[T]he problem...is well-known, and controlled for, in the more sophisticated parts of the financial industry. Not necessarily. The 'sophistication' of the indu

[T]he problem...is well-known, and controlled for, in the more sophisticated parts of the financial industry. Not necessarily. The 'sophistication' of the industry may be limited by experience. If you're a hedge-fund manager, and you have a choice between hiring the guy who made $100M for his clients last year or the guy who has a computer model saying it was just luck, who is he more likely to hire (and consequently, more likely to become the next manager)? I think the financial industry is much less sophisticated than we give them credit for, outside of the technology needed to create sure things by using insider information, hacking government policy, and high frequency trading.