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Posted on June 19, 2013 @ 09:27:00 AM by Paul Meagher 
If you are a good poker player you will still experience losing streaks. If you are an astute Angel Investor you will still make some bad investments.
In the case of poker, you can play well and win; play well and lose; play badly and lose; play badly and
win. In other words, there is no one-to-one correspondence between the process employed and the results
obtained because winning and losing are not just a matter of playing skillfully or not; it is also a
matter of luck. However, over time, if you play skillfully, you can expect the effect of the luck factor to diminish in importance and the effect of the skill factor to emerge in importance. In the long haul, there is some correlation between the process followed and the results obtained.
Likewise, in the case of Angel Investing, we can invest well and win, invest well and lose, invest badly and lose, and invest badly and win. In the long haul, however, if we are skillfully identifying good companies to invest in, we might expect that some of these fluctuations would wash out and we would see better than normal returns on our Angel Investments.
What this suggests is that investing is less about results obtained in the short term and more about the process followed in the long term.
When we play poker, we control our decision-making process but not how the cards come down. If you correctly identify an opponent's bluff, but he gets a lucky card and wins the hand anyway, you should be pleased rather than angry because you played the hand as well as you could. The irony is that by being less focused on your results, you may achieve better ones. ~ Nate Silver, The Signal and the Noise, 2012, p. 328.
To become a good poker player these days involves reading a lot about game strategy and hand probabilities. What it takes to be a good poker player today is different that what it took to be a top poker player 30 years ago because poker players today are more educated about the formal aspects of playing poker and they are playing against similarly educated poker players. We might expect that business investing will move in a similar direction and that some investors will improve relative to others based upon whether they are able to incorporate more formalized knowledge about how to make good angel investment decisions. These are business investors who are more focused on the process used to make business investments and less-focused on short term results.
If you don't accept the irreducible role of luck and chance in business investing, then you will likely focus more on results than how skillful your investment process is.
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