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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This kind of thinking error appears often in the stock market. Many believe a stock that has dropped 50% is unlikely to fall further, but if fundamentals worsen, another 20% drop is very possible. Markets respond to present conditions, not past price movements—just like a coin toss has no memory.
One of the best lessons I’ve learned from Buffett is the power of independent thinking and patience. Like waiting for the right pitch in baseball, good investing means staying calm and avoiding emotional decisions. Paradoxes like this sharpen my thinking and remind me to always question what seems obvious.
$Berkshire Hathaway(BRK.A)$
@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
還有個他常講的故事——“自助餐理論”。他說人們在自助餐裏總想吃回本，結果吃了一堆不想吃的。投資也是一樣，不是機會多你就該全抓，而是挑真正有價值的去長期持有。這句話曾讓我重新審視自己頻繁換股的壞習慣。
違反直覺的真相太多了，比如“分散投資不一定安全”“現金流比增長重要”……巴菲特最厲害的地方，不是賺了多少錢，而是始終對抗人性，用冷靜和耐心取勝。