[sbaqai]

I understand what you're saying. But don't you have to consider the number of times Buffett exercised his investment decision, and not only when he's put money up?

You'd have to consider all those deals he passed up, as using his investment strategy, no? He may make 1-2 investments a year, out of maybe 200 investments available to him that he's analyzed. Thats still 200 investment decisions, not 1 or 2, which I'm assuming Taleb is using.

Wouldn't a thorough analysis consider four possible outcomes? The first event is the decision to invest (Y/N). The second event is whether their decision worked in their favor (+/-). (Y+, Y-, N+,N-) Y+ and N- are successful use of strategy. Y- and N+ are failed strategy. Same for Soros.

Example: Consider all of the investments that were passed up, that would have been terrible investments. That could be considered successful employment of an investment strategy. Buffett inherently (based on his style and risk profile) has a larger proportion of these.

[kragen]

> But don't you have to consider the number of times Buffett exercised his investment decision, and not only when he's put money up?

You might think so, but as it turns out, no. Try simulating it.