Fooled by Randomness

Solon’s Warning

Due to the undetermined future we cannot judge happiness
Random success can impact social pecking order
Studies have shown that some people would rather earn less money than have others out-earn them
A string of successes releases serotonin and which sets of a positive-feedback cycle. This cycle can reverse and cause a string of failures.
The success of a profession can only be measured by the success of the average person in that profession.
You must consider alternative realities when considering if the outcome of some event was positive.

People do not like to consider abstract ideas only ones that are specific
Traders may do best if they phase out the noise (media, news, reports) and focus only on relevant information
Even evolution has been shown to be fooled by randomness. Sometime poor traits survive versus better ones
Need to measure probability and outcome to find expected value. This is why option sellers can get crushed because the loss outcome multiplied by the probability has a very extremely negative expected value
Rare events happen more often than we think because median and mean are not the same thing
Because the markets are not stationary econometrics does not hold any value.

If you have enough of something random you are likely to find at least one instance of order/what you are looking for
The survivorship bias limits our sample size and makes things appear less random
People can only perceive one outcome. The brain is not able to appropriately weigh probabilities

Everyone is fooled by randomness even, and sometimes especially so, mathematicians and finance “experts”