Have we ever considered the role of luck in our portfolio returns? Have we been outperforming the markets because of successful stock picking or just riding the luck of a market rally? Similarly, have we been underperforming the markets due to poor stock decisions or just plain bad luck? Truth be told, it is hard to tell.

If we were to define luck, it is essentially something that is out of our control. If there is some aspect of controlling luck, we would call that skill. Looking at the professional poker players, none of the top 5 WSOP bracelet winners would be there based on luck. For example, Phil Hellmuth, the top professional poker player, has won 14 WSOP bracelets and appeared at the final table 54 times. If it were to be down to luck, there would be randomness and we would not see the same faces year after …