Mortal Monks

Warren Buffett's Probability Analysis is His Key to Success Warren Buffett is synonymous with wealth. At the core of his investing philosophy, one basic principle – elementary probability – has been the north star of his strategy. Stable-boy selection.         Warren Buffett began applying probability to analysis as a boy. He devised a tip sheet called “stable-boy selections” that he sold for 25 cents a sheet. The sheet contained historical information about horses, racetracks, weather on race day, and instructions on how to analyze the data. For example, if a horse had won four out of five races on a certain racetrack on sunny days, and if a race was going to be held on the same race track on a sunny day, then the historical chance of the horse winning the race would be 80%. The Evolution of Warren Buffett .          As a young man, Buffett used quantitative probability analysis along with "scuttlebutt investing," or "the business...