Base Rates and the Outside View
The inside view forecasts from the particulars of your case; the outside view starts with what happened to everyone who ever stood where you stand. Before underwriting a turnaround or an IPO, find the reference class, take its distribution as the first draft and only then adjust. The more luck there is in the domain, the more the base rate should govern.
14 books · 3 people behind it · 4 resources
Start here
- SuperforecastingPhilip E. Tetlock, Dan Gardner, 2015
- Think TwiceMichael J. Mauboussin, 2009
- Thinking, Fast and SlowDaniel Kahneman, 2011
The people behind it 3
Each person holds a book in this entry or names it in their own tags.
Academics 1
Journalists 2
Resources 4
- Bayes and Base RatesMichael J. Mauboussin · paper · How history should discipline a forecast's starting point.
- Bayes and Base Rates 2.0Michael J. Mauboussin · paper · Updated reference-class data for growth and margins.
- Drawdowns and RecoveriesMichael J. Mauboussin · paper · Base rates for how deep declines end and rebound.
- The Impact of Intangibles on Base RatesMichael J. Mauboussin · paper · Why accounting changes shift the reference class.
Books 14
Daniel Kahneman · 2011
Andrew WilkinsonCharles de VaulxFrank MartinMichael MauboussinMohnish PabraiRational Capital Investment FundSeth KlarmanStewart BrandAbi Tyas TunggalAlbert WengerAlfred LinAmy HoodBill GatesBryan JohnsonCharlie MungerDaniel BurkaDavid CancelDavid HellmannEv WilliamsJason FriedJason ZweigJulie ZhuoMarc AndreessenNassim Nicholas TalebNaval RavikantPaul BassatRay DalioRon ConwaySahil BloomSahil LavingiaSam AltmanSatya NadellaSophie BakalarTristan Harris
B. H. Liddell Hart · 1944 · Liddell Hart on why the lessons of history are so rarely applied
Will Durant, Ariel Durant · 1968 · A century of history compressed into recurring patterns and rates
Philip E. Tetlock · 2005
T2 Think Twice
Michael J. Mauboussin · 2009
Steven Pinker · 2011 · Long-run violence data against the narrative of a worsening world
Michael J. Mauboussin · 2012
Steven Pinker · 2018 · Long-run progress data set against pessimistic intuition
T2 Factfulness
Hans Rosling, Ola Rosling, Anna Rosling Ronnlund · 2018 · Global development data set against intuition; the outside view applied
Malcolm Gladwell · 2013 · Gladwell on underdogs and mistaken assumptions about advantage
Chuck Klosterman · 2016 · How present certainties will look to the future; outside view applied
Peter Bevelin · 2013 · Bevelin distilling observation and inference habits from Sherlock Holmes