# Skill vs. Luck PDF



## Timmy (22 July 2010)

Great article (PDF format) from Michael Maboussin:



> Outcomes from many activities””including sports, business, and investing””are the combination of skill and luck. Most people recognize that skill and luck play a role in results, yet they have a poor sense of the relative contribution of each. The ability to properly untangle skill and luck leads to much better thinking about most day-to-day outcomes, and allows for sharply improved decision making.




Can be downloaded from this link:
*
Untangling Skill and Luck*
http://pragcap.com/untangling-skill-and-luck


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## So_Cynical (22 July 2010)

I'm surprised no one has posted the usual "the harder i work the luckier i get" rubbish.


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## Timmy (23 July 2010)

So_Cynical said:


> I'm surprised no one has posted the usual "the harder i work the luckier i get" rubbish.




That would normally be me 

I _was _saving it up to post later.


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## tech/a (23 July 2010)

Often *LUCK* puts you in a position which if you have the *SKILL* you can benifit from.


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## Dunger (23 July 2010)

It wasn't luck that I read that pdf, it was all skill.


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## tech/a (23 July 2010)

> It wasn't luck that I read that pdf, it was all skill.





It was luck that you found it and skill in reading it---if you think about it!

Without the luck of finding it you would not have been able to use your skill.


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## It's Snake Pliskin (23 July 2010)

tech/a said:


> Often *LUCK* puts you in a position which if you have the *SKILL* you can benifit from.



Or, The skill (knowledge) puts you in a position in which you can benefit from the resultant luck.


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## motorway (23 July 2010)

It's Snake Pliskin said:


> Or, The skill (knowledge) puts you in a position in which you can benefit from the resultant luck.




You have to know HOW ( where & When too )to be available

Risk Vs reward

You have to give yourself a chance

Luck happens ( Not just S### )

Motorway


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## brty (23 July 2010)

Luckily I have the skills  to know when something I'm reading has assumptions that are not necessarily true.
As I have stated in other threads, I don't believe in random, yet that article associates luck with random in a normal distribution, do we have any evidence that there is a correlation there??

brty


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## white_goodman (23 July 2010)

a lot of people are fooled by randomness...


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## Garpal Gumnut (23 July 2010)

tech/a is on the money with luck vs skills imho.

A quote from Seneca the Roman philosopher.

“Luck is what happens when preparation meets opportunity.”

gg


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## johnnyg (23 July 2010)

tech/a said:


> Often *LUCK* puts you in a position which if you have the *SKILL* you can benifit from.




For me and my side interest, I'd say that -

You have to put yourself in a position so that if you get lucky, your prior knowledge/skill will benefit you. ie Make $$$


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## Wysiwyg (23 July 2010)

Since when did 7 x 7 = 48 
The lottery winner said, "I dreamed of the number seven for seven straight nights. And 7 times 7 is 48". 
Pulling the pud there I think since 7x7 = 49 when I went to school.

Anyway as far as luck and skill goes with securities trading, there is the old "Good luck Bad luck story". One version below.



> *Good Luck Bad Luck*!
> 
> There is a Chinese story of a farmer who used an old horse to till his fields. One day, the horse escaped into the hills and when the farmer's neighbors sympathized with the old man over his bad luck, the farmer replied, "Bad luck? Good luck? Who knows?" A week later, the horse returned with a herd of horses from the hills and this time the neighbors congratulated the farmer on his good luck. His reply was, "Good luck? Bad luck?
> 
> ...




So as far as trading goes, the stock that opens 20% below your stop loss may well be a blessing in disguise. 

Oh and as far as trading strategies go with luck and skill; we learn *not* to lose too much money until luck comes through ... eventually.


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## tech/a (23 July 2010)

"Two reps from a shoe company were sent to China to investigate shoe sale opportunities there.
When they returned they were quized at a board meeting
One said I wouldnt waste your money NO ONE wears shoes!
The other Said get over there as quick as you can NO ONE wears shoes!"

While the above is a fable its pretty close to the truth when it comes to Aussi Wine sales in China!


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