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Barry Ritholtz

The March Madness Theory of Investing

There are similarities between investing and trying to predict the teams that advance in the NCAA men's basketball tournament.
That didn't go according to plan.

That didn't go according to plan.

Photographer: Kevin C. Cox/Getty Images

We are down to the Sweet 16 in the NCAA's men's college basketball tournament, otherwise known as March Madness, which depending upon your perspective is either the most exciting month in sports or the American collegiate plantation system writ large.

As is my wont, I seek out lessons in what I see, hunting for parallels in sports, politics, et al. to the world of investing and trading. In college basketball, the similarities are overwhelming: the parade of upsets has already given rise to many lessons that might go overlooked, but for your scribe’s eagle-eyed observations.