65: Over-Optimizing Your Investing Approach Leads to Death

We see pickiness permeating across society today. We don't like being wrong or feeling dumb. We think we can prepare for every little thing that comes our way. MLB teams are experiencing the pitfalls of over-optimization. Instead of giving batters as many at-bats as possible, they optimize for how each batter does versus the opposing pitcher while also considering the game is home or away, day or night, recent performance, and so on. When you consider all of these factors, the sample size decreases. This makes the decision less robust and you more likely to experience something "unexpected". Well, yea you didn't expect it because your sample size is five! How can you possibly gain any reasonable expectation from such a small sample size?