Evan Coopersmith

The world is frustratingly, annoyingly, often maddeningly random. Traders lament the ebbs and flows of a market they cannot control. Baseball fans lament bloop singles from poorly-struck balls. And words like “serendipity” are deployed far less frequently than those associated with “fate” or “god’s plan.” From politics to finance, we are romantics when it comes to narratives. We abhor an outcome without a satisfactory explanation.

The year was 2008. I was spending my days in a small office in lower Manhattan with two college classmates and my nights in a small studio apartment across the Hudson in Jersey City. The financial world was chaotic and in so many ways, unpredictable. The subprime collapse had already left Lehman Brothers bankrupt and threatened the solvency of several European nations.&nbsp;

My partners and I were writing models to predict the prices of <a href="https://en.wikipedia.org/wiki/Derivative_(finance)">derivatives</a>.

On any given day, the office television would be set to CNBC, with a rotating band of talking heads attempting to explain what the market had done and why. They would opine about the confidences and fears of traders from Manhattan to Hong Kong.&nbsp;

No one wants to describe Wall Street as a “<a href="https://en.wikipedia.org/wiki/Random_walk">random walk</a>” with the cameras rolling.1 No one is compensated lavishly for throwing up their hands and asserting that most of what transpires is as unexplainable as the reason why the coin fell as heads or tails.

Ok, maybe <a href="https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street" style="">Burton Malkiel</a>

The annals of athletic lore are rich with stories of heroes and goats alike, of those who rose to meet the moment and those who shrunk when the pressure increased. This is, of course, the backdrop of compelling drama and punditry. It is not, however, statistically justified. The “<a href="https://link.springer.com/chapter/10.1007/978-3-030-79032-5_6">clutch gene</a>” is remarkably resistant to statistical analyses that might reveal it.&nbsp;

It turns out that Derek Jeter was an excellent hitter when the game wasn’t on the line as well. Narratives are penned to fit the observations. And of course, when the improbable occurs, there must be a reason. If even Einstein could be frustrated into an assertion that “god does not play dice,”2 what chance do us mere intellectual mortals have?

Ultimately quantum physicists would reveal that if there is a god, assuredly, he is a fan of cosmic Yahtzee. Or, as <a href="https://history.aip.org/exhibits/einstein/ae63.htm#:~:text=Einstein%20and%20Bohr,telling%20God%20what%20to%20do.%22" style="">Niels Bohr retorted</a>, “Einstein, stop telling god what to do.”

Do we really want to dismiss the culminating moments of a World Series or a Superbowl as a random bounce of a round ball off a round bat or the impact of turbulent airflow on a flying pigskin? 

And thus, we reach for explanations even when none exist beyond the vicissitudes of chance.&nbsp;

I cannot begin to count the number of vociferous debates with those who would insist that what we have observed is explained by the psychology in a player’s head (complex and opaque), or the brilliant or blunderous machinations of coaches (better for post-game interviews, but ultimately a guess) rather than (gasp) chance. But then, I’m the jerk dismissing the interesting angles and the other folks are finding richness in the experience. Fandom &gt;&gt;&gt;&nbsp; random!

Those well-versed in the literature loved by cynical financiers and efficient market hypothesis enthusiasts are familiar with the example of asking 1,000 monkeys to pick stocks at random. At the end of the year, ~500 will have “beaten the market.” So we fire the 500 poorly-performing primates and repeat. At the end of the next year, ~250 will have beaten the market for two consecutive years. Fire another 250 sullen simians and repeat.&nbsp;

After five years, there will be 30+ monkeys who have beaten the market for five consecutive years.&nbsp;

Anyone want me to point them towards the cage of those baboonish Warren Buffetts?&nbsp;

Of course not. In this case, the frame of the problem makes the flaw in such reasoning obvious. We know that chance will create those aberrations, and thus, are unmoved when we observe them.

But there are folks plying their trade and offering their wisdom by virtue of having been right many times in the past. And however disheveled and inarticulate, they neither look nor sound like monkeys.&nbsp;

When we detest the explanation of randomness, we replace that explanation with another that sounds like “that sharply-dressed, well-spoken gentleman sure seems to have an eye for alpha&nbsp; - we should have him invest our money!”

Confirmation bias ensures that once a narrative is established, it is difficult to displace it. When random events confirm the narrative, the narrative is bolstered. When random events would disconfirm that same narrative then and only then do we dare say “eh, it was probably luck.”

When someone is diagnosed with a horrible disease or the victim of a senseless crime, do we consider the probability of experiencing a similar fate one day? Perhaps. But more often, we attempt to find the characteristics that distinguish them from us. We blame their suffering on their genetics, their diet, their habits, their choice of walking paths, something, anything to assign a more satisfying explanation than “it was random, and next time, we may find ourselves on the wrong end of the wheel in the sky.”

The rubber hits the road when we are forced to rely on the wisdom of others or our own intuitions. I must invest my money in something or keep it stored beneath my mattress. I must make sense of the events of the world I inhabit or else authorize someone to do so on my behalf.3

I am in no way dismissive of advisors, counselors, therapists, and other such professions, to be clear.&nbsp;

Worse, we all must assign meaning to the causes of joy and suffering that occur across the landscape of our lives. To whose authority will we submit ourselves? An authority that believes there is no arbiter, no control, no agency beyond the whimsy of some cosmic dice?&nbsp;

I loathe the idea of a truly, profoundly, fundamentally inexplicable world. I am kept awake by the control I cannot exert, by the predictions that must be made in order to live one’s life,4 and the harsh reality of a random universe.

I still struggle to accept that negative outcomes needn’t necessarily require a source to which to assign blame. I still struggle to accept that my own positive outcomes needn’t necessarily require a pat on the back and the assignment of credit.&nbsp;

But explanations are no more likely to be correct when they are satisfying. The bouncing ball off the round bat is often little more than a random event. Perhaps I am unfit to be a sportswriter for October baseball.&nbsp;

I do not seek consolation. Only the wisdom to accept the world as it is, not as a more satisfying narrative might have me believe.

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