This statement holds a pound of truth. In the workplace, how does your boss judge whether you can perform on a new task? How does your boss judge whether you should be given a pay rise or promotion? They usually make these decisions based on your past performance. If you screw up something important in the past, they will probably never trust you with a major project.
However we also know that, this is not an absolute truth. People change, circumstances change and events in our lives will affect how we think and behave. Teams that keep winning will stop winning, teams that keep scoring will stop scoring somewhere.
In our previous post, we proposed that you should only invest if you can find a great opportunity.
TRUTH: Statistics act only as a guide to great opportunities.
Past precedent only tells us how people would usually react in a given situation. As an equity investor, would you consider buying Microsoft stock? Looking at their poor record of successfully launching new products, do you think their partnership with Nokia will work out? Similarly, if a team has a consistent bad scoring record, ask yourself whether there is a great opportunity available.
TRUTH: Change Events are ongoing in the background that past statistics are not tracking
It is in the human psyche to try to change things around when things are not going well. Especially in a football match, there are many events that can change the outcome. A red card, a substitution, a tactical switch or bad playing pitch are all such events. The investor must constantly monitor to check whether the statistics are reliable for the new change events.
How do you handle change events? The biggest dangers are emotions and greed. Statistics are unemotional as numbers cannot lie, but they are not perfect for real-time events. We will explain these in detail on future posts.
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