'Tips' Puzzle solution

Hello All,

It has been a long time since i updated the blog.That has been so because of a lot of factors but i am not going to dwell into them now. Today i plan to write the solution for the puzzle i had put forward earlier.

So lets get started !! The whole puzzle had been put forward from the perspective of the person who was receiving the mail. Now let us turn our attention to the person who was sending the mails. Lets call this person A and suppose that he somehow procures a huge list of contact details of potential customers with their email ids. Not a very tough task i suppose considering the number of firms selling such lists in today's market. Now Mr A is very clever as we will show soon and has a firm grasp on a simple concept of 'slice and dice'. He smartly divides this huge list of people into three groups X1, X2 and X3 on a random basis.To each of these groups he sends a "tip" in the following order.

X1 -> The price of stock will go up.
X2 -> The price of stock will go down.
X3 -> The price of stock will stay as it is.


Now if u observe carefully then you will see that the three predictions cover the entire universe of solutions of what could happen with the stock prices. One of them has to come true no matter what!!!

So after one month our Mr A sits back on his arm chair and picks up the group for whom the prediction had come true and again sub-divides that group in three. The other two groups are discarded and the same process is repeated with another stock tip. This goes on for a few months. Each time two third of the people to whom the tip was sent were discarded and the remaining one third for whom the tip had come true were sent the next round of mails.Thus in say 6 months time he had a set of people for whom six consecutive predictions had come true. These guys had by now truly started believing in what Mr A was claiming. What a way to manipulate human psychology !!!

Now people for whom all these predictions had come true won't mind coughing up the fees he demands for any future 'tips'. Thus he has his loyal base of customers!!
Now i do feel bad for the fellow who suffered huge losses on count of this, but then its no point getting GOD in middle of this. All that has happened is he has been tricked and fooled completely and he does not even realized that even after the whole episode. Moral of the story be critical with the information that you have. Today we have more noise and less information. Always try to understand the underlying dynamics. Most important, only because there is a strong correlation between two things does not always mean that one is the cause and the other is the effect.

Thus my suggestion be aware the next time you get a mail!!!