Last week I riffed on distinguishing skill vs luck.

I should have also linked to Michael Mauboussin's excellent book The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing

Here's a nice summary from my friend Sam Arbesman.

One of the key ideas is that early in a market skill predominates; as the competitors get more skillful, luck tends to predominate as the skill component is competed away.