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May 15

Alt Text: 4 Scams That Fool the Skeptics

Its been said, enough times to fill an olympic-size swimming pool with smugness, that the lottery is a tax on stupid people. I cant be sure that a $40 sculpture of Wonder Woman thats a third breasts by weight is a better investment than 40 scratchers, but sure, lets go with that.

Certainly the lottery doesnt deserve to be part of any long-term financial plan any more than, say, counting on your children to support you, but what puzzles me is that people who count themselves as strict rationalists end up getting involved in voodoo as dubious as crystal healing, because certain forms of voodoo have a veneer of mathematical legitimacy.

Lets look at a few lottery tickets for the skeptical set.

Heres the thing about picking stocks: You cant. Hard evidence has demonstrated again and again that the human chances of outperforming the market by picking individual stocks is, if anything, lower than that of a random number generator or a chimpanzee, although conservatives argue that the chimp is merely concerned about the capital gains tax.

People who think theyre stock-picking geniuses are either only remembering their good picks, or theyre just getting lucky. Remember, if 10 million people pick stocks, a bunch of them are randomly going to have a one-in-a-million success.

If you want more and better work from your employees, what do you do? Offer them more money, of course. Everyone knows that the bigger the cash-carrot you dangle, the faster the donkey trots.

Psychological studies, however, have shown again and again that cash only translates into performance under limited circumstances, and that most workers would rather be treated like human beings. And yet, from paying kids for grades to protecting insurance industry profits, entire economic policies revolve around the idea that human beings are just locomotives that run on cash rather than coal.

Its simple, right? Eat fewer calories than you expend and youll lose weight. This is in spite of the fact that dieting has only about a 5 percent long-term success rate, and typically the dieter gains back all the weight and more.

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Alt Text: 4 Scams That Fool the Skeptics

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