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Cherry picking

 
Investment Dictionary: Cherry Picking

1. The act of investors choosing investments that have performed well within another portfolio in anticipation that the trend will continue.

2. Relating to bankruptcy proceedings whereby the courts uphold contracts favorable to bankrupt companies, but annul those that are unfavorable.

Investopedia Says:
1. Used by both fund managers and individual investors, cherry picking is a method that reduces the amount of time required for researching stocks as the pool of securities in which investors pick from is significantly narrowed. For example, rather than having to research all the stocks that deal with semi-conductors within the exchanges, an investor may instead look at a few mutual funds investing exclusively in these products and research only those investments picked out to be the best performers.

2. Legislation has been changing in order to stop this practice from continuing.

Related Links:
NASD Rule 2211 can make or break your career as a registered principal. On The Record: Communications With The Public
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Find out how you could be subject to larger losses than you think. How Risky Is Your Portfolio?
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Insurance Dictionary: Cherry Pick
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Practice of selling those securities whose price has increased and retaining those securities whose price has declined. The securities that have declined are listed at their amortized value on the balance sheet resulting in a more positive profit picture for the insurance company than is warranted.

Wikipedia: Cherry picking
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Cherry picking is the act of pointing at individual cases or data that seem to confirm a particular position, while ignoring a significant portion of related cases or data that may contradict that position.

The term is based on the perceived process of harvesting fruit, such as cherries. The picker would be expected to only select the ripest and healthiest fruits. An observer who only sees the selected fruit may thus wrongly conclude that most, or even all, of the fruit is in such good condition.

Cherry picking can be found in many logical fallacies. For example, the "fallacy of anecdotal evidence" tends to overlook large amounts of data in favor of that known personally, while a false dichotomy picks only two options when more are available.

Contents

Term in specific fields

Business

Cherry picking is also used to refer to business policies of picking out profitable customers from a large base.[citation needed] An example of this use is that by insuring only healthy people and refusing to insure those who were unhealthy or are likely to become unhealthy, a health insurance company can cherry pick the most profitable customers.

If an auto insurance company insured only good drivers by cherry picking them from among all drivers this would enable a company to gain an advantage over a company that insures all drivers. To prevent auto insurance companies from cherry picking only the good drivers and leaving poorer drivers without any insurance, most states in the U.S.A. require auto insurance companies to insure a certain number of drivers with poor records.[citation needed]

Statistics

Cherry picking can refer to the selection of data or data sets so a study or survey will give desired, predictable results which may be misleading or even completely contrary to actuality.[citation needed]

Software configuration management

In the jargon of software configuration management, cherry picking is used to describe the action of selecting which patches (or changesets, or commits) should be ported from one branch to another.[1][2][3]

Sports

Cherry picking in sports is the tactic of waiting close to the opponent's goal in hope of receiving the object in play (ball, puck etc) and redirecting it towards the goal. The tactic can degrade the quality of game play, so to prevent or discourage the practice, several team sports have an off-side rule. Ice hockey, for example, requires that a player not enter the offensive zone before the puck. (See Loafing.)

Australian taxation

In the 1970s and early 1980s in Australia, cherry picking was a tax avoidance scheme based on tax deductions for company contributions to a superannuation fund. Such a fund was notionally for the benefit of employees, but the benefits (the "cherries") were picked by the company or its owners.

Acceptability

When a person is assigned to advocate a particular position, then cherry picking might be seen as entirely appropriate. For example, defense lawyers are free to present any evidence supporting the innocence of their client. By contrast, while prosecutors are expected to present the strongest case consistent with the facts, they are not permitted to suppress evidence that might support the innocence of the defendant.

Additionally, in common law, guilt has to be proven beyond reasonable doubt and thus the introduction 'cherry picked' evidence by the defence is regarded as entirely appropriate, because, while such data may not prove something in general, it may be successful in introducing the needed minimum level of doubt to successfully defend the case.

However, when a person with a supposedly neutral position cherry picks, for example journalists, scientists, and judges, that is generally regarded as inappropriate.

References

  1. ^ Meier, J. D.; Jason Taylor; Alex Mackman; Prashant Bansode; Kevin Jones (November 21, 2007). Team Development with Microsoft Visual Studio Team Foundation Server: Patterns and Practices. Microsoft Press. p. 216. ISBN 978-0-7356-2571-6. 
  2. ^ Wingerd, Laura (November 18, 2005). Practical Perforce. O'Reilly Media, Inc.. p. 317. ISBN 978-0-596-10185-5. 
  3. ^ Loeliger, Jon (May 15, 2009). "Using git cherry-pick". Version Control with Git. O'Reilly Media, Inc.. ISBN 978-0-596-52012-0. 

See also


 
 

 

Copyrights:

Investment Dictionary. Copyright ©2000, Investopedia.com - Owned and Operated by Investopedia Inc. All rights reserved.  Read more
Insurance Dictionary. Dictionary of Insurance Terms. Copyright © 2000 by Barron's Educational Series, Inc. All rights reserved.  Read more
Wikipedia. This article is licensed under the Creative Commons Attribution/Share-Alike License. It uses material from the Wikipedia article "Cherry picking" Read more

 

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