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To be fair, David Ignatius is not saying that Warren Buffett should be allowed to pick our CIA chief. He's saying that Obama should be looking for a managerial director, who will work to improve the agency's bureaucracy, rather than an ideological director, who will be working to change its mission. Ignatius is just confusing things by calling this person "the Warren Buffett of intelligence." But the fact that Ignatius thought that would be a good analogy suggests there's still some truth to Matt Yglesias's point that "Buffet doesn’t even particularly seem to have gotten rich through management prowess. Rather, he’s either been incredibly clever in his investment decisions or else incredibly lucky or some combination of the two. And you see this sort of thing all the time. The assumption that not only did rich people get rich in part by being smart, but that the richness of rich people must be precisely proportional to their degree of brilliance." Buffett, of course, has a uniquely sage-like reputation, but you see this sort of thing all the time. Which suggests to me that more people should read Malcolm Gladwell's profile of Nassim Taleb:
For Taleb, then, the question why someone was a success in the financial marketplace was vexing. Taleb could do the arithmetic in his head. Suppose that there were ten thousand investment managers out there, which is not an outlandish number, and that every year half of them, entirely by chance, made money and half of them, entirely by chance, lost money. And suppose that every year the losers were tossed out, and the game replayed with those who remained. At the end of five years, there would be three hundred and thirteen people who had made money in every one of those years, and after ten years there would be nine people who had made money every single year in a row, all out of pure luck. Niederhoffer, like Buffett and Soros, was a brilliant man. He had a Ph.D. in economics from the University of Chicago. He had pioneered the idea that through close mathematical analysis of patterns in the market an investor could identify profitable anomalies. But who was to say that he wasn't one of those lucky nine?Meanwhile, one of Buffett's famous decisions was to sit out the tech boom because he felt the fundamentals to hard to understand, and thus too hard to predict. "I think it's much easier to predict the relative strength that Coke will have in the soft drink world than Microsoft will in the software world," Buffett said. "That's not to knock Microsoft. If I had to bet on anyone, I'd bet on Microsoft. But I don't have to bet." In other words, he's built his career on the idea that you should have specific knowledge of your particular area of labor, and when you don't possess that expertise, you should sit the subject out. His success is a stark repudiation of the idea that brilliance in business is broadly transferrable.
