Why Luck Matters More Than Skill
Investors should take a lesson or two from the Blackjack table.
October 31, 2011
Are you feeling lucky? Then you might be a better investor than you think according to Meir Statman, a professor at Santa Clara University and author of “What Investors Really Want: Know What Drives Investor Behavior and Make Smarter Financial Decisions.” A CIR advisory board member sent a link to this video this morning — it’s Statman talking to Bloomberg TV about why luck plays more of a role in investing success than skill. As it turns out, investors ought to take some lessons from gamblers who actually understand the concept of luck and how to arrange the odds in their favour. In an investment portfolio, this translates into diversification. Click on the image to watch the interview.