The Hot Hand Debate

The hot hand in basketball — the idea that a player who has hit several shots in a row is more likely to make the next — was long dismissed as a fallacy too. Newer research suggests it may be partly real in some sports, because human performance is not purely random the way a roulette wheel is.

The lesson: distinguish between genuinely random systems (roulette, lotteries) and partially skill-based systems (sports, investing). The gambler's fallacy applies only to truly random events. Confusing the two in either direction leads to bad decisions.