angela: being payed for not playing

[angela]

What is the math saying about the following situation:

A safety investment of the whole bankroll(100K) at an interest rate of 25%/year with no up and downs(SD)and NOT playing BJ, or playing BJ with an expected return of 40K with the known fluctuation?

[jblaze]

25%??? Please tell me where you can get this high of a guaranteed return.

> What is the math saying about the following situation:

> A safety investment of the whole bankroll(100K) at an
> interest rate of 25%/year with no up and downs(SD)and
> NOT playing BJ, or playing BJ with an expected return
> of 40K with the known fluctuation?

[Don Schlesinger]

> What is the math saying about the following situation:

> A safety investment of the whole bankroll(100K) at an
> interest rate of 25%/year with no up and downs(SD)and
> NOT playing BJ,

Unbelievable that such a thing could exist. Current risk-free rate is about 5%-5.50% annually. Getting 25% as a "safety" investment makes no sense to me.

> or playing BJ with an expected return
> of 40K with the known fluctuation?

I'd take the 25%, if such a thing were possible. The certainty equivalent for BJ, depending on many factors, none of which are enunciated here, is around 50%, meaning that a certain $25,000 would be preferable to a risky $40,000.

Don

[angela]

> Unbelievable that such a thing could exist. Current
> risk-free rate is about 5%-5.50% annually. Getting 25%
> as a "safety" investment makes no sense to
> me.

> I'd take the 25%, if such a thing were possible. The
> certainty equivalent for BJ, depending on many
> factors, none of which are enunciated here, is around
> 50%, meaning that a certain $25,000 would be
> preferable to a risky $40,000.

> Don

If a poster says safety, it means safety=100%

It was only an example. The true story is, that my partner told me, I spent the time with him, and I don?t have to play
BJ. I will receive every month like 2K, and cannot play.
My bankroll is in the 100K area.
So under the math situation, it is valuable?

[VerdugoJohn]

"The true story is, that my partner told me, I spent the time with him, and I don?t have to play BJ. I will receive every month like 2K, and cannot play.

My bankroll is in the 100K area.
So under the math situation, it is valuable?"

Well, financially it seems like a good return...but i think you ought to access your partner's financial stability and williness to stick to the commitment he is making, as well as your ability to collect should a problem arise between you and your partner....you might need to talk to a family law expert, as it sound like a palimony situation is developing here...

your choice is your own, and i must confess my concept of interpersonal relationships would not allow me to participate something like this...but i must admit, the rich are different.

[VerdugoJohn]

but i think you ought to ACCESS (spelling wrong!) your partner's financial stability and williness to stick to the commitment he is making, as well as your ability to collect should a problem arise between you and your partner....

[suicyco maniac]

> I will receive every month like 2K, and cannot
> play.
> My bankroll is in the 100K area.

........You should make a lot more then 2K a month playing BJ with a 100K bank.

[mcking]

You have a better expected value if you put that money into a Nigerian money laundering scam. The probability of realising the money may be miniscule (very very very near to zero) but the return is a couple hundred million folds. Just a wild wild wild guess....risk/reward ratio is almost the same in both cases.

[mcking]

On a more serious note, I think it is erroraneous to compare a passive investment to blackjack play. A more correct comparison would be to compare the return of paid job vs blackjack play. Our assumption is the more we play, the probability of us making money is higher. The rate of return is determined purely by the %age of advantage we have under a particular playing condition. If the rate of return is positive, we will win in the long term. There is no way to win if the return is negative.
For one to promise a return of $2,000 A MONTH would suggest that that person still does not fully comprehend what most of the professional players here are doing. In the short term (which can mean more than 6 months), it is impossible to guarantee a profit. I would suggest that you exercise more caution in this situation........of course I can be totally wrong about this. lol.

[reader]

that a safety 25,000 Dollar/year is better, than an expected win by BJ of 40,000 Dollar\year.

Example: you play ervery day. Your expected win is 40K\year. Now your Mom phone you, boy visit me for 4 weeks. Intuivily you think, shit, 4 weeks no playing. But your Mom speaks, dont worry, I give you 2,000 for staying here.

[suicyco maniac]

> that a safety 25,000 Dollar/year is better, than an
> expected win by BJ of 40,000 Dollar\year.

......You should make a lot more then 40K a year playing BJ

[HALVESX2]

40K+ per year in profit for BJ is only an expected value and that comes along with risks.
if you can get 20K+ per year not playing BJ, assuming its all legally written down and that ur partner will pay u for sure, or have ur partner paying u unfront. then it is a certain choice to go with the 20K.
use ur free time to get a part time job which u will enjoy.
u will end up making 40K+ a year with no risk !!!!

[John May]

> Unbelievable that such a thing could exist. Current
> risk-free rate is about 5%-5.50% annually. Getting 25%
> as a "safety" investment makes no sense to
> me.

> I'd take the 25%, if such a thing were possible. The
> certainty equivalent for BJ, depending on many
> factors, none of which are enunciated here, is around
> 50%, meaning that a certain $25,000 would be
> preferable to a risky $40,000.

> Don

I thought I would unwisely chip in here because I've spent a lot of my career and wasted hundreds of thousands of dollars in lost EV on finding the holy grail of risk-free investment.

All things being correct and equal, as Don says, go for the risk-free investment. If it were truly risk-free, in addition to the CE divisor, you are not tieing up your time in a casino.
You can probably do something profitable with that time in addition to your investment returns.

However, and I can't emphasize this strongly enough, there is no such thing as 25% guaranteed return. There is always a risk. Bear in mind I have enormous faith in the power of creative advantage play techniques in the gambling and investment worlds, much more so than any one else here, and what is possible. If I tell you it is impossible, you can bet your life no one else believes it is possible.

For example, take sports arbitrage. When online bookmakers started proliferating and errant lines became the norm, it seemed like there was an opportunity for risk-free returns beyond imagination. The reality was much more sober-you have major problems getting enough money down due to execution risk (eg the lines move against you, one bookmaker has a different policy regarding cancellations, some fold and take your cash, and so on (and on, and on...) potentially leaving you with huge liabilities tied up with one half of your bankroll. Some can deal with these problems and make a profit but it takes a lot of work-and the actual risks involved are very far indeed from zero. This is just one example, I don't know all the potential problems from such schemes, I just know a few hundred...

Nevertheless I do have a ridiculous amount of experience with apparently riskless high yield investment opportunities and I can probably tell you what the catch is, if you can comment on the matter obliquely enough to tell me what the op is without exposing any potential value to be had. Via e-mail if you prefer. I promise not to use anything you tell me.