Or How to Make Money using Mathematics.
So here is the question, and I'll answer this one after I get a few responses. Just think about it and don't cheat.
You open your mailbox and you find that a "stock prediction" company sent you this letter saying that it's their business to predict the stock market and they want you as a customer. They provide you with a free prediction that the stock price of company xxxx will go up in the next week. xxxx is a large company like MSFT or something of the sort.
You toss the mail out, but come next week you note that the xxxx stock price did go up. Next week, surely enough, you get another mail from the same company extending one more free prediction that the xxxx stock price will go up (or down for that matter). A week passes by and they were right again.
You get that for 6 weeks in a row, and every time they are spot on right about the stock price prediction.
For the 7th week you get a mail that they had sent you enough free predictions and you should pay for the next one if you want it.
Would you pay? Obviously they're good at predicting stock prices aren't they?
If not then why?
Just think about if for a few minutes and leave me a comment with your answer.
Please don't cheat by looking it up (or otherwise), or at least if you do, don't paste it here in the comments :)
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Here I will post random thoughts of mine, for no reason whatsoever except that I can
3 comments:
Lots of thinkers reading my blog, obviously.
I can not see anything from not paying to them :) they seem great
Right, I just got to complete reading this posting on your blog, waiting for the darn build to complete.
Well, I won't pay them, its still a fifty fifty chance that their next prediction is right. Even though they had 6 right predictions in a row.
Although 6 predictions in a row is quite tough, 1 in a 100 chance (0.5 power 6) however, applying economy of scale will make a different story.
So if they start with a popoulation X, then only 0.01X will get six right predictions in a row.
If X is 100,000 , then they have 1000 victims. If X is 200,000 then they have 2000, etc.
So a thousand is a big number, and I guess sending 100,000 letters is not that too hard. Specially, if say those 1000 victims are gonna pay 100 each. They end up with 100,000 dollars... Woow...
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