Survivorship Bias

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As the famous quote by Prime Minister Benjamin Disraeli states:  “There are three kinds of lies – lies, damned lies, and statistics”. In this installment of Financial TIPs we will focus on the third type of “lie”, statistics. One trick of the trade we must watch for when accepting or rejecting a performance analysis is survivorship bias; using statistics to mislead.

What Is Survivorship Bias?

Only the strong survive. This is a familiar adage because it’s often true ...

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