How Skill and Luck Impact Investing, Baseball, and Everything Else | Exploring Markets

How Skill and Luck Impact Investing, Baseball, and Everything Else

It is common to think great investors, great baseball hitters, or even great runners are all products of skill.

Most people underestimate the role of luck.

But that's a natural feeling. You want your successes to be because of your skill and hard work. Not your luck. It really does not work like that, however and the realization of this can change how you approach investing and anything else. Take these three points and then press play on the video below:
1. Not all skillful players have streaks, but all the streaks are held by skillful players. 
2. Depending on how much skill you have vs. luck will determine the rate at which you revert to the mean. 
3. The paradox of skill says in activities that involve both skill and luck it is the case that as skill improves, luck becomes more frequent.