So I don’t gamble, and don’t ever indend to make it a habit.
But a friend told me to play roulette, and I would have a ~47% chance of doubling my money and , as long as I had enough money to keep doubling my stake, would have a ~95% break even if I kept going until I won and never played again.
So say I had $200k in the bank and always put my money on red
Spin 1 : $5K
Spin 2: $10K
Spin 3: $20K
Spin 4: $40k
Spin 5: $80K
Spin 6: $160k
In this scenario, I’d have a ~47% chance of winning $5k, and just a 2% chance of losing $160k?
EDIT: Although just working this out, I think I would probably put the 160k into a 4% savings account if I had it, or start off way smaller amounts e.g. $500 to reduce my chane of losing money significantly lol.
In: 8
Take an example. You’ve got $200k
Spin 1, you put $5k in with a 52.7% chance to lose. You lose. You now have $195k
Spin 2, you put $10k in with a 52.7% chance to lose. You lose. You now have $185k
Spin 3, you put $20k in with a 52.7% chance to lose. You lose. You now have $165k
Spin 4, you put $40k in with a 52.7% chance to lose. You lose. You now have $125k
Spin 5, you put $80k in with a 52.7% chance to lose. You lose. You now have $45k
What now? You’ve not got enough left to double your last bet and cover your loss. So you put the remaining $45k in with a 52.7% chance to lose. You lose. You have no money.
At each spin, you’re doubling the amount you’re risking on the same odds that are still against you. It’s just digging the same hole, but faster.
Take an example. You’ve got $200k
Spin 1, you put $5k in with a 52.7% chance to lose. You lose. You now have $195k
Spin 2, you put $10k in with a 52.7% chance to lose. You lose. You now have $185k
Spin 3, you put $20k in with a 52.7% chance to lose. You lose. You now have $165k
Spin 4, you put $40k in with a 52.7% chance to lose. You lose. You now have $125k
Spin 5, you put $80k in with a 52.7% chance to lose. You lose. You now have $45k
What now? You’ve not got enough left to double your last bet and cover your loss. So you put the remaining $45k in with a 52.7% chance to lose. You lose. You have no money.
At each spin, you’re doubling the amount you’re risking on the same odds that are still against you. It’s just digging the same hole, but faster.
It’s only a dumb idea to go to a casino and play with more money than you’re prepared to lose. If you’ve got a grand you want to throw away go have fun and good luck. If you can’t afford to lose the money don’t walk in the casino.
It’s only a dumb idea to go to a casino and play with more money than you’re prepared to lose. If you’ve got a grand you want to throw away go have fun and good luck. If you can’t afford to lose the money don’t walk in the casino.
Flip a coin 100 times and count how many times it lands heads/tails 6 or more times in a row. You will be very surprised at the results
Flip a coin 100 times and count how many times it lands heads/tails 6 or more times in a row. You will be very surprised at the results
I think most people have covered why this is not a sure thing. But I’m surprised no one has brought up the [Monte Carlo (or Gambler’s Fallacy)](https://en.m.wikipedia.org/wiki/Gambler%27s_fallacy#Monte_Carlo_Casino) (or maybe I missed it somewhere in the comments).
I think most people have covered why this is not a sure thing. But I’m surprised no one has brought up the [Monte Carlo (or Gambler’s Fallacy)](https://en.m.wikipedia.org/wiki/Gambler%27s_fallacy#Monte_Carlo_Casino) (or maybe I missed it somewhere in the comments).
You’re not doubling your money. You need to have the highest amount to start with. So that’s the amount of money that count.
If you’re betting $500 and have $500k. You’re risking $500k, and your best hope is to gain $500. You’re much more likely to get the $500 than to lose the $500k, but you’re expectancy is still to lose money because $500k times the probability to lose it is higher than the $500 times the probability to win it.
Also, you’re trying to get an amount of money that is negligible for you. You need to be extremely rich to be allowed to risk $500k, so the $500 you’re likely to win is basically nothing to you.
It’s like an inverted lottery, though the expectation is not inverted. You’re almost sure to win rather than almost sure to lose, but what you win is negligible rather than life changing. Like the lottery, though, you still have a negative expected gain.
You’re better off investing that $500k. You’re expected to do a few percent if you invest it in bonds (the exact expectation depends on the interest rate) and about 8% if you invest it in stocks though it’s likely to go down in the short time.
You’re not doubling your money. You need to have the highest amount to start with. So that’s the amount of money that count.
If you’re betting $500 and have $500k. You’re risking $500k, and your best hope is to gain $500. You’re much more likely to get the $500 than to lose the $500k, but you’re expectancy is still to lose money because $500k times the probability to lose it is higher than the $500 times the probability to win it.
Also, you’re trying to get an amount of money that is negligible for you. You need to be extremely rich to be allowed to risk $500k, so the $500 you’re likely to win is basically nothing to you.
It’s like an inverted lottery, though the expectation is not inverted. You’re almost sure to win rather than almost sure to lose, but what you win is negligible rather than life changing. Like the lottery, though, you still have a negative expected gain.
You’re better off investing that $500k. You’re expected to do a few percent if you invest it in bonds (the exact expectation depends on the interest rate) and about 8% if you invest it in stocks though it’s likely to go down in the short time.
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