I’ll add that for competitive games, you want to encourage your opponent to use more luck and less skill, for example by praising his superior dice rolling abilities, and reframe your skillful moves as totally lucky, no way that could happen again!
In poker, you’ll sometimes see a player get upset and criticize his opponent if he loses a hand because the opponent made a lucky draw or call (how could you call that, only one card could help you!) Rational players understand that having the opponent call with a bad hand is the only way they make money, so they’ll praise the lucky draw (great call, I just can’t seem to beat you!)
Thanks, I loved this post. Its obviously hard to distinguish luck from skill when it comes to investment returns, I don’t think focusing on money and track record would be enough to convince me of skill. I think I would need to also rationally evaluate the investment strategy to determine if it can be reasonably expected to beat the market. Common strategies like “we do what everyone else does but better”, or “we invest in value/growth” would probably not convince me (risk premiums, liquidity premiums, animal spirits probably affect market prices but probably not in a way that can only be reliably predicted by a “chosen one”). Strategies like “we have a data connection that’s 1 millisecond faster” or “we hide microphones in every lawyer’s office” seem like they have a chance to beat the market, but they’re hard/expensive to pull off. With respect to covid, it wouldn’t be enough to say “I knew stock prices would go down” without explaining how you knew, what your confidence was, how you determined your confidence and your prediction accuracy/confidence calibration (the lack of confidence estimates on predictions is a huge red flag for me). My sense is that when someone says “my intuition tells me stock prices will go down due to covid”, what they mean is something like “the market price currently implies the risk of a global pandemic is 20%, but my intuition tells me it’s closer to 50%, therefore stock prices should go down half the time and my returns should be positive after 2 or 3 global pandemics”. However, even with hindsight, it seems hard to determine if the actual risk of a global covid pandemic in Feb 2020 was 20% or 50% or some other amount, so focusing on outcomes doesn’t look reliable. It seems like evaluating the prediction process rather than the outcome would be an easier approach (“we hide microphones in all WHO offices” seems like it would work).