Navigating investment challenges: The interplay between skill and luck
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Navigating investment challenges: The interplay between skill and luck
Navigating investment challenges: The interplay between skill and luck
Allan Gray Unit Trust Management
Q3 of 2024 | 8 months ago
Games can be categorised along a continuum based on their reliance on luck or skill. Roulette, for instance, is purely a game of chance. Despite occasional wins, the player will lose in the long run due to the wheel’s inherent design and the odds a player must accept. Conversely, chess is a game of skill, where a novice stands little chance against a grandmaster. While investing leans more towards the skill end of the spectrum, macroeconomic factors, geopolitical events and other unforeseen incidents introduce an element of chance into the equation, particularly over the short term.