A set of rules to develop a behavioral edge – Part 6
The strong bias toward believing that small samples closely resemble the population from which they are drawn is also part of a larger story
patterns
Let’s face it, we’re really bad at patterns and statistics
In our hunt for the investment guru we get hit with a double whammy of cognitive errors. We see patterns in random data because we, as humans, love to find causes and patterns suggest causes. And, we jump to conclusions on the basis of statistically insignificant data, again, because we love to identify causes.
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