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An expression meaning that someone has misunderstood a situation, or wasted a fair amount of effort. Its original use was in racoon hunting. This activity was traditionally conducted after dark and hunters used dogs to chase the racoons. The small animals would often hide in trees to escape their pursuers, a dog who was following the racoon would stop and bark at the bottom of the tree, but it being night and dark, it was quite often the case that the dog would literally be “barking up the wrong tree.”

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