A child’s birthday party can be magical. Junk food, games, friends, and . . . gifts! Everything a kid dreams of. I put a lot of thought into planning my own party as a kid, and, unbeknownst to my parents, employed my own version of portfolio theory. Careful thought was given to the invite list based on probabilities of obtaining the best gifts and weighing these probabilities against the ever-present backdrop of the midparty tantrum. I wanted to maximize my return in terms of quality gifts but minimize the risk of inviting someone who was likely to throw a fit if they didn’t get to sit next to me. Ultimately, I had to craft a balanced invite list that, drawing on my limited understanding of portfolio theory, maximized gift ...

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