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#32: Christopher Cole On Appreciating Risk

Superinvestors and the Art of Worldly Wisdom

CHAPTER

The Recency Bias in Financial History

The last 40 years have been one of the most unprecedented periods of asset price appreciation. The average US pension system assumes a 7.25% return on plain assets. If we assume that their returns will be just 5% rather than 7.25%, then the unfunded liability jumps to a level that is multiple times the bank bailout of 2008.

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