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This is extremely insightful and applies to a lot of industries: I've learned that we can't tell the difference between luck and skill. Out of millions of inve

by bushido 12y ago

This is extremely insightful and applies to a lot of industries: I've learned that we can't tell the difference between luck and skill. Out of millions of investors, a few will be phenomenally successful due to luck alone, yet no one is willing to admit they are one of the lucky ones. I recall reading this statement written in different words in a few articles and essays from PG and others.

WalterBright 12y ago
One reasonable test is if a person consistently is "lucky", then it is more likely to be skill. Steve Jobs, for example, made three fortunes. I suspect it is skill.
- bushido 12y ago
  There are always exceptional exceptions :)
- gaius 12y ago
  But had he not had the incredible good luck to meet Woz when he did, he would have died penniless and alone.
sumedh 12y ago
> I've learned that we can't tell the difference between luck and skill. You should read what Warren Buffett has to say on this topic http://www4.gsb.columbia.edu/null?&exclusive=filemgr.download&file_id=522 http://www4.gsb.columbia.edu/null?&exclusive=filemgr.downloa...
Nevermark 12y ago
Skill: Step 0: Create 1024 different "funds". Step 1: In half the funds (512) buy a very volatile stock. In the other half, sell the same stock short. Wait a week and close out all positions. Half the funds will now have made a lot of money. (Half will have lost the same amount of money.) Step 2: In half the winning funds (256) buy a very volatile stock. Sell short in the other half. In a week close out the positions. Step 3: In half the two-time winning funds (128), buy a very volatile stock, in the other half, sell short. Close out. Steps 4-10: Repeat with half as many winning funds for each repetition. Step 11: You now have exactly the same amount of money that you started with, minus some trading fees. But you have a remarkable fund you can point to where you made an enormous amount of money betting correctly on volatile stocks 10 times over 10 weeks. Your fund's return will be amazing and turn any investor green! Start acquiring investors who you can charge fees for depositing funds, removing funds, keeping funds invested, whatever: Profit! Note this plan is unconventional in that there is no "Step 10b ???" before profit. Profit is assured.
- restalis 12y ago
  10 consecutive successful investments does not just happen. Yes, this may work in attracting „investors” given the weakness in the human nature, but anyone with half-brain will be put in guard by such investment history. To pass their guard admit two or three wrong moves.

by bushido 12y ago

WalterBright 12y ago

One reasonable test is if a person consistently is "lucky", then it is more likely to be skill. Steve Jobs, for example, made three fortunes. I suspect it is skill.

bushido 12y ago
There are always exceptional exceptions :)
gaius 12y ago
But had he not had the incredible good luck to meet Woz when he did, he would have died penniless and alone.

sumedh 12y ago

> I've learned that we can't tell the difference between luck and skill. You should read what Warren Buffett has to say on this topic http://www4.gsb.columbia.edu/null?&exclusive=filemgr.download&file_id=522 http://www4.gsb.columbia.edu/null?&exclusive=filemgr.downloa...

Nevermark 12y ago

Skill: Step 0: Create 1024 different "funds". Step 1: In half the funds (512) buy a very volatile stock. In the other half, sell the same stock short. Wait a week and close out all positions. Half the funds will now have made a lot of money. (Half will have lost the same amount of money.) Step 2: In half the winning funds (256) buy a very volatile stock. Sell short in the other half. In a week close out the positions. Step 3: In half the two-time winning funds (128), buy a very volatile stock, in the other half, sell short. Close out. Steps 4-10: Repeat with half as many winning funds for each repetition. Step 11: You now have exactly the same amount of money that you started with, minus some trading fees. But you have a remarkable fund you can point to where you made an enormous amount of money betting correctly on volatile stocks 10 times over 10 weeks. Your fund's return will be amazing and turn any investor green! Start acquiring investors who you can charge fees for depositing funds, removing funds, keeping funds invested, whatever: Profit! Note this plan is unconventional in that there is no "Step 10b ???" before profit. Profit is assured.

restalis 12y ago
10 consecutive successful investments does not just happen. Yes, this may work in attracting „investors” given the weakness in the human nature, but anyone with half-brain will be put in guard by such investment history. To pass their guard admit two or three wrong moves.