Rolf Dobelli on the illusion of skill

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

 

Tom Woods on redistributionist left-wing arguments

One of the major left-wing arguments (famously advanced by John Rawls but not exclusively by him); in support of redistribution is this: you don't deserve your talents, so neither do you deserve their fruits.

Translation: it's morally acceptable for us to seize your dough from you and distribute it to people who weren't so fortunate as to be born with your talents.

[...]

If the emphasis is on who is "deserving," then answer me this. Suppose eye transplants are possible. My child is blind. Your child has two functioning eyes. Does your child "deserve" those eyes more than my child? If not, then you are required to transfer one of your child's eyes to my child.

Even though the example is preposterous, the principle is the same. That's why philosophers have used this example to show the problems with the "you don't deserve X more than I do!" school of thought.

I think the eye example is a very good one. If I don't "deserve," say, my golf talents that earn me big bucks, I am equally undeserving of my healthy eyes, which are just as much a matter of luck as my golf talent.

~ Tom Woods, December 1, 2019

Warren Buffett on the value of bear markets

Only when the tide goes out do you discover who's been swimming naked.

~ Warren Buffett