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I usually treat anyone who uses the “what about the sample size?” argument when discussing some stat with extreme skepticism. It’s almost invariably just a cheap way to score a point. It’s also a way to make the other person think they’re wiser than they are rather than an honest and principled attempt to test different ideas and discover the truth. I’m pretty sure I’ve done that myself a few times… that’s how I know.
The term ‘sample size‘ is also probably the only thing they know about statistics, and it’s something that even my six-year-old can understand, let alone a first-year student studying anything remotely requiring stats in university. So yes… they would probably not have published the data without a reasonable sample size.
Having said that, there are some situations where the media is even dumber than a six-year-old, and I must concede that the usually moronic ‘what about the sample size‘ argument is legit. My mate recently sent me this photo.
It looks terrible, and in the media’s usual dishonest tradition, they have picked the most lurid angle to report something because that’s what sells. The 150-year-old saying “what bleeds, leads” still holds true today. In many ways, it speaks more to the immutability of human nature than it does about the media. Unfortunately, we’re easy to fool and make the same mistakes from generation to generation.
Have prices fallen 14-20% in these suburbs?
Back to my most hated ‘What about the sample size?’ test.
Remember that sales volumes are extremely low, as is normal at this cycle stage, and we need a bare minimum of 30 observations to get a statistically significant sample. We’ll look at each suburb one by one.
If we consider that sales volumes have been falling, the sales made last month are likely even lower than the 12-month average. So, a couple of lower-priced property sales would easily drag the median down. The property market isn’t crashing.
What else?
Observing the world around you is a good way to assess the real state of the economy. A super-intelligent mate who retired in his early 30s and lives in a waterfront property in Hunters Hill just told me that new uniform sales at his children’s school had fallen 30%, and second-hand sales are up 10x. The economy is hurted, as my kids would say.
We’ve been in the longest per-capita recession in 30 years, and consumer sentiment is worse than it was during the height of the pandemic. It’s easy to get caught up in the media’s hype and emotion, but personally, I’ve never been more bullish.
The only way a bull run* starts is when the last bull becomes a bear; it’s the only way to flush out the last of the frothiness of hope and exuberance…. It’s perfect.
And yes… I borrowed the media headlines to get your attention!
*a bull run is a sustained upswing in asset prices; a bear market is the opposite (for Rhiannon)