The infamous coin toss
Huh. So I wrote the code, and ran the simulation. Now I get it.<p>Investors: 100,000 Iterations: 100<p>Average worth after 100 iterations: $83.923<p>Average net worth increases. However the distribution of wealth is skewed
dramatically.<p>Winners: 13,704 (net worth of more than $1 at the end)
Investors worth < $0.01: 53,935<p>What That Guy was worth (the investor who made the most money):<p>$1,171,830.00<p>He flipped 71 heads and 29 tails.<p>Median wealth of all investors: $0.00515378<p>What could have been made more clear in the presentation. 
Average wealth increases; but average log(wealth) decreases.
Investors on the long improbable upper tail make 
huge amounts of money; investors on the lower tail 
just don't make much difference to the average, when they 
lose 40% of $0.01. What causes the wild income distribution:
the fact that log(wealth) decreases on average. This doesn't 
decrease the total money supply, but it does increase the 
skewed distribution of wealth.<p>It has nothing whatsoever to do with anything related to flipping consecutive heads and tails. And a great deal to do with the fact that the log(gain) is 0.405465 and the log loss is -0.510826. So the average investors log(wealth) decreases over time even though the average total wealth increases.<p>Most figures are wildly variable from trial to trial. Most especially, what That Guy makes is highly variable. If he rolls 72 heads and 28 tails instead of 71 heads and 29 tails, then he's worth $2,565,000 more, and single-handedly adds $25.65 to the average net worth! The number of people who lose money is surprisingly, depressingly consistent.<p>The obvious conclusion: increasing wealth concentration is an unavoidable consequence of capitalism that probably has very little to do with merit.<p>The only solution: eat the rich.