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The Midas Touch – Increasing your sample size

, November 14, 2016, 0 Comments

midas-touch-central-limit-theorem-marketexpress-inAstha, a management trainee, entered her apartment after a long day in the hope of drowning her stress under the shower. She had recently shifted into her current dwelling place courtesy her new job. Facing many pressing issues like packing, managing transition expenses, student loan repayments, the demands of the new job etc. made her feel dizzy. Stress tears rolled down her cheeks, but got lost in the shower. She exclaimed to herself “Life feels so taxing, when would my normal routine would begin!”.

She walked into her cozy living room and nestled into a comfortable bean bag by the window. Eyes closed, she started strolling back her memory lane where just a week ago, she saw herself leaving her hometown for this new job, anxious yet excited. She kept walking on. Soon she saw herself a couple of months ago celebrating with her family the joy of securing the job, proud and happy. That joyful memory gave her the warmth which even the cup of coffee in her hand couldn’t. That warmth was a sense of being centered and confident, just normal!

Little did Astha know that all she had used was “The Midas Touch” aka central limit theorem of probability theory to turn things normal for her!

In probability theory, the central limit theorem (CLT) states that, given certain conditions (large sample size), the arithmetic mean of a sufficiently large number of iterates of independent random variables, each with a well-defined expected value (mean) and finite variance, will be approximately normally distributed, regardless of the underlying distribution.

Understand more about central limit theorem

In short, the central limit theorem creates the potential for applying the normal distribution to many problems when the sample size is sufficiently large.

How often have you faced situations like Astha’s where too many pressing concerns come on to you? Often we hear ourselves complaining / saying / thinking that “wish life hits normalcy” or “life isn’t normal” etc. Well, I am not trying to define what is normal for anyone. It’s quite subjective and certainly personal as to what is normal for each of us. My take on CLT is about the perspective of looking at life as “being normal.”

CLT says that as long as the sample size is large, any data would eventually shape up normally. So when it comes to our life just increase your sample size i.e. the time horizon you are looking at, and there’s a high chance that life would seem normal.

Apply Central Limit Theorem ( CLT )during any of your life situations and turn it normal. Just like Astha did, go back and try and see your life over a period of more days, weeks, months may be to make it seem normal. Nothing less than Midas Touch.

How to do it

Say a person thinks that his life isn’t normal. Then there is a high chance that the person is not thinking on a broader horizon. All he needs to do is look back at a broader time frame (draw a larger sample number of days) and feel the difference in the perception of his current state of affairs.

So lately whenever I see myself thinking that my life isn’t normal for various reasons, I remind myself to think about my life for the last 3 months or 6 months or even a year (increase my sample number of days), and ask myself how it has been? Most of the times, I end up reminiscing, few good and joyful memories from the past, and it certainly gives me a positive perspective towards my life.

So the next time you think your life isn’t normal, remember there’s always a Midas Touch.

 Image Credits: James Johan Jacob