In 1941, when I started my first job at The American Locomotive Company in Schenectady, New York, I met a numbers runner for the first time. An individual would come to the area where I worked and take bets from workers. There was a game the workers played. If I guessed what the number to come out the next day was going to be, I’d get $540 for every dollar that I bet. The number to guess could have three digits from 000 to 999. This was a marvelous reward, I thought, and I tried doing it for a while. I didn’t win anything so I reduced the amount bet to ten cents and made ten bets each day. My reasoning was that I had ten times as much chance to win. My bets were no more successful with this strategy than they had been before.I thought about the problem and hit upon an idea that I thought might work. I asked the runner if he could give me a list of the winning numbers for the last several years. He was able to do this and did. I divided the numbers into 100 groups of ten numbers each. (There are 1000 possible numbers between the numbers 000 and 999.) I numbered each group from 1 to 100 and made a table that showed how many times a number had won in each group. Some groups had one or two winning numbers, some six or seven, some none. I felt that if there had been no winning number in a particular group for a long time that group was due! That is, if a group had not had a winning number within it, the chances of that group receiving a winning number was better than they were for the groups that had had a few or even many winning numbers. I restricted my bets to groups that had not had a winning number for the longest time.
As before, none of my bets won. This puzzled me greatly. Where had my logic gone wrong? I stopped betting feeling that the numbers knew me and didn’t want to give me any winners. It was long time before I finally learned that numbers have no memory. The chances that any one number would win on any particular day were 1000 to 1 against winning. These were the chances for every number every day. It did not matter how long a number or a number within a group had not come out.
The reward of 540 to 1 was not at all generous. The mathematics of what I had been doing showed me that for every thousand dollars I played in this game, I would lose $460.
This experience soured me against gambling in general. I do invest in stocks. Some people might deem this to be gambling.