How To Perfectly Predict Improbable Events

All you need to perfectly predict improbable events is the power of mathematics. If you find this hard to believe, it is probably because most of us find ourselves at the end of such events rather than at the source.

In this essay, I will be explaining this phenomenon using an illustrated example featuring two different observers’ points of view. Then, I will be generalizing the concept to everyday events and explaining how it is possible to perfectly predict any improbable event. Let us begin.

This essay is supported by Generatebg

The Mysterious Email Newsletter — What You See is a Pixel

Imagine that you are into buying, holding, and selling cryptocurrencies to turn profits. One fine day, you receive a newsletter email from a self-proclaimed crypto-analytics agency. The newsletter says that a certain cryptocurrency will go up by at least a ‘so-and-so’ amount of value by the ‘so-and-so’ date in the very near future.

At this point, you have seen and heard of enough crypto-scams that you know that it is wise to be sceptical. However, you keep an eye on the particular cryptocurrency that the newsletter email spoke of. Lo and behold, on the said date, the price does indeed go up by the said value. This catches your attention. But hey, what are the chances?

At this point, you receive a second email Newsletter from the same crypto-analytics agency. This time, the agency predicts that another crypto asset will go down by at least a ‘so-and-so’ amount by the ‘so-and-so’ date. This gets you intrigued. You keep track as before. On the said date, you are surprised to note that the prediction does indeed come true again! But hey, what are the chances, right?

Using Mathematics to Perfectly Predict Improbable Events — Pixel Style

This cycle repeats itself three more times. And each time, the prediction comes true. By this time, you are taking the newsletters seriously. You assume that the probability of getting each prediction right to be pure chance (50%) and consequently, compute that the probability of getting 5 predictions right in a row to be around 3%. That is a very low chance.

You are still not 100% convinced. But hey, you are seeing good results against significant odds here. Plus, the newsletter appears to be a free service. The next time you receive the newsletter, you decide to make a bet on the prediction. Fast forward to the near future, you make a handsome profit on your speculation. What started off as a scam-like email newsletter chain is now making you money.

This new cycle repeats itself four more times. You have now netted a cumulative profit in the mid five-figure mark and cannot believe your luck!

The Perfect Deal — Pixel Style

As you eagerly await the next newsletter, you receive a different email. It reads as follows:

“Dear *Recipient*,

We have been offering our newsletter prediction services to you for free until now. Our track record speaks for itself. We hope that you have been enjoying and benefitting from our services.

Predicting complex market phenomena is what we excel at. Unfortunately, it is a resource intensive venture; quantum computing algorithms, hardware, software, and a highly skilled mathematical team don’t come for cheap.

If you wish to continue receiving predictions based on our algorithms, please sign up for our premium service priced reasonably at $5000 per year. Please note that we have a limited number of slots because of algorithmic reasons. If we don’t hear from you by ‘so-and-so’ date, we would offer your slot to another prospective customer.

If you choose not to opt for our premium service, you will still receive a weekly newsletter from us which details the other cool stuff we are working on. So, we can still be in touch.”

Have a nice day,
Your CEO.

This offer is a no-brainer for you. You have already made a cumulative five-figure profit from the past predictions. $5000 is just a tiny proportion of that gain. Getting 10 predictions consecutively right is no easy feat either; the probability that it is purely down to chance is less than 1%

Regardless of how the predictions will play out in the future, it makes no sense for you to not sign up for the limited-slot premium service offered to you. So, sign up, you do.

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The Mysterious Email Newsletter — What I See is a Canvas

We now dial back to the day that you received the very first newsletter email. This time, we look at the same series of events not from your point of view, but from my point of view.

Who am I? — The CEO of the said crypto-analytics agency. I am seated in my office in a corporate tower overseeing operations performed by my elite team of mathematicians and computer scientists. The average IQ (Intelligence Quotient) of my entire unit is around 160. At least, that is what my mom thinks I do.

On the contrary, the reality could not be farther from my mom’s imagination. I don’t sit in an office in a corporate tower; I sit in my basement. I don’t oversee a team of mathematicians and computer scientists; I work alone.

The only people that I recently interacted with are a bunch of strange anonymous online accounts from the dark web. You see, I bought an email list from them, which had a total of 20480 email IDs — your email ID included. Don’t blame me; blame DarkDon44213* for it.

Using Mathematics to Perfectly Predict Improbable Events — Canvas Style

On the fateful day of the very first newsletter email, I choose a random cryptocurrency and draft an email newsletter that predicts that its value will go up by ‘so-and-so’ amount by ‘so-and-so’ date. Then, I draft another email newsletter that predicts the exact opposite.

Following this, one half of my email list (10240 Ids) gets the first email (you are one of them) and the other half (10240 Ids) gets the second email. Regardless of which way the ball rolls, my prediction is going to be correct for precisely one half of my email list.

After the predicted date arrives, the email Ids that got the ‘wrong’ prediction never hear from my crypto analytics agency ever again. You just happened to be in the ‘right’ list. This cycle repeats itself 10 more times, and each time, the ‘right’ prediction list halves itself.

At the end of the whole process, there are a total of 40 email addresses left (you are among the lucky few).

The Perfect Deal — Canvas Style

When I calculate your odds of making it all the way to the final email list, it truly does seem close to a miracle (around 0.2%). However, from my point of view, the probability of ending up with 40 email Ids after the 10th cycle is close to 100% (considering real-world uncertainties). It is, for sure, not a miracle.

At the end of the 10th cycle, I draft a ‘special’ deal email to the ‘special’ few. Thirty out of forty recipients sign up (congrats! You are one of them!) and I walk away with $150,000.

Here’s a breakdown of what just happened:

1. The cost of the email Ids list from shady strangers in the dark web — $666.

2. The cost of an automated email agent to ensure delivery and response — $99.

3. The cost of my effort to write and setup templates — 22 hours.

4. The look on my face on seeing my bank account’s balance go up in value by 6 figures — Priceless!

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How to Perfectly Predict Improbable Events in Real-Life

What I just fictionally illustrated is a phenomenon/trick that gamblers and quantitative traders have known for ages. It goes by several names with “The Baltimore Stockbroker” being the latest popular trend. But what is lesser known is its implications to real life.

If you haven’t figured it out already, this essay is not about clairvoyance. It is about the raw mathematics behind probabilities of improbable events. We often perceive ‘improbable’ as ‘impossible’. However improbable an event may be, it is a certainty that it will happen.

During the 2010 football world cup, Paul the Octopus got famous for correctly predicting the outcome of eight matches. The probability of Paul being able to pull this off was 1/256 = 0.4% (approximately). It was truly close to a miracle that Paul had pulled this off.

But on the other hand, such a global football tournament has a following in the order of millions (if not, billions). Among this sample space, the number of people/entities trying to predict using animals, pets, inanimate objects, etc., would be a handsome number (it was no coincidence that Paul was from Germany).

Among all of these potential candidates, the probability that one of them pulls off eight-in-a-row is significantly higher than the meagre 0.4% that Paul has from his perspective. Paul got famous because he was right. All of the animals/things that tried and got it wrong never got famous.

This phenomenon is so deceiving that we fall for it more often than you think. We often think that we can learn from celebrities and CEOs about how we too can be like them. We discount the role of luck in their growth to fame. If you are interested in an in-depth discussion of this topic, check out my essay on Are There Really Secrets To Success?

Final Thoughts

Consider 6 playing cards lying face down. I tell you that 2 of these are Aces and 4 of these are not Aces with 100% certainty.

What is the probability of choosing at least one Ace when flipping 2 cards consecutively?

Our instinct says the probability has to be 2/6 = 33% (approximately). However, the answer is: 1 minus the probability of choosing no Ace when flipping 2 cards consecutively.

P(At least 1) = 1 — P(None) = 1 — [(4/6)*(3/5)] = 60%

The key point to note here is that we instinctually tend to underestimate probabilities of improbable events where “at least” is in play.

To sum up, improbable events happen all the time. When we focus on the one improbable event that happened (after the fact), it leads to astonishment. When we focus on the whole sample space of improbable events that did not occur (but could have), we realise that it was a certainty that one among all of them had to occur with 100% certainty!

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*Disclaimer:

This essay contains fictitious elements including randomized usernames and situations. In case any of this content reflects real-life events, it is purely by coincidence; this essay is about improbable events occuring with certainty, after all!

Furthermore, I do not promote anyone to indulge in shady/immoral activities (on the internet or off). The situation I outlined in this essay is purely for illustrative purposes only! So, please act responsibly.

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Further reading that might interest you: How To Really Understand The Raven Paradox? and Is It Time For Us To Reimagine Regular Education?

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