StockConsulting agencies often publish various statisticsNumberdata, and investors who do not scrutinize the w88 casino sizes of these statistics often suffer losses. This leads to the law of small numbers problem of representational bias.

Statistics has a law of large numbers(Law of Large Numbers), also known as“Theorem of Large Numbers”, Law of Large Numbers or“Law of Averages”, that is, only by sampling a large w88 casino can we reflect the overall population, and only by conducting research can we draw rules. The direct consequence of representativeness bias is that it is insensitive to w88 casino size and is subject to“Law of decimals”11194_11242

Kahneman and Tversky197411867_11879

Experiment 1, there are two hospitals in a certain city, and about 100 babies are born in the big hospital every day45babies, approximately born every day in a small hospital15babies. The birth rate of boys is approximately50%. But the exact proportion of boys born varies from day to day. Every year, hospital statistics show that the birth rate of boys is higher than60%Which hospital do you think has more days?A, big hospital;B, small hospital;C, as many. Kahneman and Tversky's experimental results showed that when subjects answered these three questions,21People think there are many big hospitals,21People think there are many small hospitals,53People think the same.

The author has done many studies and the conclusions are similar to this, total1961People answered this question, among themN(A)=417(21.3%)；N(B)=601(30.6%)；N(C)=943(48.1%)。

And probability theory tells us that there will be more such days in small hospitals than in large hospitals, because the w88 casino is larger(Big Hospital), the closer50% This average value, while small hospitals have small samples, deviate50%This average is more likely.

Experiment 2, it is known that the average eighth grade student in a cityIQScore is100. randomly selected from these w88 casino-age children50People as samples. The first subject1Qfor150, what do you think the selected one50Personal w88 casino averageIQWhat is the score?

Many people’s answers are still average points100. The author has done many experiments in the country,70%The above subjects answered the same100. In fact, this50PersonalIQThe average is101. Because of the first childIQYes150, remaining49The expected value of a child, which is the theoretical average, is still100, therefore, this50PersonalIQTotal score is5050(4900＋150), divided by50, for101。

The expected value is different from the average value and should not be confused here. To simply understand, the expected value is the theoretical average. Think that average is still a score100people may assume that in the remaining49One of the children must appearIQ's low scoring general150's score“Offset”Drop it. Such a view actually assumes that chance events have a self-correcting function. In fact, accidental events in small samples do not have a self-correcting function, and an extremely high score may not necessarily be balanced by a corresponding extremely low score. The rest of the w88 casino is just a random occurrence“Dilution”But not“neutralization”, so that its average is close to the overall average.

Large w88 casino data, extreme data, and accidental events have the function of self-correction. If there is height in a large w88 casino2meter10people often have height1meter5Someone to correct it. But in small samples, such corrections may not occur. The reason why people make judgment errors is that they believe that any small w88 casino or event should have the characteristics of the entire domain. In reality, extreme results are more likely to appear in small samples than in large samples.

在“Law of decimals”In this situation, investors will unconsciously exaggerate the probability of occurrence of events in a small w88 casino. Especially when encountering major events or extreme events, investors will often pay too much attention to the event, which is very likely to cause overreaction and cause huge fluctuations in the overall market. in“To generalize from a partial perspective”Before making investment decisions, investors often mistakenly infer that the entire problem has such characteristics based on the appearance of representative characteristics due to lack of in-depth consideration of the problem and in-depth exploration of the ins and outs, and then make decisions based on usual concepts and experience. In this way, investment decisions are affected by superficial phenomena, just like“The blind man touches the elephant”, often omitting a lot of useful information, resulting in hasty decisions. If the most important information that affects decision-making happens to be omitted, decisions made under representativeness bias will lead to serious biases.

Representational bias is a behavioral bias in which decision makers tend to use past experience and cognition to understand new things when faced with complex and fuzzy information. The occurrence of representative bias is related to the inert thinking and fluke psychology of decision makers: when faced with massive information in the securities market, investors rarely comprehensively and objectively evaluate all information. Because of inert thinking, people tend to choose familiar and easy-to-process information and ignore information they do not understand, and then apply old methods to new problems.

If you see a report that four-fifths of investors made profits in this market, but the report does not say how many people were surveyed for this ratio, it is not convincing. Investors need to dig deeper and ask: What is the w88 casino size? if“Use this method270Investors189Profits”, then it has reference value.

The same is true for reports on listed companies. I once saw such a report made by a well-known domestic home appliance company: InGCountryXNo. 1 in product sales ranking,GGuozuo is a veteranIndustrializationCountry, famous brandMofXThe product has always been the best. Can this company make a breakthrough?MThe company’s home country has surpassed itself and reached the first place in the rankings. What a boost to the morale of the Chinese people! Many investors rushed to buy the company's shares. After subsequent research and interviews, the author found that the companyXProduct only inGA small town in the country maintained the first place in the rankings for a month. The report avoided the w88 casino size and cannot be said to be a false statement, but it misled investors.

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