In this piece begin, ask everybody to make simulation of a circumstances:
Suppose a circumstances -- you are current hold invests, calculate according to your model, be in 5 years of future, this investment original capital does not have the probability that return is 87% , with the probability that keeps balance now be 13% .
Excuse me, can be you made why to choose?
Clever be like you, affirmative meeting tongue-lashed me to give a extremely foolish title, do this still need to use brain? It is a dog can know -- run rapidly road.
Really, the circumstances that this title gives out is again clear did not pass: Big probability deficit, small probability keeps balance, 0 probability accrual. This kind of choice inscribes pupil to be able to be done.
So, let me increase difficulty, impose a requirement. In above circumstances, if you want to cast this investment now, you must pay the cost of 30% .
That is to say:
A choice: Cast piece, you now with respect to deficit 30% .
B choice: Do not cast piece, you avoided the loss of instantly, but your future is likely deficit 100% .
Acknowledgment is great statistical, yield the expectation profit that we will come to calculate two kinds to choose.
The expectation accrual that A chooses is - 30% .
The expectation accrual that B chooses is - 87% .
Calculate so, chose not hard actually- - choose A, your loss wants small much.
Let us see the 3rd kind of situation again. Your doctor tells you, as a result of blemish of some kind of gene, the probability that you did not contract breast cancer is 87% .
Cut or do not cut?
This is the choice problem that star Anjilina Zhuli faces. Study carefully, you discover this circumstances and the situation that above paragraphs assumes are almost same not hard.
Excising mammary gland is significant loss admittedly, but for the loss with deadly to cancer photograph, give the weight of 30% should about the same. In addition, after excision, the probability that contracts breast cancer from 87% drop 5% the following, specific expectation value computation did not spread out here. As similar as afore-mentioned circumstances, clever choice is A apparently -- excision.
But meanwhile, a so clever decision, caused not little controversy however. A lot of experts jump out, said to carry BRCA1 gene to also do not mean regular meeting to get cancer. Some oppugns Zhu Li to regard the public as the character even, have urge a woman excessive iatrical suspicion.
And what I want to say truly is, this is a test that our everybody should face when facing oneself problem actually -- small probability imagines disease.
Famous finance trades psychology coachs division mark · Douglas
The small probability in once represented investment with an interesting example imagines disease. He says for -- bagman effect.
He can be promoted to oneself ceaselessly, the stock in the hand is how good. Although very much adverse element comes out,also meet turn a blind eye to.
For instance, everybody wants to capture decuple (rise 5 years decuple) , but this is an apparent small probability incident, according to A historical experience, probability won't exceed 5% commonly. But the salesman that a lot of people became him, persuading his to believe the stock in him hand ceaselessly is decuple.
Penetrate only dense fog, ability sees the merit.
And I like Zhu Li to be in very much that word of him article ending,
"Life always accompanies countless challenges,
Only those we are OK
Assume the challenge that accuses with the palm,
Ability won't let our heart give birth to fear. Ability won't let our heart give birth to fear..
" new York Times " publish an article " my medical treatment chooses "
The consensus that this lets me remember Great Master of a lot of investment -- conservatism person ability lives for a long time.
"Small probability imagines disease " the symptom that is class of a dream -- major moment, it resembles you the blain blain on adolescent face is euqally piquant. And certain and specific time, it is likely however as thirsty cancer cell euqally deadly.
If you want to go further on the way that investing, you need to understand it, view illuminate it, beaten it. Its vitality is so tenacious, because its 4 roots beard is dense very grave.
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With beard one, subconscious in, everybody maintains he is extraordinary. So, although classroom goes to school " large number is theorematic " when with pleasure. But arrived in reality, everybody put him " fraction is theorematic " inside.
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The root is needed 2, as a child we are grown in the public opinion environment of advocate miracle. Alleged miracle, it is small probability incident substantially. Conduct propaganda of exceeding miracle type makes us right the acknowledge of small probability incident produced deviation.
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The root is needed 3, major person is excessive to his ability self-confident, this had been proved by the laboratory of countless psychologist.
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The root is needed 4, major person is excessive to his luck self-confident. The example of a clearly is, obviously in the 6 small probability incident that combining variety is a model, but still still have everyday by tens of thousands person scramble for sth.
Still have antidote?
First the beginning from introductory class. Have the way to deal with a situation of 3 groovy sexes.
1, nurturance " probability thinking " thinking habit, study is done according to probability magnitude decision-making.
2, go obtaining a good model. For instance, anjilina Zhuli is before those who make excision mammary gland is decision-making, those who use is famous American Gail model.
3, the executive power that develops oneself.
Can say the necessary assignment that is introductory class player this at 3 o'clock. Nevertheless, come here can be not everything is just fine.
Real two big challenges still are from the back.
The biggest challenge: Good model cannot be gotten
A lot of moment, you cannot be calculated accurately at all probability. For instance, you are calculated accurately very hard the probability that gives a stock to will rise tomorrow. This moment, decision-making problem becomes very complex.
Right now, the method of an effective is, adjust the view that considers an issue and cycle. Below new periodic framework, the judgement that allows probability becomes a possibility.
For example, you are imponderable the probability that a stock will rise tomorrow, but, trade an issue. Let you calculate the probability that whether a stock rises after 3 years, this issue becomes simpler.
Because, short-term in light of, the factor that affects share price is too much, imponderable. But will for a long time look, the factor that affects share price is a lot of less, main area becomes the mainest factor.
In fact, this is the road of the success of value investor of the representing with Buffett just about.
The 2nd big challenge: Probability numerate,
But executive power is insufficient.
Believe you also have similar experience, from rational angle, a lot of things should be done; But the angle from sensibility, a lot of works are done hard. For instance, mammary gland of Zhu Li cut away decides this, although be clever, but do very hard however.
This moment, a feasible method is, as far as possible decision-making and exterior change. For instance, in stock or option market, each person that succeed can emphasize trade systematic importance.
Trade system, namely decision-making and exterior the result that turn. Design your concept into the system, let a system make next decision-making, can avert the interference of factitious mood.
Sober like blade, ability behead breaks vexed silk.
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