Wealth and Skill

"Wealth mobility, it turns out, requires idiosyncratic risk, concentration, and (nonrecourse) leverage--all factors that MPT seeks to eliminate in a standard diversified portfolio."

"In the absence of any redistribution, the distribution of wealth is unstable over time and becomes concentrated entirely at the top. This occurs despite the fact that all households have identical patience and skill."

"There are three aspects I will emphasize. The first is related to the number of players...second aspect is sample size...Finally, there's the aspect of how the game is scored."

"the large number of RPS that we have documented...implies that either U.S. stock markets are pervasively inefficient, or that the number of rationally priced sources of risk in equity returns for theorists to understand and explain is far larger than previously envisaged."

"But the data indicate that there is an enormous amount of variability in deliberate practice-even in elite performers. One player in Gobet and Campitelli's (2007) chess sample took 26 years of serious involvement in chess to reach a master level, while another player took less than 2 years to reach this level."