(CLT) says that the distribution of the sum (or average) of many independent random variables tends toward a normal distribution, regardless of the shape...
The core idea
(CLT) says that the distribution of the sum (or average) of many independent random variables tends toward a normal distribution, regardless of the shape...
Connected
Mental Model
Mental ModelBayes Theorem
your beliefs proportionally to how surprising the new evidence is — the foundati
Mental Model
Mental ModelBlack Swan Theory
, unpredictable events with extreme impact shape history.
Mental Model
Mental ModelCompounding
growth from consistent small gains over long time horizons.
Mental Model
Mental ModelCorrelation vs Causation
together does not mean one causes the other.
Mental Model
Mental ModelErgodicity
works across many simultaneously may not work for one across time.
Mental Model
Mental ModelExponential Growth
accelerates proportionally to current size, slow then explosive.