In a room of 23 people, there's a >50% chance that 2 people share the same birthday.
This type of probabilistic thinking does *not* come naturally to many people.
Our intuitions often leads us astray. A good reminder: study counterintuitive math and economic results.
Here are 9 of them 🧵
In a room of 23 people, there's a >50% chance that 2 people share the same birthday.
This type of probabilistic thinking does *not* come naturally to many people.
Fractal geometry is also confounding:
The coastline of a landmass does not have a well-defined measurement. As the unit of measurement gets smaller (eg. from KMs to cm), the length increases without limit.
In an auction, the winning bid will usually exceed the intrinsic worth of an item leading to a significant overpay (and negative net profit for the winner).
Removing an extra road can make everyone's commute time faster.
Why? The existence of a "fast" road leads to congestion because everyone uses it. If you remove the shortcut, traffic flows better.
If a seller has slightly more info than a buyer (eg used cars), it can lead to market failure:
◻️Buyer will pay price below market (b/c they can't confirm quality)
◻️High-quality sellers leave market b/c can't get good price
◻️Only low-quality sellers remain
If you take 100lbs of potatoes which are 99% water by weight and you let it dry so that they are 98% water, their new weight is 50lbs.
One 18-inch pizza has more "pizza" than two 12-inch pizzas (still trying to process this fact).
An example of the law of large numbers: A person can expect to experience events with odds of one in a million at the rate of about once per month.
(Similarly: in a world with ~8B people, a one-in-billion event will happen 8x a month)
If bank customers take on average 10 minutes to serve and they arrive randomly at a rate of 5.8 per hour...then the waiting time for
◻️one teller is *5 hours*
◻️two tellers is *3 minutes*
Waiting time is reduced by 93x by adding a second teller.
Also check out my weekly Saturday newsletter:https://t.co/jGZs8brnVR
Here's the breakdown of the queueing theory: https://t.co/2vunn5mMTz
Check this awesome article for dozens more counterintuitive math, science + physics facts: https://t.co/8sejjm6AkH
◻️ *infinite* surface area
◻️ *finite* volume
1/
— 10-K Diver (@10kdiver) January 9, 2021
Get a cup of coffee.
Let's talk about the Birthday Paradox.
This is a simple exercise in probability.
But from it, we can learn so much about life.
About strategic problem solving.
About non-linear thinking -- convexity, concavity, S curves, etc.
So let's dive in!
More from Trung Phan 🇨🇦
The Wall Street Bets due diligence on Wendy’s is gold.
The catalysts are:
◻️ The release of a new summer salad
◻️ The @Wendys Twitter account, which has mastered “meta pragmatic roasting” (which is effective with younger people)
◻️ The fact it literally sells chicken tendies
OP:
Here’s a more fundamentals-driven analysis of Wendy’s
https://t.co/A2k19S9M7J
😂😂😂
Further Wendy’s analysis from @CliffordAsness !!
The catalysts are:
◻️ The release of a new summer salad
◻️ The @Wendys Twitter account, which has mastered “meta pragmatic roasting” (which is effective with younger people)
◻️ The fact it literally sells chicken tendies
OP:
Here’s a more fundamentals-driven analysis of Wendy’s
https://t.co/A2k19S9M7J
😂😂😂
\u201cThe name of the company is Wendy\u2019s International $WEN. It is a cutting edge high tech firm out of rural Ohio that is awaiting imminent patent approval on the next generation of summer salads that have both huge military and civilian applications.\u201d pic.twitter.com/qmk4hkKL3N
— u/1ronyman (@1ronyman1) June 8, 2021
Further Wendy’s analysis from @CliffordAsness !!
More from Finance
As the DeFi bull market continues, some brutally honest tips for new founders fundraising in crypto.
👇
1/ The discount you offer to strategic investors is both to account for the risk of an unlaunched product, but also as compensation for continued value add and support.
So make sure you know the investor will support you and not leave you on read once the docs are signed!
2/ Having someone on your cap table/ token allocation is as important as hiring.
You wouldn't hire someone just because they are influencers on Twitter- you do your reference checks and find evidence of value add from other companies the investor has invested in.
3/ Don't trust, verify.
Many investors will promise you the world when they're trying to get on your cap table.
Talk to founders they backed to see how much of it is bullshit. Ask them about how the investor was there for them during hard times.
4/ Don't just go for "name brand" funds because you want the brand.
Sure, it's great validation, but optimize for fit, not vanity.
However, I do think many well-known VCs are good actors, especially those with roots in successful trad VCs. They have a rep for a reason!
👇
Equity/ownership is a force. Getting it in the hands of the right people generously will drive alignment and execution.
— Joey Santoro (@Joey__Santoro) January 21, 2021
It is a joyful and serious responsibility \U0001f332
1/ The discount you offer to strategic investors is both to account for the risk of an unlaunched product, but also as compensation for continued value add and support.
So make sure you know the investor will support you and not leave you on read once the docs are signed!
2/ Having someone on your cap table/ token allocation is as important as hiring.
You wouldn't hire someone just because they are influencers on Twitter- you do your reference checks and find evidence of value add from other companies the investor has invested in.
3/ Don't trust, verify.
Many investors will promise you the world when they're trying to get on your cap table.
Talk to founders they backed to see how much of it is bullshit. Ask them about how the investor was there for them during hard times.
4/ Don't just go for "name brand" funds because you want the brand.
Sure, it's great validation, but optimize for fit, not vanity.
However, I do think many well-known VCs are good actors, especially those with roots in successful trad VCs. They have a rep for a reason!
