A book review of Michael J. Mauboussin's Think Twice: Harnessing the Power of Counterintuition by Capital Ideas Online
Here are some parts that I have marked in my copy of the book "Think Twice: Harnessing the Power of Counterintuition" by Michael J. Mauboussin.
- “The statistical rate of success and failure must be reasonably stable over time for a reference class to be valid. If the properties of the system change, drawing inference from past data can be mis-leading. This is an important issue in personal finance, where advisers make asset allocation recommendations for their clients based on historical statistics. Because the statistical properties of markets shift over time, an investor can end up with the wrong mix...
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