Re:Black Swan Farming
by ghshephard on Monday September 10, 2012 @04:08AM
(#4498797)
The fundamental fallacy underlying the "Darts are just as good as people" is that the _entire reason_ the dartboard approach is so successful is because of the massive number of experts who have priced everything close to perfectly.
No such market exists for startups - so selection is required.
You're right. The dartboard experiment would be better (faster) if you had just as many dartboards as investors. Then you could compare the distribution and not just a single result.
Re:Black Swan Farming
by raverbashing on Monday September 10, 2012 @04:19AM
(#4498825)
If he had said "all people add value" I would've agreed with you
Well, you could try ranking results and calculating a score based on how each person outperformed the dartboard, then calculating a score over time.
This is wrong. If the dartboard consistently underperformed most stockpickers (i.e. say it ranked around the 30th percentile year over year) then you could make the case that (some) people add value. If, on the other hand, the dartboard is near the mean of the distribution of outcomes, you could make a case that it's all luck.