“Gambler’s fallacy”
Hot Streaks & Ruts
What is the Gambler’s Fallacy?
Assuming the probability of an independent outcome is affected by the outcomes previous events.
Business Application
In pure probability, every new potential outcome is not affected by prior outcomes. In life and business, self-improvement and personal development will always beat ‘waiting out the storm.‘ When stuck in a rut, examine areas that are falling short. When on a hot streak, avoid getting cocky and review the factors that influence your success.
Example 1
“I’m just in a bit of a rut right now. It happens all the time in sales. Things will turn around.“
Why This is a Fallacy
Probability, confidence, and introspection largely define success rates in business. Pointing to probability or external circumstances detracts from personal development and delays progress.
Example 2
“My last 5 business ventures failed. I’m due for a win!”
Why This is a Fallacy
It’s a nice thought to remain optimistic about future success but in order to avoid sustained disappointment, you must reflect upon and learn from failure.
