Order 3 The Intertwining World Of Baseball Statistics And Picking Stocks
There are numerous methods by which one can go about choosing the stocks that will be included in their portfolio. One way is a so-called qualitative approach, which eschews the use of numbers to instead focus on the intangible aspects of the stock. The main problem with utilizing this method is that, inevitably, emotions start to creep in to the investor’s decision-making, clouding judgment in the process.
On the other hand, there is the quantitative approach to picking stocks or other financial assets. The idea behind this tactic is to forget about emotions and let numbers and raw data do all the work for you. This is an approach that has come into vogue in more and
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In the meantime, here are some ways in which the stats and terms that come up often in baseball make a lot of sense in the investing world as well.
Averages
Since baseball is played out over a long season, the statistics that are accumulated over that period of time can give viewers somewhat of an assumption about the likelihood of, for example, a batter getting a hit or a pitcher striking that batter out. In much the same way, average stock prices are a good way for investors to get an idea of the baseline of the stock and perhaps predict if any deviations from the norm are the beginning of a trend or an aberration before a return to the norm.
Sample Size
Baseball pundits often throw around the term sample size to explain whether or not results that have been achieved can be predictably repeated. For example, if a batter hits a home run once in four at bats, it doesn’t necessarily mean he’ll hit 25 in 100 at bats, because the sample size is too small to make that leap in logic. In the same way, stock surges one way or the other should be backed up with a good deal of trading volume before they can be