The Morningstar Active/Passive Barometer Might Help Investors Improve Their Base Rates

In his book Thinking, Fast and Slow [1], Nobel Prize-winning psychologist Daniel Kahneman discusses how he stumbled upon two different approaches to forecasting while working for Israel's Ministry of Education to write a high school textbook about judgment and decision-making. Kahneman and his longtime collaborator Amos Tversky ultimately branded these two schools of forecasting "the inside view" and "the outside view." The inside view is deeply personal.