Baseline and denominator

Count the opportunities and exposures, not just the hits, so you know what the successes are out of.

A friend at dinner brags that two of his stock picks "hit big" this year, and you leave half-convinced you should copy his approach. Notice what you actually heard: the hits. You never heard how many picks he made, how much money rode on each, or what a boring index fund did over the same stretch.

The move is to count the opportunities and exposures, not just the successes, so you know what the wins are out of. The cue is any success story quoted without a total. Steps: ask for the denominator (two winners out of how many picks?), count the failures and the exposure (dollars committed, months held), and establish the starting state, meaning what doing nothing would have returned in the same period. When it works, "two big wins" becomes "2 winners out of 31 picks, trailing the index he could have bought passively," and the urge to copy evaporates or earns real justification. Skip the counting when no live decision depends on the rate; auditing a friend's brag for sport is entertainment, not evidence work, and it costs you goodwill you may want later.