Recently, I came across this exquisite investment article which discusses a phenomena called the Babe Ruth Effect and its application to financial portfolio management. The central takeaway from the article — “that the frequency of correctness does not matter; it is the magnitude of correctness that matters” — hit me like a lightning bolt of truth. The statement awakened a clarity about a variety of elements related to track and field, including training, coaching, as well the industry of the sport itself. What follows is my attempt to inspect how and why we could apply the mental model of the Babe Ruth Effect to these areas.
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