Think Like Buffett: What Counterintuitive Truths Have You Overlooked?
At a party with 25 people, what is the probability that at least two of them share the same birthday?
This is a classic probability puzzle known as the "Birthday Paradox". Warren Buffett once used this paradox to make a bet.
At a gathering of Benjamin Graham followers, Buffett claimed that in a group of 25 attendees, at least two would share the same birthday. It turned out Buffett was right.
“The simple (but surprising) explanation is that the probability of this happening is around 60%.”
Probability sometimes is unintuitive
In fact, a more accurate estimate of the probability is about 57%. That figure is still surprisingly high—so how is it calculated?
Assume there are 25 people, and each birthday is uniformly distributed across 365 days in a year. Let's first calculate the easier scenario: the probability that all birthdays are different.
The first person can have any birthday: 100%.The second person must have a different birthday from the first: 364/365. The third must be different from the first two: 363/365. And so on, until the 25th person must differ from the first 24: 341/365.
So, the probability that all birthdays are different is:
(364/365) × (363/365) × (362/365) × ... × (341/365)
After calculation, this value is approximately 0.4292.
Therefore, the probability that at least two people share a birthday is: 1 – 0.4292 = 0.5708, or about 57%.
Are there other counterintuitive cases in life or the stock market?
People often misjudge probabilities in daily life, largely because we rely too heavily on intuition. In the stock market, such misjudgments are common. For example:
Misconception: A stock that has already dropped 50% is unlikely to fall another 20%.
Reality: Stock price movements are like coin tosses—past results don’t affect future outcomes. If a company's fundamentals worsen, the probability of the stock falling from 50 yuan to 40 yuan (another 20% drop) could be higher than you think.
Would you like more examples of counterintuitive investing principles or mental models?
What other Buffett anecdotes do you know?
What’s the best lesson Buffet ever teach to you?
Join our topic and post directly: The Buffett Series: What Surprising Truths Have You Overlooked? or leave your comments to win tiger coins~
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这种思维错误在股市中经常出现。许多人认为，已经下跌50%的股票不太可能进一步下跌，但如果基本面恶化，很有可能再次下跌20%。市场对当前状况做出反应，而不是过去的价格变动——就像抛硬币没有记忆一样。
我从巴菲特身上学到的最好的一课是独立思考和耐心的力量。就像棒球中等待合适的投球一样，良好的投资意味着保持冷静并避免情绪化的决定。像这样的悖论让我的思维更加敏锐，提醒我总是质疑看似显而易见的事情。
$伯克希尔(BRK.A)$
@Tiger_SG @Tiger_comments @TigerStars
People often misjudge probabilities in daily life, largely because we rely too heavily on intuition. In the stock market, such misjudgments are common. For example:
Misconception: A stock that has already dropped 50% is unlikely to fall another 20%.
Reality: Stock price movements are like coin tosses—past results don’t affect future outcomes. If a company's fundamentals worsen, the probability of the stock falling from 50 yuan to 40 yuan (another 20% drop) could be higher than you think.
Would you like more examples of counterintuitive investing principles or mental models?
What other Buffett anecdotes do you know?
What’s the best lesson Buffet ever teach to you?
leave your comments to win tiger coins~
This means when the markets are bearish and stock prices plummet , the best opportunities arise for those who are calm enough to see value where others see disaster.
Warren Buffett's strategy is built on the idea that market over reactions create substantial buying opportunities. His success shows that a little fear can create a deep well of opportunity for disciplined long term investors.
Thank you Warren Buffett for this pearl of wisdom which I believe in and try to practise. It takes courage and patience to do so.
@Tiger_SG @Tiger_comments @TigerStars @CaptainTiger @TigerClub
还有个他常讲的故事——“自助餐理论”。他说人们在自助餐里总想吃回本，结果吃了一堆不想吃的。投资也是一样，不是机会多你就该全抓，而是挑真正有价值的去长期持有。这句话曾让我重新审视自己频繁换股的坏习惯。
违反直觉的真相太多了，比如“分散投资不一定安全”“现金流比增长重要”……巴菲特最厉害的地方，不是赚了多少钱，而是始终对抗人性，用冷静和耐心取胜。