Skill vs Luck

Legg Mason’s Michael Maubossin looks at the difficulties in untangling outcomes that are based on skill or luck or both as applied to the universe of investing.

His conclusions?

• The outcomes for most activities combine skill and luck.

• Separating skill and luck encourages better thinking about outcomes and
allows for sharply improved decision making.

• There are good methods to sort skill and luck in sports, business, and

• We define the key features of skill in the investment business.

This is going to be my train reading on the way home . . .



Untangling Skill and Luck: How to Think About Outcomes—Past, Present, and Future
Fortuna, by Albrecht Dürer
Legg Mason, July 15, 2010

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