“The markets can stay irrational longer than you can stay solvent” was a warning given by John Maynard Keynes. The reason the “Martingale Strategy” does not work in betting is eventually reality kicks in. The idea (popular in 18th century France) is that in a Head/Tales style win/lose game, you double the bet every time you lose. So, the first win will cover all the previous losses. The false idea being that the gambler with infinite wealth will eventually win. Reality is not infinite, so the gambler will one day experience catastrophe if they continue playing in this way. Truth catching out a strategy with no value. Unable to place another bet. With the house’s edge, the gambler remains a mathematical loser every time they bet. I believe this is the reason those who see investment simply as a game of betting against others are existentially doomed. It is not merely a case of buying things for less than they are worth from the irrational. Waiting for normal to return. What the thing you buy does, matters. What you do, matters. Fundamentally. You need to build enough capital to survive whether the market is rational or not. Then carry on doing things that matter. Win/lose is wealth extraction. Win/win is wealth creation.
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