Not really stock-related talk, but just wanted to say something quick about probabilities.
In an earlier entry, I've talked about
Anyways, what both of these mathematical fallacies point out is that, in order to understand your true probabilities, you have to have the correct grasp of the problem itself.
For example, if you want to flip a coin three times in a row with heads, then yes, your probability will be 1 in 8. However, if you've already flipped a coin twice and got heads, then your probability of getting a head with your third flip is in fact 1 in 2.
As you can imagine, this sort of thinking is vital when it comes to assessing stock trades, or really, anything in life. Because the fundamental lesson is to make sure we understand the true context of the question before we can ever hope for an answer. Or at the very least, it's fun to talk about.