What is the "outside" view and how can this help analysts?*

  • Author:
    Geoff Robinson
  • Level:
    Intermediate to Advanced
  • Study time:
    Always adding content
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Course overview
In the research note titled "What is the 'Outside' View and How Can This Help Analysts?", we explore a pivotal concept that transcends conventional financial analysis. Traditionally, investment analysts have relied heavily on the "inside view," delving deep into the idiosyncratic details of a specific investment or company to forecast future performance. However, this approach, while rich in contextual understanding, can be myopic and prone to overconfidence biases.

The "outside view," a term popularized by psychologists Daniel Kahneman and Amos Tversky, champions a broader perspective. By categorizing an investment issue as a member of a larger ensemble, analysts can draw on empirical data from this wider class to inform their predictions. This methodology provides a statistical backdrop against which the unique aspects of the case can be weighed, offering a counterbalance to the inherent subjectivity of the "inside view." Embracing this perspective, analysts gain access to a more diversified cognitive toolkit, enhancing the robustness of their forecasts and potentially leading to more grounded investment decisions.

What's included?

  • Fundamental research written by Geoff Robinson
  • Analyst-curated insights
  • Embedded podcasts
  • Embedded videos
  • Downloadable models, where applicable

Who should read this?

This research note is essential reading for investment professionals, financial analysts, and portfolio managers seeking to refine their analytical processes and decision-making frameworks. Additionally, it offers valuable insights for behavioral economists, psychologists interested in financial decision-making, and academics teaching finance-related courses.

It is also pertinent for advanced individual investors and anyone involved in the field of risk assessment who wishes to understand how cognitive biases can affect financial judgments and how adopting a broader perspective can lead to more accurate predictions. By integrating the principles of the "outside view," readers can enhance their critical thinking skills and apply a more holistic approach to their investment strategies.

Why TheInvestmentAnalyst.com?

We are the only training house that is able to bring top-ranked analyst experience into your classroom. We buck the trend. Most training businesses recruit junior ex-bankers to become their trainer. Our instructors cut their teeth teaching and then gain senior experience with investment banks.
We believe, you could not be in better hands.

Geoff Robinson FCA FMVA MFM

Thought leader, instructor, writer, financial influencer, Former UBS Managing Director and 8x #1 ranked analysts EMEA Institutional Investor Survey
Geoff has had a varied career. He was a Managing Director within UBS Equity Research, leading their Global Fundamental Analytics franchise. During this time, he was #1, ranked 8x in the EMEA Institutional Investor Survey. Before UBS, he was a material equity investor and LBO co-investor in two market exited training consultancies. Geoff has a passion for learning and is well-known for his ability to break down complex subject matter and distil it to an audience in a digestible and engaging manner. He brings this passion to TheInvestmentAnalyst.com.