In this case, let’s say gambler number 28 blows up. However, this strategy also has the risk that, on average, one gambler out of the 100 loses all their money and goes bust. Let’s say in this example that our gamblers are all very smart (or cheating) and are using a particular strategy which, on average, makes a 50% return each day, $500 in this case. Some will lose, some will win, and we can infer at the end of the day what the “edge” is. Each brings a $1,000 and has a few rounds of gin and tonic on the house (I’m more of a pina colada man myself, but to each their own).

In scenario one, which we will call the ensemble scenario, one hundred different people go to Caesar’s Palace Casino to gamble. What I Learned Losing 56 Million DollarsĬonsider the following thought experiment offered by Black Swan author Nassim Taleb. The key is a big little idea called ergodicity. How do you recognize games like Russian Roulette where the only way to win is to not play? And how can you change the rules to make it work more favorable for you?

In fact, you may be playing one of those games right now and don’t realize it. Though you will (hopefully) never play Russian roulette, there are a surprising number of scenarios in life that have rules very similar to Russian Roulette but which otherwise sane and rational-seeming people (including Nobel prize winners) choose to play. There are only two ways to consistently win Russian Roulette: But there’s no amount of money that would make you play it 6 or more times. You might roll the dice and take $1,000,000 to play Russian Roulette one time (though I wouldn’t advise it). The rules for Russian roulette are simple: you sit in a circle with five other people, put one bullet in a pistol with six chambers, and each person takes a turn pointing the gun at their head and pulling the trigger. But, now that we’re on the topic, how do you consistently win at Russian Roulette? More to the point, what other scenarios like Russian Roulette exist where winning once is feasible but winning consistently is highly improbable?” No? You haven’t had a similar experience? That’s probably good. After all, 5 out every 6 Russian roulette players recommend it as a fun and profitable game. I’ll bring my friends and we can make it a game night.” You’re standing in the dairy aisle at the grocery store and a stranger walks up to you and says “Hey! I have revolver in my car with one bullet in the chamber, wanna play Russian Roulette?”Īnd you’re like “Oh man, that sounds awesome. One of the most frequent questions I get from readers is “How do I win at Russian Roulette?”

Consistently win at roulette