This Week in History...

On July 4th, 1863, The Army of Northern Virginia, under General Robert E Lee, withdraws from Gettysburg after three days of battle. After a doomed frontal assault fails to dislodge Federal troops from their earthworks, the defenders are heard to chant “Fredericksburg! Fredericksburg!” not because they are geographically challenged, but in reference to the decisive defeat of the Army of the Potomac there in 1862.  Entrenched on high ground, Lee dealt an embarrassing setback to Federal forces who continued to charge Mayre’s Heights bravely, but in in ultimate futility. Just seven months later, and with the tactical situation reversed, Lee orders a frontal assault on fortified high ground believing his troops can accomplish anything. Instead, he hands Federals their revenge for Fredericksburg.
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Lee’s military blunder was actually a common psychological one known as the ‘Hot Hand Fallacy.’ If things go well for you enough times in a row, you begin to feel lucky.  Then brilliant. And finally entitled to success. This is usually when the law of averages reaches out with a dose of reality. No strategy works forever and flexibility, reading the situation for what it is and not what it should be, is the key to long term financial independence. Happy 4th of July everyone!