(Bloomberg Opinion) -- Are winning streaks real? Does the hot hand really exist or is it just our pattern recognition software run amok? How has our thinking about the statistics behind lucky runs evolved over time? Those were the questions when we spoke with this week's guest on Masters in Business, Ben Cohen, who covers the National Basketball Association for the Wall Street Journal. His new book, "The Hot Hand: The Mystery and Science of Streaks," addresses these issues and more.
In 2015, an unpublished paper was making the rounds among sports geeks and statisticians. It claimed to have discovered a statistical error in the classic 1985 study, “The Hot Hand in Basketball: On the Misperception of Random Sequences,” which argued that these hot streaks were just illusory pattern perception. Cohen wrote an article on the new paper, but was wary of putting out a column about an unpublished, nonpeer reviewed paper. Once professor Andrew Gelman of Columbia University validated the math, Cohen felt he could publish.
The column was a sensation, as was the paper it discussed. But Cohen couldn't get the idea out of his head, leading him to spend three years researching and writing about the ideas and math behind hot streaks. Eventually this work turned into the book.
We discuss other streaks beyond sports and three-point basketball shots: Shakespeare’s plays, arcade and video games, films, career success, the gambler’s fallacy, even the Spotify/iTunes “random” shuffle.
You can stream and download our full conversation, including the podcast extras, on Apple iTunes, Spotify, Overcast, Google, Bloomberg and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here. (Note: This was recorded March 10, before the work-at-home lockdown had begun).
Next week, we speak with New York real estate specialist Jonathan Miller, discussing the impact of the coronavirus pandemic on the industry.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”
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