794
n
Gods and villains
The same is often true for fund managers, and other people
who are trying to make money on the stock market. The
top-performing funds are not necessarily the best ones when it
comes to ability. For example, have you ever come across these
competitions in which people receive a starting sum to “play
the stock market” and after six months or so the person with
the highest return wins a prize or even a job? Stupid scheme by
design: the person with the highest return is by denition the
one that really did not have a clue, because the only way to win
such a contest is by making the most silly, illogical, and risky
allocation of funds, and get lucky. Skillful, careful players will not
lose their money, and likely get a
decent return, but won’t be the
ones to come out on top.
And the issue is: some bloke will
get lucky. Ninety-nine out of a
hundred cases it will go wrong,
but the ultimate winner is dumbo
number one hundred. The contest
by sheer design ends up picking a
nitwit as the winner.
Hence, watch out for “top
performers” in any business or
situation which involves risk.
The one coming out on top is
likely to be a moron who just got
lucky.
Executives: superhuman after all . . .
Where the previous deliberation may be extreme, I do think it is
true that we are usually not very good at explaining and attrib-
uting success – especially when it comes to ourselves.
It is a well-known aspect of our everyday behavior: when we
perform well, we take the credit ourselves; when something
goes wrong we blame something (or someone) else. This effect –