“The Gambler’s Fallacy” is the erroneous belief that an
event that has no memory is more likely to happen because it has not happened,
or vice versa.
Like thinking the next spin of a Roulette table is likely to be Black
because it has been Red 8 times in a row. It is still (just less than) 50% (because
of the Casino’s edge). Every spin has the same probabilities. The past does not
matter.
In the world of money and merit, we make the opposite mistake. Besides skills
and knowledge, other things matter. Capital and Containers. If you have good
luck, and build capital and barriers to entry, your odds do change. Your
capacity to handle ups and downs. Your opportunity set. 8 Reds in a row, even
through good fortune, inheritance, the lottery of birth, prejudice, or a chance
connection, will completely change the game.
If you capitalise your luck rather
than consuming it. If you release your misfortune, rather than compounding it.
If you consciously choose the events to connect.
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