Green Lumber Fallacy. Tips for Gamblers to Understand this Effect

One of the most widespread betting mistakes is to falsely confuse general sports knowledge with that from the betting industry. This mistake is represented by constantly increasing amount of former professional sportsmen who become tipsters or self-proclaimed experts. The given phenomenon is known and solidly described as the Green Lumber Fallacy.

One of the most successful traders dealing with green lumber trade did not actually have any idea what he sold. During his entire trading career, he believed that he was selling wood painted green, rather than freshly cut trees. However, his ignorance did not influence his ability to earn money.

The term “Green Lumber Fallacy” was created by Nassim Nicholas Taleb and was firstly used in his book “Antifragile”. In the book, the researcher described a situation when a Swiss francs broker`s inability to find Switzerland on the map did not prevent him from earning money at trading this currency. Thus, Taleb proved the fact that it was possible to gain success even if traders did not have exhaustive knowledge about a subject of their trade. Moreover, this effect can be found in the betting industry.

The above mentioned men and others just recognize possible risk, which is not realized by other people who have deep knowledge about newly cut trees or the country from Central Europe. Of course, it is better to know both risks and market, but you should remember that risk recognition is even more important than knowledge about a kind of sport you bet on.

At the same time, this contradicts numerous national newspapers that inform general public about retired sportsmen who are currently earning money at publishing sports predictions. Yes, a former footballer`s opinion can be useful when you are placing a wager on this sport, but it should not be crucial. You should always remember that football and betting on football are two different spheres.

Maybe, Taleb gave his own name to the Green Lumber Fallacy, but the given theory can be found in many other cases. Similar to this situation, Michael Lewis stated that collective experience of Major League Baseball participants was based on imperfect subjective analysis. Alternative use of more analytical approach based on a few important indicators would be more effective.

All the bettors should consider the following pieces of advice if they want to successfully place wagers on sports events.

1. The fact that someone has deep knowledge or rich experience in sports does not mean that he or she is well-versed in order to place successful bets on this kind of sport.
2. Speakers, journalists, and tipsters like narrations and stories explaining the fact that a team, for instance, has gotten out of shape. With this, they like them even more to adjust to their own needs in order to justify themselves when they face an unexpected scenario.
3. Ask yourself a question. Do I think that deep knowledge of golf results in necessity to surely start placing wagers on the given kind of sport?

Of course, nobody states that sports knowledge does not have any significance for successful betting or that reports published in the mass media are intentionally produced by speakers who do not have specialized knowledge about the given sport in order to justify their previous mistakes. No, the core message of the given article is to analyze the information obtained and make any decisions only according to own common sense.