The reason is pretty simple - probability of events are an important input to calculation of expected values. If the probabilities are off, expected value calcu

The reason is pretty simple - probability of events are an important input to calculation of expected values. If the probabilities are off, expected value calculations will differ. Also, Expected Value works under the “law of large numbers” assumptions. That in turn brings into picture the “sequence of return” risk. Two drastically different sequences can lead to the same Expected Value but can have serious short term implications. “The market can remain irrational longer than you can remain solvent.”