Law of large numbers

Law of large numbers states that as the sample size grows, the resemblance between population parameters and sample characteristics becomes closer.

In a financial context, the law of large numbers indicates that if the entity is growing rapidly, it is difficult for that entity to sustain that percentage of growth.

Example:

If a fair coin is tossed 10,000 times, about half of the tosses will come up heads, and half will come up tails. The heads-to-tails ratio will be extremely close to 1:1. However, if the same coin is tossed only 10 times, the ratio will not be as close to 1:1, and in fact, might come out to be far different.