Russ: I get an email from a football predictor who says, 'I know who
is going to win Monday night. I know which team you should bet on
for Monday night football.'
And I get this email, and I think, well, these guys are just a bunch
of hacks. I'm not going to pay any attention to it. But it turns out
to be right; and of course who knows? It's got a 50-50 chance. But
then, for the next 10 weeks he keeps sending me the picks, and I
happen to notice that for 10 weeks in a row he gets it right every
time. And I know that that can't be done by chance, 10 picks in a
row.
He must be a genius. And of course, I'm a sucker. Why?
Guest: So, let's say after those 10 weeks in a row you actually
subscribe to this person's predictions. And then they don't do so
well, after the 10 weeks.
And the reason is that the original strategy was basically: Send an
email to 100,000 people, and in 50,000 of those emails you say that
Team A is going to win on Monday. And in 50,000 you say Team B is
going to win on Monday.
And then, if Team A wins, the next week you only send to the people
that got the correct prediction. So, the next week you do the same
thing. 25,000 for Team A, 25,000 for Team B. And you continue doing
this. And the size of the number of emails decreases every single
week, until after that 10th week, there are 97 people that got 10
picks in a row correct. So you harvest 97 suckers out of
this.