Using examples from my life, I will talk about probability from the following aspects:
1. What is probability?
2. What are the probabilities in life?
2. What does probability do for you and me?
In the movie Minority Report, Tom Cruise played a crime prevention cop. He uses data analytics to predict bad guys’ behavior before they commit crimes.
But, by 2011, it was a reality. The New York Times ran a story in 2011 headlined “Police before Crime Occurs.”
A computer program in the Santa Cruz Police Department predicts a possible car theft in a downtown parking lot and automatically dispatches officers to the scene.
Officers arrested two suspicious-looking women, one a regular at the station and the other with drugs on her.
Predictive enforcement here is part of predictive analytics. There is always an element of uncertainty about crime, just as no one can say for sure who will crash a car or who will default on a mortgage.
So how do police predict crime? How did the bank predict if you would be able to pay back the loan?
The predictive tool they use is probability. What is probability?
1. What is probability?
We often hear the saying in life: choice is more important than effort.
You’ve heard this phrase a million times, but have you ever wondered: What does it really mean?
We have a fixed amount of time and energy each day. Note that “fixed” means your resources and time are limited. Given this premise, which direction can best be invested is a question we have to think about every day.
For example, if you have just graduated and have received offers from three companies, a position in a traditional enterprise, a position in a start-up company and a position in a listed Internet company, which one would you choose?
Because your time and energy are limited, so you can’t work in these three companies at the same time to make money, otherwise you will become a Monkey King.
You can only make the best choice with limited resources and time, and that choice means which company you work for has the best chance of increasing your earning power over the next three years.
For example, if I tell you that Tencent stock has a high probability of going up tomorrow, I also tell you that Alibaba stock has a high probability of going up tomorrow.
So it’s not enough to just know what’s possible, so the mathematician comes out and shouts: If you somehow calculate what’s possible, and put a number on it, you’re done.
Again, if I tell you that Tencent has a 70% chance of going up and Alibaba has a 90% chance of going up, compare the two numbers and you immediately know what to choose.
This is a numerical measure of probability as described in the picture below.
Probability is a numerical representation of the likelihood of something happening. When you know the probability, it means you can predict the future, because you can use the probability to determine which situation is most likely to happen.
For example, if you’re playing a coin toss, what are the chances of it coming up heads?
Since there are only two sides to a coin, that is, there are two outcomes when you land, either heads or tails, so the probability of flipping the coin heads is expressed numerically, 50%,
You see, probability is in our daily lives. Whenever you’re faced with a choice, probability expresses what’s most likely in numerical terms, and then helps you make the best choice.
2. What are the probabilities in life?
This is my favorite “line of probability”. It gives you a sense of probability as a whole in order to make the right choices at critical moments in your life.
If something is not going to happen, then the probability is 0, which corresponds to the leftmost position on the line.
If something is certain to happen, then the probability of it is 1, which corresponds to the right-most position on the line, which is the thumbs up.
Most of the time, you are faced with something between zero and one.
The value of probability is always between 0 and 1.
If something is not going to happen, then the probability is 0, which corresponds to the leftmost position on the line.
If something is certain to happen, then the probability of it is 1, which corresponds to the right-most position on the line, which is the thumbs up.
Most of the time, you are faced with something between zero and one.
In the middle is a coin toss, with a 50/50 chance of either coming up heads or tails,
There’s a 4/5 chance that you pick 4 blue marbles from 4 blue marbles and 1 red marbles, all of which are blue.
Here’s a simple, but very important, quote that I will repeat in my future investment and data analysis. Repeat it three times with me:
If you’re doing something with less than a 50-50 chance, don’t do it, because you’re less likely to succeed than flipping a coin.
You see, the probability is just some number point on this line. Sometimes it’s further to the left, which means it’s not likely to happen. Sometimes it’s closer to the right, which means it’s more than 50 percent likely to happen.
Easy, right? A lot of teachers talk about probability in a complicated way. In fact, probability is derived from our life, used to solve problems in our life.
3. What does probability do for you and me?
Now that you know what probability is, let’s think about a question:
How does probability help improve our quality of life?
As adults, we know that the world is uncertain, so we don’t expect ourselves to succeed in everything, but we try to make everything more likely to succeed, that is, make everything more likely to succeed.
Probability is the study of uncertain events and outcomes.
There’s uncertainty in investing in the stock market, and there’s uncertainty in flipping a coin, because sometimes you get heads and sometimes you get tails.
4 consecutive tossed a coin but also increased the uncertainty, because each time can be positive or negative, if you have a coin in his hand and continuous cast the four times, I had no way of knowing accurate results of 4 times (you can’t), but according to the probability calculation formula, we can calculate the: two positive probability than appears four positive.
With access to and trust in such information, decision makers are often able to discern risks and make decisions.
For example, the Australian Transport Safety Bureau has published a report on the risk of death from different forms of transport. Everyone thinks flying is scary, but the risks of commercial air travel are minimal.
Australia has not had a fatal commercial aviation accident since the 1960s, so the death rate per 100 million kilometers of air travel is essentially zero. The death rate for cars is 0.5 per 100 million kilometers. The really scary thing is the death rate for motorcycles, which are fully 35 times more deadly than cars.
So why are planes the least safe in most people’s intuition?
That’s because if a plane crashes, it gets a lot of attention, and you probably think it’s dangerous. But the truth is. In terms of deaths per kilometer, flying is 22 times safer than traveling by car.
But sadly, most people lack common sense of probability, as evidenced by the example in the picture below.
To know, in the statistical probability, motorcycle death rate is the highest, if you know some statistical common sense, how can not choose this industry. It’s like making money with your life. It’s not worth it.
The second picture is of 9/11 in the United States.
Thousands of Americans may have died from fear of flying in the wake of the Sept. 11 terrorist attacks, according to a fascinating paper by three Cornell University researchers. We will never know the true risk of a terrorist attack, but we do know that driving is dangerous.
In the wake of the Sept. 11 terrorist attacks, more And more Americans are driving instead of flying.
According to statistics, from October to December 2001, 344 more people died in traffic accidents per month than before, taking into account the average death rate and weather factors. The effect waned over time as fears of terrorism receded.
But the study’s authors believe that the number of people killed in the Sept. 11 terrorist attacks may have passed 2,000.
You see, choosing a mode of transportation without knowing the odds leads to increased mortality.
Now let’s go back and see what learning probability actually does for us.
While probability doesn’t tell us exactly what will happen, it tells us what is likely to happen and what is unlikely to happen.
Smart people use this kind of data to guide their careers and their lives. Being awesome is constantly betting on the high odds while consciously taking precautions against those risks that can ruin your life.
I think everyone should learn something about probability, which is now a prerequisite for citizenship. When people who don’t understand probability make a fuss, you who understand probability can be calm and collected.
In fact, most people have learned about probability in high school math class, but knowing how to calculate probability is not the same as really understanding probability.
In fact, there are several key ideas about probability that most math teachers fail to understand, or even fail to understand themselves. Understanding these thoughts doesn’t require you to do any math, but they can radically change the way we see the world.
The logic of these thoughts is simple, and we can get four pieces of wisdom for life from the simplest probability.
The four pieces of life wisdom are: the gambler’s Fallacy, the law of large numbers, how to make the most money from investing, and how to prevent risk. I’ll have time to talk more about that later.
4, summarize
So, if you understand these three things, you understand the nature of probability.
1) What is probability?
The essence of probability is to express the probability of something happening in numerical terms.
I’ve given you probability lines to give you a sense of the probability of various events happening.
2) What does probability do for me?
While probability doesn’t tell us exactly what will happen, it tells us what is likely to happen and what is unlikely to happen.
Smart people use this kind of data to guide their careers, lives, and investments. Being awesome is constantly betting on the high odds while consciously taking precautions against those risks that can ruin your life.
