The Gambler's Fallacy Will Cost You Everything

Why confusing correlation with causation makes you lose every time

A couple in Michigan had 14 sons.

Fourteen. In a row.

No daughters. Just boys. One after another for nearly three decades.

​Jay and Kateri Schwandt became a media sensation. People couldn't believe it. The odds of having 14 boys in a row? 0.02 percent.

So when Kateri got pregnant with their 15th child, what did everyone assume?

Another boy, right? Because that's what they have. That's their pattern. That's what the universe seems to be telling them.

Wrong.

They had a daughter.

Maggie Jayne. Their first and only girl after 14 boys.

The universe didn't owe them another boy. The pattern didn't mean anything. Each pregnancy was an independent event with roughly 50/50 odds.

But people don't think that way.

They see a streak and assume it means something. They confuse correlation with causation. They fall into the gambler's fallacy.

And it costs them.

Not just in betting. In life. In training. In business. In relationships.

You make decisions based on patterns that don't exist. You bet on outcomes that were never guaranteed. You expect results that have nothing to do with what you're actually doing.

And then you wonder why nothing works.

What the Gambler's Fallacy Actually Is

Here's the trap.

You flip a coin. It lands on heads five times in a row.

What's the next flip going to be?

Most people say tails. Because "it's due." Because "it has to even out eventually."

But that's not how probability works.

The coin doesn't remember what happened before. Each flip is independent. The odds are still 50/50.

​The gambler's fallacy is believing that past results influence future outcomes when they don't.

And it's everywhere.

The construction crew that's had three smooth projects in a row, so they assume the next one will be smooth too.

The martial artist who's been tapping everyone lately, so they walk into the next roll overconfident.

The entrepreneur who had two successful launches, so they assume the third will be the same without doing the work.

The investor who's been winning, so they double down thinking the streak will continue.

None of these things are connected. But your brain wants them to be.

Because patterns feel safe. Predictability feels like control.

But when you mistake randomness for a pattern, you make bad bets.

Correlation vs. Causation (The Mistake That Ruins Everything)

Here's the other piece most people get wrong.

Just because two things happen together doesn't mean one causes the other.

I love the videos from Dr. Hannah Fry, a mathematician who teaches at Cambridge. She breaks down fluid dynamics and probability in ways that actually make sense.

​In one of her shorts, she talks about the gambler's fallacy (and the Schwandt family) and why you can't confuse causation with correlation.

She gives a perfect example: Monte Carlo in 1913 and the roulette table.

26 times it came up black!​
​
Here's another one that comes up occasionally: ice cream sales and drowning deaths.​

Both go up in the summer. If you plotted them on a graph, they'd track almost perfectly.

Does that mean ice cream causes drowning?

No. They're both correlated with a third factor: warm weather.

People eat more ice cream when it's hot. People also swim more when it's hot. More swimming means more drowning incidents.

The ice cream didn't cause anything. It just happened at the same time.

This seems obvious when it's ice cream and drowning.

But people make this mistake constantly in ways that aren't obvious.

No. The training might have helped. But the promotion was also influenced by timing, instructor conversations, opportunity, and a dozen other factors you didn't control.

No. The weight loss was caused by the calorie deficit. The moment you stop the deficit, the weight loss stops.

Maybe. But maybe you've picked the low-hanging fruit. Maybe you need to change your training. Maybe you need to drill specific weaknesses instead of just rolling.

You confuse the thing that happened with the thing that caused the result.

And then you keep doing the thing, expecting the same result, and it doesn't come.

Why This Matters on the Mat (And Everywhere Else)

I see this play out in martial arts all the time.

The white belt who gets submitted by the same choke three times in one night.

They assume it's a fluke. "I just had a bad night."

Wrong. It's not random. It's a gap in your defense. And if you don't fix it, it'll keep happening.

The blue belt who's been tapping brown belts lately.

They assume they're getting way better. They walk into the next roll cocky.

Then they get smashed. And they're confused.

What they don't realize: those rolls where they "won" were likely the brown belts going light. Playing defense. Letting them work.

It wasn't causation. It was correlation. The brown belts were choosing to give them space.

The moment the brown belt decides to turn it on, the blue belt gets a reality check.

The purple belt who's been on a winning streak in competition.

They assume they've figured it out. They're on a hot streak.

Then they lose. Badly. And they spiral.

Because they didn't understand that winning was a combination of their skill, their preparation, and also luck. The bracket. The matchups. The refs. A dozen variables they didn't control.

They mistook correlation for causation. They thought the wins were proof of inevitable success.

But nothing is inevitable.

The Construction Site Version

I saw this constantly on job sites.

The crew that finishes a project under budget and ahead of schedule.

The project manager assumes they're just that good. So they bid the next job aggressively. Cut corners on planning. Assume it'll go just as smooth.

Then the next job is a disaster.

Why?

Because the first job went well due to factors they didn't control. The plans were clean. The other trades showed up on time. The inspections went smooth. No change orders.

The second job? Plans were a mess. Other trades were late. Inspections got delayed. Change orders piled up.

Same crew. Different variables.

They confused the smooth project with their own competence. They bet on a pattern that didn't exist.

And it cost them.

How to Avoid the Gambler's Fallacy

Here's how to stop making this mistake.

Step 1: Separate what you control from what you don't

Every outcome is influenced by two categories of factors:

• Things you control: your effort, your preparation, your decisions, your actions.
• Things you don't control: timing, luck, other people's choices, external circumstances.

When something goes well, ask: What did I control? What was luck?

When something goes poorly, ask the same thing.

Don't take credit for luck. Don't blame yourself for things outside your control.

But also don't ignore what you actually did or didn't do.

This clarity prevents you from making false assumptions about what caused the result.

Step 2: Test your assumptions with experiments, not streaks

A streak doesn't prove anything.

Winning five rolls in a row doesn't mean your jiu-jitsu suddenly got five times better.

Losing five rolls in a row doesn't mean you suddenly forgot everything.

Results fluctuate. That's normal.

What matters is the trend over time. And the only way to identify a real trend is through deliberate testing.

If you think a technique is working, test it against different opponents. Different body types. Different skill levels.

If it works across contexts, it's probably legit.

If it only works against one person or in one situation, it's correlation, not causation.

Step 3: Focus on process, not outcomes

This is the hardest one for most people.

Because outcomes are visible. Wins. Promotions. Results.

But outcomes are influenced by too many variables.

Process is what you control.

Did you show up? Did you drill the technique? Did you ask questions? Did you pressure-test your game?

If yes, you're on the right path. Even if the outcome didn't come yet.

If no, you're gambling. You're hoping for results without doing the work that produces them.

The Schwandt family didn't do anything to "cause" 14 boys. They didn't change their process after boy number seven and suddenly start influencing the odds.

Each child was independent. Each pregnancy was 50/50.

The streak was random.

Your job is to focus on what's not random. The inputs. The actions. The process.

Step 4: Don't bet on streaks

This is the ultimate lesson.

When things are going well, don't assume they'll keep going well just because.

When things are going poorly, don't assume they'll keep going poorly just because.

Each moment is a new event. Each roll is a new roll. Each project is a new project. Each day is a new day.

Past performance doesn't guarantee future results.

That's not pessimism. That's reality.

So don't bet your future on a streak. Don't assume the universe owes you anything.

Show up. Do the work. Control what you can control. Let go of the rest.

The Real-Life Example That Proves the Point

The Schwandt family is the perfect illustration.

Fourteen boys. One after another. For nearly three decades.

People assumed boy number 15 was a lock. How could it not be? The odds. The pattern. The streak.

But probability doesn't work that way.

Each pregnancy was still roughly 50/50. The previous 14 didn't change the odds of the 15th.

And they had a girl.

Not because the universe "balanced it out." Not because it was "due."

Because that's how independent probability works.

The same applies to your life.

You don't get a promotion just because you're "due."

You don't win the roll just because you've been losing lately.

You don't succeed just because you've been failing and "it has to turn around eventually."

Each moment is independent. Each outcome is influenced by dozens of variables.

Your job is to control your inputs. Your effort. Your preparation. Your execution.

The rest is out of your hands.

Faulty Thinking and How to Fix It

I already know what you're thinking.

"But what about momentum? Don't winning streaks build confidence?"

Yes. Confidence matters.

But confidence without competence is delusion.

Winning builds confidence, but if you don't understand why you won, the confidence is fragile.

The moment you lose, it shatters.

Real confidence comes from knowing you did the work. From trusting your process. From understanding what you control.

Not from assuming the streak will continue.

"What about patterns? Don't patterns matter?"

I love looking for patterns, it's why I use mental models and frameworks like the 80/20 Rule, 1% Compounding Effect, Flow Channel, et al.

But...

Patterns matter when they're causal.

If you notice you always get swept when you don't control the distance, that's a pattern. Fix it.

If you notice you always get injured when you don't warm up, that's a pattern. Change it.

But if you think "I always roll well on Tuesdays," that's probably correlation, not causation.

Test it. Is it actually Tuesdays? Or is it that you're more rested on Tuesdays? Or that certain training partners show up on Tuesdays?

Don't assume the pattern is what you think it is.

"What if I'm on a losing streak? Should I just accept it?"

No.

But don't assume it's random either.

Ask:

Fix that.

Then reassess.

If you're doing everything right and still losing, maybe you're in a tough bracket. Maybe you're facing better opponents. Maybe it's just variance.

But don't sit in a losing streak without examining your process.

Your Move

Here's what I want you to do in the next 48 hours.

Identify one area where you've been confusing correlation with causation.

Maybe you've been winning lately and you assume it's because of one thing, when it's actually a combination of factors.

Maybe you've been losing lately and you assume it's all your fault, when external factors are at play.

Maybe you've been waiting for something to "turn around" because you're "due," instead of changing your process.

Write it down. Be honest.

Then ask:

Focus on that. Let go of the rest.

Don't bet on streaks. Don't confuse patterns with causes. Don't assume the universe owes you anything.

Control your inputs. Trust your process. Accept the variance.

That's how you win in the long run.

What's one area where you've been confusing correlation with causation, and what are you going to do differently starting today?

Hit reply. One sentence. I want to know what you're letting go of.

⚔ The Dojo Drill

Today’s training:

The Reset Drill

If today has gone badly:

Stop.
Take three breaths.
Start again.

📚 Leader’s Library

Book I recommend this week:

​Turn the Ship Around! — David Marquet​

Why?

Because you're not a leader if you're not training your followers to be leaders.

P.S. Know a martial arts gym owner who’s stressed about money or student numbers?

Do them a favor:

Send them to The Leader’s dōjō 武士道場 – my free Skool community where I help dojo owners get more students and keep them longer with simple, boring systems instead of sleazy hype.

One forward from you could be the difference between them burning out… or building a dojo that actually supports their life:
​The Leader’s dōjō 武士道場​

Thanks,
– Chuck