The Green Forest Delusion

The Green Forest Delusion

Category: Color Trends, Date:12 Oct, 2017 / Share Post:

One of the most common mistakes when placing bets is to mistakenly confuse expertise in sports with expertise in sports betting parimatch app download. This mistake has been demonstrated by a rapidly increasing number of former professional sports stars becoming tipsters or self-proclaimed experts, and has been extensively described as the "green forest fallacy.

One of the most successful traders ever to trade "green woods" (that is, freshly cut trees) actually had no idea what he was trading. He spent his entire career in the greenwood trade believing that it was wood painted green, not recently felled trees.

The notion of the "green forest delusion" was created by Nassim Nicholas Taleb and appeared in his recent book, "Antifragility," in which he described the following similar situation: the inability of a major Swiss franc trader to find Switzerland on a map did not prevent him from making money by trading that country's currency.

So how do people who do not know what they are trading achieve success? And how does that apply to placing bets?

These two (and many others) simply recognize risk - something that other people, even those with the most intimate knowledge of freshly cut trees or central European country, do not grasp.

Obviously, one should ideally be aware of the market and the risk, but it is important to remember that risk awareness is just as significant (if not more so) than knowledge of the sport itself.

This contradicts the pictures on the back pages of any national newspaper showing retired athletes leading betting forecast columns. You can understand if the betting capers would consider the opinion of, say, a former soccer player to be very important when placing soccer predictions, but remember: soccer and soccer betting are two completely different fields.

Risk Awareness and Acceptance

Taleb may have given the "green forest fallacy" its name, but this theory shows up in other cases as well. For example, in Michael Lewis's hugely influential book, Maniball, the central idea is that more than a century of collective Major League Baseball experience was based on imperfect subjective analysis. Using instead a more analytical approach, focusing on a few essential metrics, would be more effective.

The approach described in "Maniball" has been adopted by several managers in the APL, questioning the traditional and highly subjective approach, hard to quantify and often shrouded in confirmation bias.

For any punters reading this article, the following points must be considered in order to successfully place sports bets.

  • Just because someone has in-depth knowledge or a wealth of experience in sports does not mean they are knowledgeable enough to successfully place bets on the sport.
  • Announcers, journalists, and tipsters love narratives and stories that thoroughly explain, for example, that a team has lost form. Even more so, they like to tailor the story to justify themselves when things go in a completely unexpected direction (as they usually do).
  • Ask yourself this question: do you think possessing knowledge of golf means having to dive into golf betting with confidence?

Of course, no one is saying that knowledge of sports is irrelevant to sports betting, and commentary in the mainstream media should be attributed to announcers acting as forecasting experts, but their specialization, like the "green forest" in general, means that they are rarely situated to properly assess risk or make predictions that should be followed when investing their hard-earned money.