There are averages but relying too much on the “average” can lead to ruin. And uncertainty is behind it all.
A good example of this was laid out in an old book about making investment decisions on drilling oil wells. It turns out, wildcatting is a risky endeavor.
A wildcatter can gather every bit of information possible but they’ll never be certain if there is oil under the ground until they drill. The key to successfully drilling oil wells is to not bet so much money on any single well that a string of bad bets ruins you. Continue Reading…