Expected Value

Each outcome's payoff weighted by its probability, summed. It separates good decisions from good outcomes: a position can lose money and still have been correct, or pay off and still have been reckless. The discipline is writing the probabilities down before the market grades the paper.

7 books · 4 people behind it · 3 resources

Start here

Thinking in BetsAnnie Duke, 2018
Fortune's FormulaWilliam Poundstone, 2005
Against the GodsPeter L. Bernstein, 1996

The people behind it 4

Each person holds a book in this entry or names it in their own tags.

Investors 2

Peter L. Bernstein1 book here

Mohnish Pabrai1 book here

Journalists 2

Peter L. Bernstein1 book here

William Poundstone1 book here

Resources 3

Probabilities and PayoffsMichael J. Mauboussin · paper · The practicalities and psychology of expected value.
The Value of Probabilistic ThinkingShane Parrish · essay · Bayesian updating, fat tails and asymmetries together.
Decision JournalsShane Parrish · essay · Recording the reasoning so hindsight cannot rewrite it.