IN SHORT, THE SUCCESS OF STEINHARDT, FINE, BERKOWITZ is difficult to explain, including for the former partners. But it does not follow that their success was merely lucky. When you sift through the story of the partnership, two factors stand out. Each helps to account for success in a way that is consistent with the commonsense rendition of efficient-market teaching: The market is difficult to beat—except when you come up with an approach that others haven’t yet exploited.
