Investing: Probabilities Rather Than Certainties

Investing: Probabilities Rather Than Certainties by Cook & Bynum Investing is a probabilistic endeavor, and being “certain” of a particular outcome – whether it is the direction of a commodity’s price, the shape of a yield curve, a smooth and steady increase in a company’s earnings, etc. – is the enemy of good decision-making and a recipe for permanent capital loss. A talk that Jason Zweig gave back in 2001 is a useful reminder of this idea. So why did such smart people make such public fools of themselves? Precisely because they had been so right for so long that…