It is a valuable lesson, but no matter how often taught it seems never to be learned. Assumptions are dangerous. Overconfidence is the most common, and from the point of view of an investor the most perilous, cognitive error. You have all heard about the experiments: a person is asked to estimate the weight of an elephant, and then asked to put a range around that estimate so that there is a 90% chance that the true weight is within that range. The range is always too tight, by orders of magnitude. We do not know what we thin
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