'" Something tells me this guy did well by not taking math in grade school too seriously.

jacques_chester 16y ago
If he'd paid attention to maths, he wouldn't be playing the lottery.
cema 16y ago
Well, he was close enough.

generalk 16y ago

> Always compare results with a null model that reflects luck. If nothing else, playing poker has taught me this. It's possible to win lots of money based on making exceedingly poor bets and getting very lucky. There's one card left to come, there's a 5% chance an Ace will come, but if it does you'll have an unbeatable hand, if not, you have a hand that beats 66% of the possible hands. Do you bet? What happens if the Ace doesn't fall? A poor player who gets lucky will attribute his success to his obvious skill. A skillful player who gets lucky will chide himself for making a poor decision.

ikono 16y ago
If nothing else, playing poker has taught me this: The correct answer is always "it depends".
- jacques_chester 16y ago
  You are now 2/3rds of the way to being a successful lawyer, accountant or economist!

Ruudjah 16y ago

> He found a ticket, bought it, and won the lottery. When asked why he was so intent on finding that number, he replied, "I dreamed of the number seven for seven nights. And seven times seven is 48." Need say no more.

vannevar 16y ago

The difficulty in separating skill and luck is unconsciously illustrated by the author himself in his basketball example. We're asked to consider how much of a 'hot hand' is attributable to chance, and how much to skill. But what is chance in this context? Clearly he doesn't mean the likelihood of a ball launched in an arbitrary trajectory finding its way to the basket. More likely, he means the shooting average of an average basketball player in the type of game being observed (pickup game, college, etc). Clearly skill contributes to such a baseline average. With basketball we have a skill that can easily be measured for nearly anyone: we just have them toss a basketball a few dozen times and we have a good gauge of how skillful they are compared to others. But what about, say, a venture capitalist? The game that they are supposed to be skilled at has so much overhead that very few are ever played, and not all those that want to play can (you've got to have a lot of money to even sit at the table). It's quite possible that success as a VC is entirely attributable to luck, with no contribution from skill at all. For these kinds of activities we have no way to generate a meaningful statistical baseline. We can only engage in a thought experiment: if hypothetically the success in question was actually due solely to chance, would the world we see look any different?

ohashi 16y ago

It was interesting but I was hoping for some more concrete suggestions than just a 'you should consider randomness vs luck.' What is a better way than ESOs? Give me a concrete example of how to untangle this rather than just saying untangle it. It doesn't have to be universally applicable but an example would be nice.

jonpaul 16y ago

The best single comment I've read about luck was written right here on HN. I've detailed it here: http://techneur.com/post/1321568428/luck-ii http://techneur.com/post/1321568428/luck-ii In summary, I made a comment about Zuckerberg and the value of Facebook. Someone responded that he was lucky. To which someone else responded with this: (Can't find original HN comment) "This attitude bugs me a lot. There is probably a path for every single person in this country to make a million dollars in the next year if they were just “savvy enough” to take advantage of it. It seems everyone wants to diminish Zuck’s success by ascribing luck to it, but let me tell you something. Zuck executed the shit out of Facebook. Did the community and mindshare just come out of thin air? There’s no good reason to believe that Zuckerberg is lucky at all. Saying he was in the right place at the right time has this tacit assumption that if he were somewhere else at the wrong time he would have tried the same thing and fell flat on his face. It seems because Facebook is an outlier, people feel safe talking about the luck factor, but that’s meaningless because we all exist with individual circumstances, and by that measure everything every one of us does is based on luck. Instead, I prefer to ascribe luck to things that the individual actually had no control over, such as winning the lottery."

zck 16y ago
The comment is here: http://news.ycombinator.com/item?id=1791800 http://news.ycombinator.com/item?id=1791800 Searchyc.com is your friend: http://searchyc.com/This+attitude+bugs+me+a+lot.+There+ http://searchyc.com/This+attitude+bugs+me+a+lot.+There+
- Charuru 16y ago
  You can also just google it with quotation marks.
jacques_chester 16y ago
Zuckerberg is not particularly unique in terms of his intelligence, ambition or connections. Men and women like Zuckerberg have come into and passed out (or dropped out) of the USA's elite universities for centuries. Yes. Luck played a big role.

StavrosK 16y ago

> Reversion to the mean. Any system that combines skill and luck will revert to the mean over time. This means that an extreme outcome, good or bad, will be followed by an outcome that has an expected value closer to the mean. So if I toss a coin 10 times and it comes up heads, the next toss is more likely to come up tails? I smell a rat.

beder 16y ago
No, it means that in the next 10 tosses, you still expect to get a 5/5 split, so over these 20 tosses, you'll probably have 15 heads, which is closer to the mean. I've seen this analysis in sports. In baseball, for example, you generally expect teams to win one-run games as often as they win games in general (that is, there's no "great closer" effect). So if you see a team winning 80% of their one-run games in the first half of the season, you can expect their record to be worse in the second half.
- StavrosK 16y ago
  Ah, I see, thanks.
  - ssebro 16y ago
    No dude- you were right and he was wrong.
    - StavrosK 16y ago
      No, he's saying that if you have a few outliers to begin with you expect to get more normal-looking data later on, drowning your outliers in them. If you get 5 heads initially and then another 5 heads and 5 tails, it's still closer to the mean than when you began.
      - ssebro 16y ago
        That can't be right, since the each point in the data is independent. In a 50/50 coin-flip game where you get 9 coins come up heads, the probability that the next coin flip results in tails is still 50%. What you need to understand is that probability deals with uncertain events. So instead of thinking about the final count needing to be around 50% heads and 50% tails, you should expect the count of the yet undecided part to converge around 50% heads, 50% tails.

joshuaheard 16y ago

Luck = Skill + Opportunity

ajaymehta 16y ago

"I'm a great believer in luck, and I find the harder I work the more I have of it." - Thomas Jefferson

deleted 16y ago

[deleted]

AbyBeats 16y ago

"I dreamed of the number seven for seven nights. And seven times seven is 48." I think his lack of multiplication skills won him the lottery. It was luck indeed.

chr15 16y ago

The author has an entire paper dedicated to this [PDF] http://www.cscs.umich.edu/documents/Luck.pdf http://www.cscs.umich.edu/documents/Luck.pdf