Gambler's Fallacy

We believe that random sequences must 'balance out' — that after a run of one outcome, the opposite is now overdue. But independent random events have no memory.

• After a roulette wheel lands on red five times in a row, gamblers bet heavily on black — convinced it is 'due.' Each spin is entirely independent.
• A couple who has had three boys believes the next child is 'more likely' to be a girl — the probability is still 50/50.
• Investors sell a stock after several good years, believing a bad year must be coming to 'balance things out.'