♠♣ the parameters of limit poker ♥
β=bank roll
R=win rate
σ = standard deviation = √variance
T = time (hours)
τ = sample size
99.5% of the population is within 3 standard deviations = 3 σ
σ = √τ
β = R T - 3 σ √T
So, 0 = R T - 3 σ √T hours necessary to ensure a profit
(if you know your win rate)
dβ = R d(T - 3 σ √T )
0 = R dT – 3σ dT¹∕²
0 = R (1) – 3σ ½ (1/√T)
T = |3σ/2R|²
Monday, June 25, 2007
Saturday, June 23, 2007
Effects of debt related fiat currency
'He who cannot draw on 3000 years of history is living merely from hand to mouth'-Goethe
The US gross domestic product (GDP) is approximately $12,000,000,000,000 ($12 trillion). The federal government should borrow money on the global market based on its creditors believing they will be repaid in full with interest. However, it also prints new currency (M3) that dilutes the value of the currency.
Britain recovered from the highest recorded national debt of 250% of its GDP after World War II. Britain repaid its debts to about 50% of G.D.P.
Debt burdens of 150% of GDP have proven unsustainable. Smaller countries are not credit worthy anywhere near this level. Argentina lost its ability to borrow after its debt hit 65% of GDP. A borrowing limit for the United States using 150% of its $12 trillion GDP would be about $18 trillion.
The official Treasury debt equals $4.6 trillion but the government has also spent money borrowed from the trust funds. The government owes $3.2 trillion, of which, $2 trillion is to Social Security and Medicare trust funds. Count this and the US has a debt of $6.6 trillion. However, the Social Security trust fund requires an additional $4 trillion to cover its obligations. Add this $4 trillion and the current debt is $10.6 trillion. Medicare trustees states the fund faces a shortfall of $9 trillion in obligations. Now, the prescription drug benefit reflects another $21 trillion deficit that to cover its supplementary obligations. This debt must be borrowed as there is no trust fund from which it can be taken.
This aggregate debt is $40.6 trillion, which is well beyond the unsustainable 150% of GDP limit of $18 trillion.
Total U.S. obligations of $40.6 trillion are nearly 338% of the GDP.
Now the USA must remain an empire. An empire’s economic foundations, from Greek and Roman, to Ottoman and British, are based on its ability to tax other nations. An imperial ability to tax demands a better, stronger economy and military. Subject taxes go to improve the living standards of the empire and to strengthen the military dominance that is necessary to enforce the collection of such taxes. Nation-states tax its citizens but an empire can tax other nation-states.
America can tax the entire world indirectly via inflation. It does not need to enforce direct payment of taxes as the predecessor empires as it distribute a fiat currency to other nations in exchange for goods with the intended consequence of inflating and devaluing those dollars via M3 growth and paying back each dollar with less economic goods. This difference is an imperial tax.
The U.S. economy would not dominate the world economy if the U.S. dollar was tied to gold. The M3 currency could not increase if it was limited to a gold reserve. The Great Depression, with its preceding inflation from 1921 to 1929 and its subsequent ballooning government deficits, substantially increased the currency in circulation, and rendered the backing of U.S. dollars by gold impossible. President Roosevelt removed the dollar from gold in 1932. The U.S. dominated the world economy from an economic point of view but was not an empire as the fixed value of the dollar did not allow the extraction of economic benefits from countries since these dollars remained convertible to gold.
With William Jennings Bryan’s famous "Cross of Gold" speech, Keynesian monetary policies, and the historical record during the Gilded Age of depressions and bank panics represented by an onerous gold standard that most economists reject, no one is suggesting a return. Under the gold standard, the money supply was so limited with unprecedented economic, industrial, and population expansion that deflation resulted and ended the era with the Panic of 1873. However, deflation is not the problem with fiat currency.
The United States accumulated the world’s gold by supplying allies with provisions during WWII and receiving payment in gold, which allowed the dollar to become the world currency. However, the dollar supply is no longer limited to the availability of gold since the Bretton Woods arrangement. An Empire began when foreign governments could not exchange dollars for gold. The supply of dollars was increased to finance Vietnam and LBJ’s Great Society, where most of those dollars were given to foreigners in exchange for economic goods.
America was without prospect of buying these dollars back. The increase in dollar holdings of foreigners via persistent U.S. trade deficits was a classical inflation tax. A country normally imposes this tax on its own citizens but this time around an inflation tax was imposed on the entire world. In 1970-1971 foreign governments were demanding repayment for their dollars in gold, which caused the U.S. Government to default on August 15, 1971 by severing the link between the dollar and gold. This was an act of bankruptcy by the U.S. Government as it had extracted an enormous amount of economic goods from the rest of the world, with no intention or ability to return those goods, but the world was powerless to respond. The world had been taxed and it could not do anything about it. Therefore, the U.S. became an Empire.
Since, America sustains it Empire by continuing to tax the rest of the world. The United States must force the world to continue to accept ever-depreciating dollars in exchange for economic goods and to have the world hold more and more of those depreciating dollars. The economic reason to for the world to hold dollars since it could not buy back its dollars with gold was controlling the purchase of oil. Since 1972-73, the empire ensures the world only accepts U.S. dollars for oil. Because the world had to buy oil, it needs U.S. dollars. Since the world uses ever increasing quantities of oil at ever increasing oil prices, the worlds demand for dollars increases. Dollars are not exchangeable for gold but remain the only way to buy oil.
The economic essence is that the dollar is backed by oil. As long as that remains the case, the world has to accumulate increasing amounts of dollars because they needed dollars to buy oil. As long as the dollar is the only acceptable payment for oil, its dominance in the world is assured. The American Empire can continue to tax the rest of the world. If the dollar loses its oil backing our Empire may cease to exist. Imperial survival dictates oil is sold only for dollars. Oil reserves remain in sovereign states that are not strong enough, politically or militarily, to demand payment for oil in something else. Political or military means will be used to change any minds if a different payment is demanded.
A man who last demanded Euro for his oil was Saddam Hussein in 2000. At first, his demand was met with ridicule, later with neglect, but as it became clearer that he meant business, political pressure was exerted to change his mind. This caused the recession of March 2001. Countries, like Iran, wanted payment in other currencies, most notably Euro and Yen, the danger to the dollar was clear and present, and a punitive action was in order. We defended the dollar that supports the American Empire. We set an example, anyone who demanded payment in currencies other than U.S. Dollars will be punished. We went into Iraq to defend our Empire. Two months after the United States invaded Iraq, the Oil for Food Program was terminated, the Iraqi Euro accounts were switched back to dollars, and oil was sold only in U.S. dollars. No longer could the world buy oil from Iraq with Euro.
The current home values relative to inflation adjusted currency are the highest in history. Other housing booms have been an offshoot of excess profits during the roaring 20's, specifically Florida's growth and development, at the end of the World War II when property loans expanded to home loans, and then expanded to giving loans on mass produced items such as washers and dryers. The later increasing prices in the 70’s and 80’s were related to economic booms. However, the latest housing market value has no such foundation.
Increasing dollar circulation causes currency inflation reflective of the outstanding debt, as that is how the privately owned Federal Reserve Bank operates. The government quit providing the M3 numbers on the date that IRAN had planned to start using another currency to sell its oil and has not released it since.
Global inflation has been controlled by the government by allowing US consumers to borrow it so its circulation is taxable. First bankruptcy was overhauled then the rates were cut to entice internal borrowing. Cars had 0% interest t rates. Home lending was whatever amount you wanted (i.e. ads for 125% of value). Tons of currency entered the US market. Cars quit selling, and then houses quit increasing in price, now hedge funds, which are unregulated, are acquiring companies using debt. Solid companies have to borrow massive amounts internally or become takeover targets.
USA has spent $50,000,000,000.00 on rebuilding Iraq, not including costs of the war or troop support. Who is left to borrow next? Wars have always been won by the country that can best liquate its assets.
The Iranian government, which has over $53B dollars, is trying to use the Iranian Oil Bourse. This leads to the destruction of the financial system underpinning of our Empire as the Bourse is based on a euro-oil-trading mechanism that implies payment for oil in Euro. This circumvents the U.S. dollar by allowing oil to be bought or sold for the Euro. Europeans will not buy and hold dollars needed for oil if they pay with their own currencies. Adoption of the Euro for oil transactions provides the European currency with a reserve status that benefits Europeans at the expense of Americans. Chinese and Japanese will deplete dollar reserves and diversify with Euros that protect against the threat of depreciation of the dollar and spend remaining dollars without replenishing its holdings. Russia's economic interest is to adopt the Euro since the bulk of their trade is with European countries, oil-exporting countries, China, and Japan. Russians are buying gold with depreciating dollars. Arab oil-exporting countries will diversify its rising mountains of depreciating dollars with European countries who prefer the Euro for its stability and to avoid currency depreciation.
Britain has a strategic partnership with the U.S. The two leading oil exchanges are New York’s NYMEX and London’s (IPE) International Petroleum Exchange both of which has London IPE interests and it’s British Pound. The British did not adopt the Euro namely because the London IPE would have had to switch to Euros which would destroy the currency of a strategic partner. The Iranian Oil Bourse has the interests of the Europeans, Chinese, Japanese, Russians, and Arab who will adopt the Euro and seal the fate of the dollar. Americans cannot allow this to happen. The Iranian Oil Bourse would collapse the dollar, accelerate inflation, and increase U.S. long-term interest rates driving deflation or hyperinflation. If the Fed raises interest rates it will start a major economic depression, a collapse in real estate, and an implosion in bond, stock, and derivative markets, with a total financial collapse. Or, inflation where long-bond yield sinks the financial system in liquidity and hyperinflation destroys the economy.
The sinews of war are infinite money. – Cicero
First paper money issued in the Western world circulated in 1690 Massachusetts to pay for troops to fight against the French in King William's War (Nine Years' War, Europe). In 1729 Ben Franklin published, "A Modest Enquiry into the Nature and Necessity of Paper Currency". Ever hear the old quote, "Not worth a Colonial?"
Britain recovered from the highest recorded national debt of 250% of its GDP after World War II. Britain repaid its debts to about 50% of G.D.P.
Debt burdens of 150% of GDP have proven unsustainable. Smaller countries are not credit worthy anywhere near this level. Argentina lost its ability to borrow after its debt hit 65% of GDP. A borrowing limit for the United States using 150% of its $12 trillion GDP would be about $18 trillion.
The official Treasury debt equals $4.6 trillion but the government has also spent money borrowed from the trust funds. The government owes $3.2 trillion, of which, $2 trillion is to Social Security and Medicare trust funds. Count this and the US has a debt of $6.6 trillion. However, the Social Security trust fund requires an additional $4 trillion to cover its obligations. Add this $4 trillion and the current debt is $10.6 trillion. Medicare trustees states the fund faces a shortfall of $9 trillion in obligations. Now, the prescription drug benefit reflects another $21 trillion deficit that to cover its supplementary obligations. This debt must be borrowed as there is no trust fund from which it can be taken.
This aggregate debt is $40.6 trillion, which is well beyond the unsustainable 150% of GDP limit of $18 trillion.
Total U.S. obligations of $40.6 trillion are nearly 338% of the GDP.
Now the USA must remain an empire. An empire’s economic foundations, from Greek and Roman, to Ottoman and British, are based on its ability to tax other nations. An imperial ability to tax demands a better, stronger economy and military. Subject taxes go to improve the living standards of the empire and to strengthen the military dominance that is necessary to enforce the collection of such taxes. Nation-states tax its citizens but an empire can tax other nation-states.
America can tax the entire world indirectly via inflation. It does not need to enforce direct payment of taxes as the predecessor empires as it distribute a fiat currency to other nations in exchange for goods with the intended consequence of inflating and devaluing those dollars via M3 growth and paying back each dollar with less economic goods. This difference is an imperial tax.
The U.S. economy would not dominate the world economy if the U.S. dollar was tied to gold. The M3 currency could not increase if it was limited to a gold reserve. The Great Depression, with its preceding inflation from 1921 to 1929 and its subsequent ballooning government deficits, substantially increased the currency in circulation, and rendered the backing of U.S. dollars by gold impossible. President Roosevelt removed the dollar from gold in 1932. The U.S. dominated the world economy from an economic point of view but was not an empire as the fixed value of the dollar did not allow the extraction of economic benefits from countries since these dollars remained convertible to gold.
With William Jennings Bryan’s famous "Cross of Gold" speech, Keynesian monetary policies, and the historical record during the Gilded Age of depressions and bank panics represented by an onerous gold standard that most economists reject, no one is suggesting a return. Under the gold standard, the money supply was so limited with unprecedented economic, industrial, and population expansion that deflation resulted and ended the era with the Panic of 1873. However, deflation is not the problem with fiat currency.
The United States accumulated the world’s gold by supplying allies with provisions during WWII and receiving payment in gold, which allowed the dollar to become the world currency. However, the dollar supply is no longer limited to the availability of gold since the Bretton Woods arrangement. An Empire began when foreign governments could not exchange dollars for gold. The supply of dollars was increased to finance Vietnam and LBJ’s Great Society, where most of those dollars were given to foreigners in exchange for economic goods.
America was without prospect of buying these dollars back. The increase in dollar holdings of foreigners via persistent U.S. trade deficits was a classical inflation tax. A country normally imposes this tax on its own citizens but this time around an inflation tax was imposed on the entire world. In 1970-1971 foreign governments were demanding repayment for their dollars in gold, which caused the U.S. Government to default on August 15, 1971 by severing the link between the dollar and gold. This was an act of bankruptcy by the U.S. Government as it had extracted an enormous amount of economic goods from the rest of the world, with no intention or ability to return those goods, but the world was powerless to respond. The world had been taxed and it could not do anything about it. Therefore, the U.S. became an Empire.
Since, America sustains it Empire by continuing to tax the rest of the world. The United States must force the world to continue to accept ever-depreciating dollars in exchange for economic goods and to have the world hold more and more of those depreciating dollars. The economic reason to for the world to hold dollars since it could not buy back its dollars with gold was controlling the purchase of oil. Since 1972-73, the empire ensures the world only accepts U.S. dollars for oil. Because the world had to buy oil, it needs U.S. dollars. Since the world uses ever increasing quantities of oil at ever increasing oil prices, the worlds demand for dollars increases. Dollars are not exchangeable for gold but remain the only way to buy oil.
The economic essence is that the dollar is backed by oil. As long as that remains the case, the world has to accumulate increasing amounts of dollars because they needed dollars to buy oil. As long as the dollar is the only acceptable payment for oil, its dominance in the world is assured. The American Empire can continue to tax the rest of the world. If the dollar loses its oil backing our Empire may cease to exist. Imperial survival dictates oil is sold only for dollars. Oil reserves remain in sovereign states that are not strong enough, politically or militarily, to demand payment for oil in something else. Political or military means will be used to change any minds if a different payment is demanded.
A man who last demanded Euro for his oil was Saddam Hussein in 2000. At first, his demand was met with ridicule, later with neglect, but as it became clearer that he meant business, political pressure was exerted to change his mind. This caused the recession of March 2001. Countries, like Iran, wanted payment in other currencies, most notably Euro and Yen, the danger to the dollar was clear and present, and a punitive action was in order. We defended the dollar that supports the American Empire. We set an example, anyone who demanded payment in currencies other than U.S. Dollars will be punished. We went into Iraq to defend our Empire. Two months after the United States invaded Iraq, the Oil for Food Program was terminated, the Iraqi Euro accounts were switched back to dollars, and oil was sold only in U.S. dollars. No longer could the world buy oil from Iraq with Euro.
The current home values relative to inflation adjusted currency are the highest in history. Other housing booms have been an offshoot of excess profits during the roaring 20's, specifically Florida's growth and development, at the end of the World War II when property loans expanded to home loans, and then expanded to giving loans on mass produced items such as washers and dryers. The later increasing prices in the 70’s and 80’s were related to economic booms. However, the latest housing market value has no such foundation.
Increasing dollar circulation causes currency inflation reflective of the outstanding debt, as that is how the privately owned Federal Reserve Bank operates. The government quit providing the M3 numbers on the date that IRAN had planned to start using another currency to sell its oil and has not released it since.
Global inflation has been controlled by the government by allowing US consumers to borrow it so its circulation is taxable. First bankruptcy was overhauled then the rates were cut to entice internal borrowing. Cars had 0% interest t rates. Home lending was whatever amount you wanted (i.e. ads for 125% of value). Tons of currency entered the US market. Cars quit selling, and then houses quit increasing in price, now hedge funds, which are unregulated, are acquiring companies using debt. Solid companies have to borrow massive amounts internally or become takeover targets.
USA has spent $50,000,000,000.00 on rebuilding Iraq, not including costs of the war or troop support. Who is left to borrow next? Wars have always been won by the country that can best liquate its assets.
The Iranian government, which has over $53B dollars, is trying to use the Iranian Oil Bourse. This leads to the destruction of the financial system underpinning of our Empire as the Bourse is based on a euro-oil-trading mechanism that implies payment for oil in Euro. This circumvents the U.S. dollar by allowing oil to be bought or sold for the Euro. Europeans will not buy and hold dollars needed for oil if they pay with their own currencies. Adoption of the Euro for oil transactions provides the European currency with a reserve status that benefits Europeans at the expense of Americans. Chinese and Japanese will deplete dollar reserves and diversify with Euros that protect against the threat of depreciation of the dollar and spend remaining dollars without replenishing its holdings. Russia's economic interest is to adopt the Euro since the bulk of their trade is with European countries, oil-exporting countries, China, and Japan. Russians are buying gold with depreciating dollars. Arab oil-exporting countries will diversify its rising mountains of depreciating dollars with European countries who prefer the Euro for its stability and to avoid currency depreciation.
Britain has a strategic partnership with the U.S. The two leading oil exchanges are New York’s NYMEX and London’s (IPE) International Petroleum Exchange both of which has London IPE interests and it’s British Pound. The British did not adopt the Euro namely because the London IPE would have had to switch to Euros which would destroy the currency of a strategic partner. The Iranian Oil Bourse has the interests of the Europeans, Chinese, Japanese, Russians, and Arab who will adopt the Euro and seal the fate of the dollar. Americans cannot allow this to happen. The Iranian Oil Bourse would collapse the dollar, accelerate inflation, and increase U.S. long-term interest rates driving deflation or hyperinflation. If the Fed raises interest rates it will start a major economic depression, a collapse in real estate, and an implosion in bond, stock, and derivative markets, with a total financial collapse. Or, inflation where long-bond yield sinks the financial system in liquidity and hyperinflation destroys the economy.
The sinews of war are infinite money. – Cicero
First paper money issued in the Western world circulated in 1690 Massachusetts to pay for troops to fight against the French in King William's War (Nine Years' War, Europe). In 1729 Ben Franklin published, "A Modest Enquiry into the Nature and Necessity of Paper Currency". Ever hear the old quote, "Not worth a Colonial?"
Friday, June 22, 2007
Risk and Uncertainty
Uncertainty is measurable as a probability when all outcomes of certainty are defined. A probability of certainty is uncertainty, the entropy. Uncertainty is the randomness among certain outcomes.
Uncertainty is distinct from risk. If risk is a quantity susceptible of measurement, then risk is a measurable uncertainty. Risk that is un-measurable is not in effect an uncertainty at all but a result of any number of random unknowns.
Risk is defined as uncertainty only when it can be based on (quantitative) probability. It must by definable with an uncertainty, or variability of returns measured by a standard deviation of returns around a mean.
Risk can not assign such a probability if it can not be reduced significantly by attempts to gain all information about the phenomena in question and their causes or a defined uncertainty.
Risks of stock investments guess at immeasurable possibilities.
Risks of games of chance are uncertain at measurable probabilities.
Probabilities of measurable risks exactly predict every uncertainty in a game chance.
Randomness of real-world risks use mathematical models that attempt to predict immeasurable estimates of unknown situations as if it were a probability in a game of chance. The result is occasionally a good example of Feynman’s Cargo Cult Science.
Uncertainty is distinct from risk. If risk is a quantity susceptible of measurement, then risk is a measurable uncertainty. Risk that is un-measurable is not in effect an uncertainty at all but a result of any number of random unknowns.
Risk is defined as uncertainty only when it can be based on (quantitative) probability. It must by definable with an uncertainty, or variability of returns measured by a standard deviation of returns around a mean.
Risk can not assign such a probability if it can not be reduced significantly by attempts to gain all information about the phenomena in question and their causes or a defined uncertainty.
Risks of stock investments guess at immeasurable possibilities.
Risks of games of chance are uncertain at measurable probabilities.
Probabilities of measurable risks exactly predict every uncertainty in a game chance.
Randomness of real-world risks use mathematical models that attempt to predict immeasurable estimates of unknown situations as if it were a probability in a game of chance. The result is occasionally a good example of Feynman’s Cargo Cult Science.
Thursday, June 21, 2007
Investing vs Speculation vs Gambling
Investing is an attempt to forecast the yield of assets in the market
Speculating is an attempt to forecast the psychology of the market
Investor is a name given to passive investors
Speculation is the name of an active investor
>Investment is a name given to a successful speculation
Speculation is the name given to a failed investment
Investment infers an attempt toward a preservation of capital
Speculation infers an attempt toward enhancement of fortune
Investment attempts to prevent a lot of money from becoming a little
Speculation is an effort to turn a little money into a large fortune
Investment gone badly is called a speculation
Speculation gone badly is called a gamble
Investment involves less risk but is a form of a speculation
Speculation involves more risk but is a form of investment
Gambling involves the deliberate creation of new risks
Speculation involves the assumption of the inevitable risks
Uncertainty can describe risk that can be exactly measured
>Risk is an uncertainty only when it can be exactly measured
Investment or speculation involves immeasurable risk
Gambling involves risk with a measurable uncertainty
Psychologies of speculation and gambling are indistinguishable
Psychology with an appeal to fortune is considered a dangerously addictive habit
Financial risk can be uncertainty only with inside information
Gmax = R suggests inside information equals the rate of return
Law of large numbers is misunderstood by gamblers and investors
Investment < speculation < reckless gambling
Investment with borrowed money is always speculative
Speculation is considered riskier than investment
Gamblers create a risk
Speculators assume a risk
Average Return of investors = Average Return of stock market
Subtract one from the other and you get Ave Ret of active investors
Active Investor Average gains = Active Investor Average losses
Average Return of Passive investors = Average Return of Active
Investing is a zero sum - (mgt expenses + brokerage fees + taxes)
Prediction of risk = immeasurable certainty = any and all gain
Gamblers uncertainty can be measured risk with a positive expectation
Investor’s risk has an empirical evidence of positive expectation
A bet on stocks shows empirical evidence of a higher average return
A bet in an attempt to take advantage of those with less information
Favorable bets will be called investing
Unfavorable bets constitutes gambling
Investing, speculating, and gambling each represent bets that attempt to gain advantage of or take from one another. A positive expectation outcome is proportional to a difference in information. However, money is easily lost with a mathematical advantage due to the randomness of these outcomes. Investing is a positive expectation attempt to gain an empirically evident higher ‘than guaranteed savings’ average return. Speculating is an attempt to defy odds in order to gain an amount greater than the average return of the market. Gambling is an attempt to defy odds of outcomes with negative expectations. Speculating and gambling can have a positive expectation that is proportional to insider or privately held information.
People can't multitask
People can't multitask. Some mind's thought processes differ when people are thinking about the same thing. If he uses his brain to count to himself, he can not talk. However someone may visualize a tape with numbers on it going by and talk. He either can’t count to himself and talk or he can’t watch a metal tape and read. In summary, you can externally and objectively test how a persons brain works by observing what a person can and can’t do while he counts.
Basketball and Gambling
A basketball player's chance of making his shot is based on his athletic skill. His percentages increase with his advantage but has nothing to do with the results of his or her previous shots. Randomness-challenged minds give real-world errors of judgment that lead to the widespread belief that a basketball player has a hot hand when he makes a random number of consecutive shots yet the frequency or duration of the streaks never exceed chance fluctuations. Of course, give a large enough sample size it is likely that some unspecified player somewhere does have an inordinately lengthy lucky streak via a chance manifestation of regression to the mean. In any case, an inference engine such as one's mind does not necessarily result in the most acurate results.
Man has a number of misleading beliefs about random events that are applicable to his assumptions of randomness. Randomness is neither clearly defined nor understood. Even random number generators merely use some belief system to create an array of events random.
People take incredible amounts of risk in the stock market full of uncertainties and cheating opportunities but call it investing but consider gambling risk. Mathematically speaking, gambling should be easier to tolerate as risk numbers are known within a high degree of confidence and losses correspond to a well-defined chance where skill actually matters.
An allusion is to treat small samples of information drawn at random from a large population similar to one another and representative of the entire population. Statistically significant relationships between two variables that emerge from 20 individuals may not reappear from an additional 10 individuals, as the odds of this happening are less than 50-50. A mind thinks on a small random sequence where extended runs of one value or another inevitably cancels each other out. The gambler's fallacy reveals one will assume that a run of heads in a sequence of random coin flips will give way to a corrective series of tails to result in roughly equal numbers of heads and tails overall. Random sequences of two values alternate frequently from one value to another may contain extended runs of a single value. A sequence of "HHTTHTHTTH" as no better example of randomness than "THHHHHHHT," as the chances of observing either sequence is the same as any other of equal length.
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