Five rules describing the dynamics of balance of opposing forces that create competitive situations.
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This article explains how all opportunities are openings in the future, but a number of our natural forces work against our being able to see where openings will appear. One is the bandwagon effect, our tendency to follow the crowd. By definition, this prevents us from finding opportunities.Another is our systematic disregard for regression toward the mean, expecting extreme performance to continue. Another is known as the recency effect, weighing recent events more than earlier events. These three problems together lead to one of the most common strategic mistakes making "straight line" predictions. When a trend continues in one direction for a period of time, we naturally begin to think that it will always continue in that direction. The tendency disguises our real opportunities.