In 1990, David Letterman asked his friend Jerry Seinfeld how his new sitcom was going.
Jerry said there was one frustrating problem: NBC supplied the show with teams of comedy writers, and he didn’t think they were getting much good material from them.
“Wouldn’t it be weirder if they were good?” David asked.
“What do you mean?” Jerry asked.
“Wouldn’t it be strange if they could all just produce reams of hilarious material day after day?”
Recalling the conversation a few years ago, Seinfeld laughed and told Letterman: “It’s supposed to be hard.”
Of course it is. There is no world in which even the most talented comedians are consistently good.
Many things are governed by that truth.
Every investor knows, or should know, the truth about money management: More than 80% of professional investors underperform their benchmark (more depending on how you calculate it). Those stats are used in an often cynical way to show how the industry is broken, crowded, and ineffective.
But wouldn’t it be weirder if it were different?
Wouldn’t it be strange if every slightly ambitious investor could pick a few stocks and earn returns capable of generating dynastic wealth with other people’s money? Or even most of them? How and why could that world possibly exist? The reason Warren Buffett is interesting is because there’s only one of him.
About 1% of college basketball players make it to the NBA. That funnel doesn’t seem odd – no one would say college basketball is broken, (Read more…)