An eye-opening thing I’ve been thinking about recently is hit rate. In the context of investing, your hit rate is how often an investing idea or decision is correct. The concept isn’t new to me, but a book I read recently, Stock Market Maestros, contains a surprising stat. Using years of historical buy-and-sell data and a top-notch analytics platform, the authors established that the best stock market investors, who have gigantic returns, are right only about 50% of the time.

This got me thinking about my entrepreneurial decision-making hit rate. When I was running my company, I never measured my hit rate. But if someone had asked, I confidently would have proclaimed it was probably 70% to 80%. Reading this book humbled me, and I know that statement would be false. I’m pretty sure it was more like 40% to 49%. Maybe 50% at best. What I now realize is that as an entrepreneur, I was wrong a lot, and that’s normal, even for the most successful people.

I now think about decisions I make as having a higher probability of being wrong than I realize. That change has made me more open to alternative decisions and their higher probability of being right than I might naturally think. I also spend time thinking about the payoff ratio, also known as magnitude. What’s the magnitude of the consequences of a decision, right or wrong?

I think that hearing about this 50% hit rate is making me more flexible mentally, which I hope improves my decision-making.