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Survivorship Bias

Survivorship Bias

Inspired by a similar post in ritholtz.com —  Source: XKCD

Survivorship bias — a form of selection bias focusing on what has survived to the present and ignoring what must have been lost.

In this example, millions of lottery buyers never received any winnings. By focusing on one person who did win a lottery, we falsely assume that buying lottery tickets is profitable, ignoring the millions who did not win.

 

 

1 thought on “Survivorship Bias”

  1. I meet many traders who share details about their killer trades …. they tend to forget and or ignore their loser trades which may have been 2 or 3 times in number !

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