Uncertainty dominates the world of wagering; in fact, without it, there would be none. It is vitally important that our approach to the game involve an acceptance of this uncertainty. Here are two more examples:
- Too much study can be a negative behavior. It’s surprising — you would think the more the information, the better. But studies have shown that better decisions are made with less information, than more. Once a person has reached a critical amount of data (say 2-3 pieces, although this varies), they become overconfident that the additional data (which supports their position) makes their decision more and more certain. But this is not the case — the quality of the decision suffers from this overconfidence. The moral of the story? Settle on a few trusted sources that complement each other and, perhaps, one that has differing opinions. But stop there — additional information won’t add much to the certainty of the prediction, despite the confidence that it will.
- “Hope is a dangerous thing,” according to Red in the Shawshank Redemption. In the case of wagering, he’s right. It’s an emotion that can get you in trouble and blur your eyes to reality. Wagering is not a game for the optimist; it is a game for the realist. You need to have an accurate view of the data and interpret it correctly. Wanting something really bad to happen won’t change the underlying probabilities. As part of this, you need to be careful with your use of imagination. While it’s imperative to see different possibilities, you need to make sure that they are not overflowing with the distortion known as hope.
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.