Ep. 036: The Drunkard’s Walk with Dr. Leonard Mlodinow
I was being interviewed last week for a podcast and one of the questions was, “What are the three biggest mistakes new cryptocurrency investors make?” And my answer was: wrong timing, wrong thing and wrong amount.
Meaning, they buy tops and sell bottoms, they are investing in ICOs and alt-coins that are almost certain to lose them money, and they invest way too much of their investable assets in cryptocurrency.
In trying to explain my answer, I remembered an interview I had done for my radio show, back in late 2009, with Dr. Leonard Mlodinow, the author of The Drunkard’s Walk: How Randomness Rules Our Lives. I dug it out and re-listened to it for one specific example he had used. Then I decided it was so good, I would share it with you as well.
Just to give you some background:
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“Studies showed that people believe, even when they know something is random, they can still control or predict it.”— Leonard Mlodinow
In this week’s conversation, we talk about:
✓ Why rats are better at probability than humans are
✓ How do we know markets are random
✓ How does a drunk walk
✓ How many times do we have to play the World Series to know statistically which team is better
✓ If the market is random, how do fund managers and day-trading course, still exist?
TO DIVE DEEPER INTO SUCCEEDING IN A RANDOM MARKET:
The Drunkard’s Walk - Leonard Mlodinow
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