CMA, A Guess By Any Other Name

Many studies have addressed how people make important decisions, one of the classics was conducted way back in the 1970s, by Daniel Kahneman and Amos Tversky.  Even at this time, psychologists knew that people often make decisions that aren't supported by seemingly obvious evidence.  In the study researchers had asked people which of two hospitals was more likely to have a day with at least 60% male babies born, a hospital with 15 births per day, or one with 45 births per day.  Most people said that the chances were the same in each hospital, but in fact there should be more variance in the male-female ratio in the smaller hospital, which means it would have more 60-percent days.

It should be obvious that 3 or 4 comparable properties is not a big enough sample size to make any kind of rational decision about a properties value, yet it is the standard industry practice.