Overview

The law of large numbers states that over a large number of occurrences the average of the values of the occurrences approaches the mean. For example, if you tossed a coin 10 times, you might get 8 heads (80%) and 2 tails (20%); but if you tossed the same coin 1,000 times, the law of large numbers would direct the heads/tails results closer to the average of 50%. Another name for this phenomenon is “gambler’s fallacy.”—Nilus Mattive

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7 Mental Models That Will Make You a Better Investor - Paradigm Press, LLC.

In 1994, Warren Buffett's business partner and friend Charlie Munger gave a speech at USC Business School about the art of stock picking. What students didn't know was they were really in for a lecture on how to become a better thinker - or, as Munger put it, proficient in elementary, worldly wisdom.

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