In certain areas, skill plays no role whatsoever. In his book Thinking, Fast and Slow, [Daniel] Kahneman describes his visit to an asset management company. To brief him, they sent him a spreadsheet showing the performance of each investment adviser over the past eight years. From this, a ranking was assigned to each: number 1, 2, 3, and so on in descending order. This was compiled every year. Kahneman quickly calculated the relationship between the years' rankings. Specifically, he calculated the correlation of the rankings between year 1 and year 2, between year 1 and year 3, year 1 and year 5, up until year 7 and year 8. The result: pure coincidence. Sometimes the adviser was at the very top and sometimes the very bottom. If an adviser had a great year, this was neither bolstered by previous years nor carried into subsequent years. The correlation was zero. And yet the consultants pocketed bonuses for their performance. In other words, the company was rewarding luck rather than skill.
~ Rolf Dobelli, The Art of Thinking Clearly, p. 283
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