[gmarx]

The coin flip being tired or a trope is irrelevant. The million and 20 may not even be correct (haven't checked). the point is that people see patterns even where they don't exist. That's why science has methods for telling whether a pattern really represents something or if it would likely be seen even if the data were random. Until you do those stats on hedgefund returns your irritation at the trope remains unconvincing.

[dsacco]

I suppose we're at an impasse then, because the claim wasn't mine; nor is it even sufficiently formalized as to be falsifiable (which really was my point here). We cannot apply scientific methods to claims that are only semantically meaningful. For example, the definition of "coin flip" was never even specified, which is why the constant use of the analogy is absurd.

When firms like RenTec exist and continue to empirically generate market-beating returns over 20-30 year timespans, the burden ceases to be on the critic of a claim to empirically disprove it, especially if it's not even falsifiable. Here, you are doing the same thing as the previous commenter, except you're not using the analogy.

You cannot open your argument with the premise that returns are purely stochastic if that's not self-evident - you need to prove that. But I have never seen a single individual attempt to quantify the analogy, not even in a forced way to make it support their thesis. It's taken for granted that superlative returns are purely chance, and the goalposts are constantly moved whenever someone brings up successful funds.

[gmarx]

I understand you have declared we are at an impasse so I will just take the "last word". Your second paragraph is mere assertion. I assert the opposite. The existence of extreme outliers is exactly what we see in statistical distributions all the time. Being able to identify them in retrospect is childs play.Doing it in advance is the trick. That fund very likely does have great skills and plans at work that happen to have been met with circumstances that made them work. Yes you can attribute that to skill.

[z0r]

All posters are more or less right in this comment chain, but talking about coin flips and renaissance in the same breathe _seems_ to be silly, if you've read about the latter. (Not an expert so I might have been mislead by what I've read...)