Expect to Be Wrong

blackjack

Play blackjack in Vegas. The house edge is 0.28% with a standard deviation of 1.15. The dealer loses about 49% of all hands played.

That’s a lot of losses. Evidenced by the fact that casinos still have blackjack tables, it’s okay to lose 49% of the time. It helps that losses are taken quickly. The dealer never doubles down.

I’m wrong a lot of the time too. All humans are. This is acceptable as long as errors are acknowledged quickly.

The timing is more critical than the error. When you drag out a loss, you increase the amount of time spent being wrong. Repeatedly doubling down on a losing hand is a good way to extend a 49% loss record into a 100% loss record.

Microsoft could argue that it would eventually be right about the tablet computer back in 2001, but if Steve Ballmer had kept placing bets on MS Tablet for the next 9 years, I doubt shareholders would have kept him around and called him a visionary.

Microsoft was right about the MS Tablet in 2001. It was only wrong about the decade.
Microsoft was right about the MS Tablet in 2001. It was only wrong about the decade.

When in doubt, better to leave a sinking ship too soon than too late. If the ship rights itself and leaves you behind, wait for the next one to come along.

Or learn to swim. You don’t drown by falling in water, you drown by staying there.

Swimming_Pigs

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s