MICHEL PIREU: Strategy remains a far better approach than stock-picking
Identifying winners might be more about luck than some strange secret science
“Until we can distinguish between an event that is truly random and an event that is the result of cause-and-effect,” writes Peter Bernstein in his book Against the Gods, “we will never know whether what we see is what we get, nor how we got what we got.
“When we take a risk we are battling on an outcome that will result from a decision we have made, though we do not know for certain what the outcome will be. The essence of risk management lies in maximising the areas where we have some control over the outcome while minimising the areas where we have absolutely no control over the outcome and the linkage between effect and cause is hidden from us.”