Ever Heard Of The Paradox of Skill In Investing?

[pawanjain]

‎This paradox can be related to both gambling activities and investment but for better emphasis, I am going to dwell on investment because when it comes to trading and investing, we would have to encounter more luck as compared to our skill growth and perfection, with patience, humility and a nack for the right process.
‎This however is learnt with time commitment, discipline and consistency.
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‎The more evenly matched opponents are in skill, the more of a role luck plays in determining the final outcome.
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‎If everyone is skillful, then luck plays a role in winning.
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‎Popularized by Michael Mauboussin in his book The Success Equation, the Paradox of Skill is the idea that as everyone in a field becomes more skilled, the role of luck actually increases.
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‎If you are playing in a high-skill environment, you have to accept that variance (luck) will dominate the short term. To combat this, Mauboussin suggests focusing on process over outcome. If you have a good process, your skill will eventually win out over thousands of repetitions, but you might lose the next ten times simply because everyone else is also "good."
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‎https://www.safalniveshak.com/investing-and-the-paradox-of-skill/?

Your opinion is welcomed!

We do not have any control on luck and that is something that plays its role by itself at its own time.
Rest all of it depends on how skilled we are in the bet we are placing.
It is obvious that if the other person is more skilled than us then he will definitely win the bet and vice versa.
Focusing on improving the skills is the only thing that will give us the leverage to win the bet.

[devlin85]

‎This paradox can be related to both gambling activities and investment but for better emphasis, I am going to dwell on investment because when it comes to trading and investing, we would have to encounter more luck as compared to our skill growth and perfection, with patience, humility and a nack for the right process.
‎This however is learnt with time commitment, discipline and consistency.
‎
Your opinion is welcomed!

Luck is not something I really do lay emphasis on as it regards trading, I do not seel the luck idea with trading a.d investment and that is because these are skill based and you need to put in the work, to the best of my knowledge, skill based things are usually not often dependent on luck neither are they expected to be carried out haphazardly, you can not be random with trading and investment and get as lucky as you would if you are applying same to and with gambling.  It is always best and most profitable if you are trading or gambling based off your skill set, that way you define your activities enough that if there be any issues related, you will definitely know where to make corrections with your skill set but it is quite different with gambling, in all I believe so well that luck has a very low stake with trading and investing than it does with gambling, evidently the frequency of occurrence of luck in gambling is mostly higher and bigger than that we see with trading and investing because they are fsr more skill based.

The paradox does not diminish skill; it only indicates that as the level of skill increases, luck and variance weigh more heavily on the results. Having access to good information and the necessary tools makes it possible to enhance skills, which would lead to better risk management, discipline, consistency, and emotional control. All of this would not guarantee short-term profits, but it would increase the probability of success in the long term. Thus, skill would not be eliminating luck; on the contrary, over time it would tilt it in one’s favor.

[Oluwa-btc]

It's always a race of skills. Those who are able to rise above the rest will come out victorious. I believe luck plays a minor role.

Yeah, it's process over outcome, but it's still all about outcome in the end. It's the long game that matters. Short-term outcomes aren't indicators of long-term success.

In a way, it's like Bitcoin investors. Those who have developed diamond hands, those who have seen the wider picture, don't care much about short-term fluctuations and the gains of those who are taking advantage of them. In a market where everybody is trying to be the strongest hodler, those who last win.

Everyone thinks skill guarantees success.But In reality,the higher the skill,the more luck decides outcomes.Investing isn’t just about being smart,it’s about surviving randomness, staying humble, and respecting the unseen forces in every market.In investing,skill is essential but it's not sufficient.Skill alone can’t protect you from volatility, but adoption and resilience do.