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You win a lot... on average

“never cross a river if it is on average four feet deep.

…Sequence matters.” (Taleb, 224)

Russian Roulette is a Good Investment Strategy

Nine in ten chance you make a million dollars. One in ten chance you get shot in the knee. Average expected return is 900,000 dollars. Why not? You would have to be completely irrational to not take that bet… says the academic.

Most people living in real life would never take that bet. The small risk of ruin isn’t worth it.

But the average return is so high! If you play long enough, you’re sure to get the average return… except once you play ten times you have a 100% chance of not having a knee anymore.

Be careful of anything sold as good “on average”. Nobody’s ever had 2.2 kids.

Question of the Day

Would you play Russian Roulette if you win a million dollars on average?

Your Biggest Fan,

Noah BigNerd Sochaczevski