How To Lie With Statistics – Darrell Huff

How To Lie With Statistics – Darrell Huff

Regression to the mean. (Average Regression)

Reporter Tim Hardford recently reported that the American Communications Association has just awarded the Communicator of the Year 2017 to Oscar Munoz (CEO of United Airlines). The name of the uncle is engraved in the prize, and it is not clear that the “miss” happened by Munoz in handling Mr. David Dao was pulled from the plane.

The American Architects Association awards excellent awards to Kemper Arena, the award ceremony takes place at an Arena designed by the Arena; After a few hours, the roof of this program suddenly collapsed.

Life is literally black.

There was a friend who worked as a boss, just called up and praised one of the staff the previous day, the number one; He has not missed the day after he had terrible mistakes. Other children have been criticized, then later they will see it perform.

Tim Hardford argues that people often have little to say about a statistics rule that all things tend to return to moderate (regression to the mean).

For example, the average height of Vietnamese people is 1.6m; Which one is 1.9m tall is the “border” / exception. Regression to the mean means that your child will most likely return to 1.6m. Like my father-in-law 1.8m; The instrument has two children, the height is all “mean”.

“Regression to the mean” is not difficult to understand, but few people know how to apply it in practice.

In business, Vingroup in the years 2009-2014, continuous 5-7 years of continuous revenue increased by 200-300%, the previous year doubled the next year; The stock price went up, did you ask if you should buy Vin’s stock? Vin is a good group without discussion, but at the price of 100-150K (at the time of 2012), it is expected that the market will grow 200-300% every year for 5-7 years. 20-30 years into the top of the world, not only Vietnam. Tree cannot grow to the sky, any company has grown significantly over the past 5-7 years, investing on the assumption that it will continue to grow like that for another 5-7 years is a risky assumption.

I just went out of business, there was a friend who told me that when I was in the market, I was so cool, so I could follow. I told you, wait for a while, maybe you’re going back to “mean”.

(From Meraki)