The Past is not Predictive of the Future

It is hard not to predict the future from the past. The whole basis of our judgement often comes from our past experiences. Even public resources explain in gambling, say the roulette table, that just because red was rolled 10 times straight doesn’t mean blacks chances has increased - the events are independent. However, majority of people think that a number or colour may appear since it hasn’t appeared yet - this even has a definition named The Gamblers Fallacy.

My curiosity runs deeper to the predictions we make in day to day life.

Are gambling predictions different to the real world predictions?

If we talk about casino games, these have extremely clever win ratios that are stacked against the player - they are calculable. For instance, most people don’t realise that placing a bet on red in roulette has less than a 50% chance of winning (see image below).

Therefore in the case of casino games, it is an artificial world with calculable odds - this does not reflect the real world.

However, when we wander outside of the bricked fortress with no windows, gambling in the real world becomes odds determined by past events and pundits. Similar to real life, I would argue each person is a pundit in their own way and creates odds for predictions in their day to day life. The two suddenly share many similarities.

Can you give an example please?

Alright, my friend Terry arrives 5-10 minutes late to his weekly work meetings. Each time Terry shows up late, his colleagues predictions strengthen that he will always be late. They could even start taking bets and making odds for if Terry will be late. At what point are Terry’s colleagues guaranteed that Terry will be late? Never.

Even if Terry tells his colleagues he will be late every week, there is no guarantee that he won’t show up on-time or early on a random week. In statistics, this would be considered an outlier. However, Terry suddenly shows up early for the next 3 out of 4 weeks straight. This is no longer an outlier.

Unbeknownst to Terry’s colleagues, his personal schedule had temporarily changed allowing his presence at the meetings.

What is the point of this topic?

Whether it be in my field of software, the gambling world or our personal lives, things can always turn in a way we least expect. To constantly pre-empt outcomes will create more shock than understanding the possibility of an alternate outcome.

At times in my life I have caught myself internally making odds for an event occurring. I admit that it is wise to learn something from past events. However, I would argue it is even wiser to understand that you don’t learn everything from past events.

I read an interesting line from Mark Twain that has stuck with me.

“We should be careful to get out of an experience only the wisdom in it, and stop there, lest we be like the cat that sits down on a hot stove-lid. She will not sit down on a hot stove-lid again - but also she will never sit down on a cold one anymore.” - Mark Twain

Due to a bad past experience, Mrs Whiskers may predict that stove-lids are always hot and never learn the truth. Things can change, peoples situations can change, the odds may change and there is often never a guaranteed outcome.

Repeating the same mistakes is silly but believing outcomes are guaranteed without proof works more on faith than it does logic. Personally, I understand that I can only know what I know now, while tomorrows knowledge can only be known tomorrow.