Green Lumber Fallacy
- Having the knowledge of sports does not mean it is sports betting
- Explaining Green Lumber Fallacy
- Applying and acknowledging risk
There is one prominent mistake that usually aspiring bettors will make is that they were mixed up with their knowledge of sports with sports betting expertise. This mistake gave rise to ex-professional athletes becoming self-proclaimed experts in betting, which were explained in ‘Green Lumber Policy’ by Nicholas Nassim Taleb.
Newly cut woods, often regarded as green lumber, were sold and bought by successful traders and usually these traders do not know what they are trading. These traders usually thought that these woods were not freshly cut but were painted green. However, this ignorance of the traders did not affect their abilities in trading to make money.
In his book “Antifragile’, he further explains this Green Lumber Fallacy. Following this book, the author gave another scenario whereby he highlighted a currency trader that trades Swiss Franc do not even know where Switzerland is located, but this does not affect his money making ability by trading this currency.
How did these people succeed in their trading even though they were ignorant? How would this scenario be applicable to betting?
Application of Green Lumber Fallacy on betting
Although the aforementioned traders have no complete knowledge on the product that they are trading, these traders understood the risk that comes with trading them. They do not possess any knowledge towards the geography of Europe or green lumber.
The knowledge towards risk and the market is definitely the perfect skillset, however if both were made to consider its importance, knowing the risk would outweigh the importance of the market’s knowledge.
Mostly at the national newspaper, the back section of it will publish columns whereby ex-sports celebrities will give their tips and opinion regarding the outcome of a sports event. It is undeniable that bettors will consider these opinions of a retired football player when it comes to betting in football matches. However, it must be noted that betting on football and playing football is very different.
Applying and acknowledging risk
Although Green Lumber Fallacy was named by Taleb, this theory is applicable in many ways. For instance, Moneyball, a very influential book by Michael Lewis, stated that for over a hundred years, MLB insiders based their opinion on unsound subjective analysis. It would be more effective if focus were placed on analytical approaches that concentrate on a handful of important key metrics are sufficient.
This approach of Moneyball was applicable not only in baseball, but also to other sports such as English football whereby the club managers challenged the traditional subjective approach that is hard to be quantifiable, and usually surrounded with confirmation bias.
Any sports bettor that is reading, the tabulated points below is vital for sports betting success:-
Even though an individual has extensive experience of knowledge regarding a sport, it will not mean that they were equipped with betting knowledge on that sport.
One question that should be asked to any bettor – is that, with the knowledge of golf would it mean that you would just place your bet in golf events confidently?
However, it must be highlighted that this is not a suggestion that sports knowledge is not relevant or even worthless for the purpose of sports betting, but the mainstream media’s narrative is referring to talking heads being regarded as experts. However, their specialisation in this domain, similarly with the Green Lumber, would mean that they are not in a position to make prediction or evaluating risk. Therefore, you should not be betting your money based on their opinion.