Skill vs. luck (Stock market paper, but relates and uses poker i.e.)

[Uglyowl]

This paper was posted in the finance section of twoplustwo, but it puts into words the skill vs. luck debate better than anything I could remember. It is about stock market investing from Legg Mason, it even quotes Sklansky in it.

It is offers useful tidbits in how successful investors,
gamblers, etc. think.

It is well worth the time to read through the 16 pages.

Decision Making for Investors (http://www.leggmason.com/funds/knowledge/mauboussin/Mauboussin_052804.pdf)

[BigAlK]

Very interesting. Not that it proves anything (except maybe the author of the paper gets it) but I found it interesting that he explains why investing isn't the same as gambling. However inherent in the premise of the paper is his belief that poker, horse handicapping, and betting on sports are more investing than gambling.

For those who say tl;dr, the cliff notes are that the key to long term success in investing and poker are both the same. Good EV calculations and avoiding results oriented thinking. Sklansky bucks work in the stock market too. /images/graemlins/smile.gif

[cachews]

great article, thanks for the link... the part about Asch's experiment is pretty sick; I'd never heard that before