There are experiences in life that seem to be lessons but aren’t. A noteworthy trait of the lucky is that they know what they can’t learn anything from.

“Twice in a row I had a hunch about  stock but didn’t buy it, and the doggone stock doubled. I’ve sure learned by lesson! Next hunch I get, I’m going to back with everything I’ve got!”

A good piece of learning? No, a potentially disastrous one. All the investor has really learned is that good and bad luck happen.

“I’ve been married twice, and my husbands both cheated me. I’ll never trust a man again.”

“I just realized: Every time I go to the track with Marie, I win. So from now on….”

“Seems like every time I quit my job, there’s a shake-up and the person in the job gets promoted. Boy, have I learned my lesson! I’ll stay in this job till I get what’s coming to me.”

Nonlessons, all of them. It goes back to the First Technique, learning how to make distinctions between luck and planning. When outcomes are brought about by random events that are not under anybody’s control – events that we would define collectively as luck – then you must be very careful in determining what lessons may be drawn from them. The habit of deriving false lessons from life’s random happenings is a trait of the unlucky.

Nonlessons often grow out of unwarranted generalizations. A certain kind of event happens a few times in association with a certain kind of person, and you make a sweeping generalization to include all people of that kind. Many feminists, for example, are women who, by bad luck, have had several unhappy experiences at the hands of men. The generalization: “All men are untrustworthy.” Or “All men are rapists at heart.” Similarly, any divorced men are bitter toward all of the opposite sex. “Never trust a woman. You give her half a chance, she’ll steal everything you’ve got.”

It may be your bad luck to encounter such an individual at some time in your life. It may even be your worse luck to have your life affected by more than one. But if that happens, it will be important not to derive a misleading lesson from the experience. Recognize that you have received a nonlesson. You have learned nothing except that bad luck happens.

Taking that kind of false lesson seriously may or may not do you grave harm. In the wrong circumstances, it can cripple you. If you withdraw from the fast flow because of a couple of unhappy experiences, you may achieve your purpose of shielding yourself against bad luck; but you also shield yourself against good luck.

Another kind of nonlesson, just as common but less obvious, comes from the belief that history is going to repeat itself. People who hold this belief believe, as a corollary, that you can learn detailed lessons for the future by studying the past.

All kinds of otherwise smart people subscribe to this peculiar dogma. They enjoy quoting pithy statements on the topic: “Those who persistently fail to learn the lessons of history are doomed to repeat is. “This statement has been variously attributed to several nineteenth-century statesmen, who in turn may have plagiarized it from somebody still earlier. It’s clever, but is it true? Unfortunately, no, except in the most vague and general way.

History simply does not repeat itself. Why should it? History is the product of what billions of men and women are doing, thinking, and feeling at a given time. It is in constant flux. It is entirely unpredictable. Lessons? As Henry Ford put it, “History is bunk.”

Certainly it can teach huge, generalized lessons such as “War is hell.” But can it teach us how to stay out of wars? Of course not. If it could, the world would be at peace. If it were possible to study history and say, “Oh yes, that’s how to do it!” then the world’s nations would have chosen peace long ago.

Unfortunately, history offers no such lessons. Every war starts because of a unique combination of mistakes, bad luck, bad responses, and other factors – a combination that is never repeated. Studying wars of the past is unlikely to be of the slightest help in preventing those that may face us in the future, including the big one that everybody has nightmares about.

And it is the same in your personal and financial life. Certainly, there are some lessons that can be derived from past experiences – very useful lessons, at times. You can often judge an individual’s future behavior, for instance, by consulting the record: How did he or she behave in similar situations in the past? This accumulation of knowledge about an individual is the basis of trust, without which human life could not work at all. The more “history” you collect on the men and women who play important roles in your life, the more you trust them (or don’t trust them, as the case may be). These historical lessons about individuals aren’t infallible, but they turn out right often enough to be a useful and ubiquitous part of our daily dealings with each other.

But beware history’s nonlessons. A Merrill Lynch account executive tells of a customer who had what he thought was an infallible system for trading in gold. The customer had gone back through years of records and painstakingly compiled a detailed history of important ups and down in the yellow metal’s price. He carefully noted what else was happening in the financial world at the times of gold’s major price swings. And from this exhaustive history, he derived what he called “indicators” of price moves to come. Just before the market price of gold posted a major gain, he noted, the stock markets was always in a slump, though utility stocks were up; bond yields were zigzagging in a certain pattern; residential housing sales were recovering from a dip; and so on. To make money in gold, he determined, all he had to do was wait until all or most of his indicators clicked into place, then buy.

The theory, of course, was that history was going to repeat itself.

“He had beautiful charts and tables” the Merrill Lynch man recalls wistfully. “It sure looked like it ought to work.”

Unfortunately, it didn’t work. You can often predict what one individual will do, but only in rare circumstances can you predict what a lot of people will do. The market price of gold, or any other fluid-priced speculative entity such as real estate of stocks, s the end product of millions of people’s feelings, thoughts, and actions, all churning together and reacting one against another. The factors determining that end product, the price on a given day, are so many and so staggeringly complex that they are entirely beyond anybody’s ability to control or predict. The situation, in other words, is one on which the dominant influence is luck; and when any piece of history is influenced by luck to that extent , it cannot be expected to repeat itself reliably.

The man with the infallible gold trading system had not realized this. He had combed through history in the hopes of picking up useful lessons: “This and this and this are the things that happen before the price of gold goes up.”

What he got was a nonlesson. True his indicators had preceded a gold price jump several times in the past. But why? No reason, just luck. Pure, random chance had made history repeat itself, or seem to. Was there a good lesson to believe it would happen that way in the future? No, there was none.

The man bet a lot of money on some gold-mining stocks at what he judged was the right time. It turned out to be the wrong time. The stocks’ prices sagged. He might have saved himself if he had been master of the Fifth Technique: luck selection. But he didn’t have that technique to help him either. Several years later, he is still waiting to get his money back.

How can you tell whether a historical outcome was caused by luck or by something more reliable, such as person’s character? One good way is to ask whether there are clearly visible links of cause and effect.

In the case of a person’s character, character itself is the linking mechanism. A situation is brought to bear on Mary Smith; she responds in a certain way because it is her nature to do so. When the same situation arises next week, you can reasonably expect history to repeat itself. Of course, you can be fooled. There is an element of luck in this, as in all human phenomena. Mary Smith’s character may change in time, or she may act out of character for unknowable reason or certain occasions, or your reading of her character may be flawed. Still, this element of luck is not large. If you make judgments and predictions based on Mary’s character, our chances of being right are tolerably good.

But in the case of the infallible gold trading system, there were no clear links of cause and effect. The man merely observed that on a few occasions in the past, here seemed to be a relationship between certain events in the housing industry and the price of gold. But what was the relationship? What caused what and how? He didn’t know. And that should have warned him that he was about to lose money on a nonlesson.

You can watch people in gambling casinos studying similar nonlessons every night of the week. They will watch a certain slot machine or roulette wheel for weeks and weeks. Some even keep records in little notebooks. They then invent nonlessons by which to guide their play. Some of these nonlessons are highly complicated, while others are the soul of simplicity. A roulette watcher might  note for example, that whenever the wheel turns up a number containing the digit 6, the number 28 comes up within the next few coups. “Aha!” the watcher says, convinced that he has discovered a Great Truth, hidden from everyone else. Now all he has to do, he believes, is wait until another 6 turns up and put his money to sweeten its earnings report.

The watcher’s calculations were based on a piece of history generated entirely by luck. The convergence of 6 and 18 a few times was random and accidental. That kind of history simply cannot be counted on to repeat itself. If it does happen to repeat itself, the recurrence will be nothing more than the extension of a run of luck. But as we saw in our studies of the Fourth Technique, runs are much more likely to be short than long.

I have been playing 6 and 28 on roulette wheels and in lotteries for many years; but I do it strictly in according with the Seventh Technique; constructive supernaturalism. As I mentioned earlier I regard them as my lucky numbers because they represent my birthday, June 28. They are also the only two “perfect” numbers on a roulette wheel – indeed, the only perfect whole numbers below 100.

That makes them perfectly lovely numbers. My attention is always drawn to them, even in situations in which I am not a participant. When I see them involved in apparent runs of luck, I feel a strong temptation to concoct nonlessons. “Those two numbers are always in the money!” It is a temptation that must be steadfastly resisted.

Several years ago, while in New Jersey on a business trip, I learned from a newspaper that the winning number in the previous day’s “Pick-It” lottery was 628. This didn’t do anything for me financially, since I wasn’t in the game, but it did give me a happy little buzz. A couple of weeks later, back home in Connecticut, I was astonished to read that 286 had turned up as the winner in the state’s daily lottery.

Was Lady Luck trying to send me some kind of signal? It was tempting to think so. The temptation became almost overwhelming when I picked up my morning newspaper a day later, turned to the financial pages, and studied the previous day’s action on the New York Stock Exchange. There was a certain stock I had been watching for several months. I had thought of buying it, had finally determined that the odds of success weren’t attractive enough, but still couldn’t get it out of my mind. When I checked the stock that day, the first number that hit me in the eye was the day’s trading volume: 628 round lots.

What a temptation! Those lucky numbers of mine had been winners twice in recent history while I was watching. Could it happen a third time? Would the run continue?

I took myself firmly in hand and said, no. If one would be lucky, one must know what one can’t learn anything from. The recent history of those numbers offered no lessons about the future. I refrained from buying any of the stock.

That was a lucky piece of inaction. Not more than a few weeks later, the trading price plunged on bad earnings news and stayed down for several years.