Worth Reading

As regular readers are well aware, I don’t frequently offer links to articles, largely because there are others who do it so well (such as Joe Calhoun for Real Clear Markets, Tadas Viskanta for Abnormal Returns, Barry Ritholtz and Josh Brown, among others). But there are four pieces that I want to highlight today, particularly in light of my recent work on the so-called “Yale Model” of investing (see here, here and here).

• Beating the Market Has Become Nearly Impossible
• You’ll never be a Yale superman
• Is Yale a Model?
• Time to Ditch the Yale Endowment Model

I also want to commend Michael Mauboussin’s fine offering on outcome bias which, coincidently, came out the same day I wrote about it (much less comprehensively). It should be read along with his excellent book, The Success Equation, which I also heartily recommend.

• Outcome Bias and the Interpreter

Happy reading.

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Outcome Bias

While I was concluding a difficult cross-country trip last evening, my Chargers were wrapping up a surprising win against the Indianapolis Colts. To clinch the win, Nick Novak hit a 50-yard field goal, his fourth of the night, with 2 minutes left to give the Chargers a 19-9 lead. ESPN’s highlights are shown below.

There should be at least three clear takeaways from these highlights and from the game itself:

1. The Bolts’ “powders” are the best uniforms in sports;
2. Rookie receiver Keenan Allen was a steal in the 3rd round of the draft (full disclosure: he was a teammate of my younger son at Cal); and
3. Kicking that last field goal was a mistake.

My focus here is #3.