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Luck and skill


Michael Mauboussin's book The Success Equation describes how you distinguish skill from luck.

"There's a quick and easy way to test whether an activity involves skill; ask whether you can lose on purpose. In games of skill, it's clear that you can lose intentionally but when playing roulette or the lottery you can't lose on purpose."

This is a good initial rule of thumb but is too simple when it comes to business. Usually there is a healthy dose of both luck and skill involved. Ask Alan Greenspan or Jack Welch.

Typically our biases convince us that it was skill when we succeed and bad luck when we fail.

To what can I attribute my success? Skill or

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