The Sunday Slant

Finally getting back to betting properly this week, with trading to follow from Tuesday on-wards next week. It feels great to restart, and looking ahead at the racing schedule it will be full steam ahead now.

Today I want to cover the 'Sunk Cost Fallacy', which I'll explain exactly why this is essential information to help you make better life decisions, and positively impact your betting and trading.

If you've never heard of this before, the sunk cost fallacy was identified by two Israeli psychologists, Daniel Kahneman, and Amos Tversky. This fallacy is actually key to human nature.

Human beings are reluctant to accept losses, in fact extremely reluctant. In most cases people will forgo earnings in order to not have to realize losses. This is a simple fact which I think everyone can relate to at some point.

I see this a lot running a site like this, as people will read the information I post, follow a strategy which may hit a losing spell, as they all inevitably do at some point, you can see this looking at any of my profit and loss graphs.

Anyway, at this stage they will then begin throwing good money after bad on other random bets, not following the strategy and sticking to the plan, desperate to recover the loss in any way possible, or by increasing the staking way above recommended levels, just to avert the feeling of losing.

This feeling of chasing a loss can ruin people, it's truly horrible, and is a reason that gambling when not applied correctly can be so dangerous, in fact all forms of addiction can in some way be destructive if not faced head on.

People are just very reluctant to realize any loss, it's as stated human nature, but habits can be broken, and in this instance it's required to be successful long term. I've broken my habits and made the tough choices, so if I can do this anybody can.

sunk cost fallacy

Let me give you an example of what I'm getting at. How many times have you broken up with some girl/guy, and then you got back together, because you'd forgotten the bad things or crappy times when together. This is what happens all the time, and you can relate this exactly to not wanting to let go of a loss with a bet.

In this example you're moving forward with your life, and then you start thinking about the ex girlfriend/boyfriend, remembering the good times you had, all the great memories, you had a good time and the sex was great yeah, but you forget the bad things.

Which is the problem, human beings will keep forgetting about the bad things, because the bad memories are overwhelmed by the good memories.

Which means we repeatedly pick up the phone and call the ex, and the same feelings are happening to them, they've also forgotten the bad things and fights etc, so our fictional couple in this example get back together.

Things are going great for a while, then inevitably the old problems creep back in to the relationship. All of a sudden they