Uncertainty, Part I

We live in an uncertain world. And, because of that, we can wager on things; if everything was certain, the result would always be known and there would be no betting. But operating under uncertainty is not something that comes naturally to us. We are far more used to observation and logic than to chance; it’s hard to accept that the future is always uncertain — despite how certain we are in our predictions. Here, I’m going to discuss three concepts related to uncertainty:

  • Not “Soon to be realized truth”: Mostly a repeat of the introduction, but worth stressing. A bet is never a “sure thing” — not ever, not never. I’ve — and I’m sure you’ve — seen events and endings that seem impossible. You need to keep this in mind with every wager and make sure that you are getting value for the bet. Make sure to weigh how uncertain the bet is and insist on the price. Bettors who treat the future as written don’t last long.
  • Occam’s Razor: This is a principle that if there are competing explanations for a phenomenon then the simplest one is likely correct. Applied to wagering, we often contort our thinking into knots to find an explanation for something or to predict the future. Occam’s Razor tells us to lean towards the simplest result as a method for dealing with this uncertainty. This can be a check on whether you are working too hard to make a wager work.
  • Accepting Reality & Risk: Related to “Soon to be realized truth” above, dealing with uncertainty requires that you accept the reality of the situation. As part of this, you need to understand that risk is involved in every prediction. Only by taking things as inherently risky and understanding what the situation actually is can you make accurate value wagers. Trying to ignore the reality of risk is a surefire way to losing.

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