Expectations Investing with Michael Mauboussin

'The Book of Predictions,' compiled by Irving Wallace, David Wallechinsky, and Amy Wallace, presents a fascinating collection of predictions made by various futurists across different fields. The book offers a glimpse into the challenges of predicting the future, highlighting the limitations of expert knowledge and the impact of unforeseen events. While some predictions prove prescient, many others fall short, underscoring the inherent uncertainty in forecasting. The book serves as a reminder of the complexities of predicting future trends and the importance of considering a range of possibilities.

In this book, Philip E. Tetlock evaluates the predictive abilities of experts by analyzing 27,451 verifiable predictions made by 284 world-renowned experts over more than 20 years. He finds that expert predictions are often no better than random guesses and identifies two types of thinkers: 'hedgehogs,' who are confident in their single, overarching idea, and 'foxes,' who are more eclectic and adaptable. Tetlock argues that foxes are generally more accurate in their predictions due to their ability to consider multiple perspectives and adapt to new information. The book also explores how the media often favors hedgehogs for their confident and decisive statements, despite their lower accuracy.

This book, written by Alfred Rappaport, provides practical tools and tests for corporate strategies that create shareholder value. It covers applications in business planning, performance evaluation, executive compensation, mergers and acquisitions, interpreting stock market signals, and organizational implementation. Rappaport emphasizes the importance of focusing on long-term strategies rather than short-term gains and explains key concepts such as corporate value, shareholder value added (SVA), and the role of shareholder value in decision-making. The book includes case studies, such as the acquisition of Duracell International by Gillette, to illustrate the intricate decisions and risks involved in mergers and acquisitions.