Thread: It occurs to me that ...

1. Did you find this post helpful? Yes | No
Originally Posted by moses
I'm thinking Freighter would go find some more pu**y?
It would need to be conscentual - purposeful spelling error

2. Did you find this post helpful? Yes | No

That may depend on (her) gross tonnage.

3. Did you find this post helpful? Yes | No
Originally Posted by Freightman
With multiple kicks at the cat, and with more and more kicks at the cat, your correct answers are proper. However, with only 1 kick at the cat, what would the risk averse person do?
I suppose I should have given the background of this experiment.

In March, 1979, two Israeli psychologists published an article that rocked the field of economics. Previously, economists assumed that humans were, for the most part, rational beings who weighed value and probability to maximize their "utility." The two psychologists suggested that this was not just overly simplistic, but was simply wrong. Humans were not always rational. In fact, they were predictably irrational. Instead of deliberating within the laws of logic, people consistently use mental shortcuts, or "heuristics," which lead to systematic biases in how we make decisions under uncertainty.

In their famous paper, these two psychologists, Daniel Kahneman and Amos Tversky, proposed an alternative framework to model human decision-making, which they called "prospect theory." They focused on choices involving uncertainty, some between two possible financial gains, and others between two possible losses. As they wrote, for example, consider which of the following, A or B, would you prefer? Option A involves an 80% chance you win \$4,000, but a 20% chance you win nothing. Option B guarantees you win \$3,000 for sure.

If you're like the majority of participants in their study, you chose B. When it comes to gaining stuff, you prefer certainty over risk-taking, even if the expected value (e.g., value times probability) of the gamble is slightly higher. Now, consider you were at risk to lose money. Which of the following options, C or D, would you prefer? Option C involves an 80% chance you lose \$4,000, but a 20% chance you lose nothing. Option D guarantees you will lose \$3,000 for sure.

Although the amount of the losses and gains are the same, like the majority of people, you likely now chose C. Contrary to classical economic theory, our preferences aren't always so consistent: when it comes to losing we prefer risk-taking, but when it comes to winning we prefer certainty.

The original paper has since been cited almost 9,000 times, and Kahenman later won the nobel prize in 2002 for bridging the gap between economics and psychology (Tversky had died of cancer before the award was officially anounced). It also helped spur a tsunami of research, as psychologists and economists worked to elucidate the many other biases in everyday decision making. Today, almost 200 cognitive biases, fallacies, heuristics, effects, and illusions have been elucidated, comprising a whole new sub-field of psychology (which economists call "behavioral economics").

Still, many interesting questions remain in the field. For instance, between the negativity bias, optimism bias, overconfidence, and underconfidence, we tend to have a somewhat distorted view of ourselves. Whereas these biases at times can be useful, recentresearch shows that accurate self-knowledge is important for the quality of relationships. In what other situations is accurate self-perception important? And how can we improve accuracy when we want it?

In addition, although the hot hand fallacy has been studied extensively in sports (i.e., basketball players, for the most part, don't actually get "hot," we just mistakenly see patterns in randomness, particularly when it comes to streaks), few researchers have looked at how a sense of hot or cold hand, or momentum bias, may transfer across different activities or domains. In particular, after a streak of good or bad random events, to what extent do we develop an illusion of self-efficacy or a more generalized hot or cold hand beyond the change in our emotions? And what is stronger, the hot hand or the cold hand fallacy?

It would be an understatement to say that blackjack is a volatile undertaking. It takes so much trust and self-control. While the stock market is volatile at times, it is more "passive" from most people's point of view. They just "buy it and forget it." With blackjack, it is "active." An AP may have to helplessly watch as their bankroll diminishes week after week in a sudden turn of variance. Self-control is paramount in this situation. They must stick to the plan.
This is why one of my favorite investing weapons is the Married Put (hence my username). I like knowing that my potential gain is infinite while my potential loss is limited. After all, the only thing that I can 100% control in the stock market is how much I can potentially lose. I therefore like choosing investing instruments that give me this option.
I know that you are a smart guy Freightman, so all of this is probably pretty obvious to you. Hopefully my comments will help other readers out there as well though, lurkers included.
To answer your question though, I think it all comes down to preference. If it were a one-time choice, I would still go for the \$4,000 win and the \$3,000 loss, but that is just me. I like those odds. It would satisfy the part of me that wants to "gamble" while still giving me justification for my choice by knowing that I am still making the correct mathematical decision. However, would I still make the same decision if I added one, two, or more zeros to those numbers? Hmmm.....THAT question is even more fun!

4. Did you find this post helpful? Yes | No
true, as in playing stocks, one golden rule.....it takes money to make money. what i need to get over (@64 years young) is that it doesent bother me as much to lose,...we'll say a goodly amt. tinkering with equities, but it bugs the shit out of me to lose 4/500 at bj.

5. Did you find this post helpful? Yes | No
Originally Posted by fiddler
true, as in playing stocks, one golden rule.....it takes money to make money. what i need to get over (@64 years young) is that it doesent bother me as much to lose,...we'll say a goodly amt. tinkering with equities, but it bugs the shit out of me to lose 4/500 at bj.
The Older you get, and assuming one has been diligent in the accumulation of money for retirement, the Less the need or want for excessive risk. The mix if my retirement funds are in light to medium light risk funds, with approx 10% in medium risk. So, with reference to Married Putters very interesting post, the educated person, may well choose the lower return scenarios simply because excessive risk for higher return is not needed.

I suppose the same philosophies could be intelligently directed towards AP activity. Interesting topic - maybe someone will start a thread on it.

6. Did you find this post helpful? Yes | No
Originally Posted by marriedputter
Option A involves an 80% chance you win \$4,000, but a 20% chance you win nothing. Option B guarantees you win \$3,000 for sure
.80X4,000=3,200
1. X3,000=3,000

Difference 200

Would I take a 20% chance of losing it all for a measly \$ 200?

If this was a 1 time deal, I would not. If it was a continuing bet, I would.

7. Did you find this post helpful? Yes | No
Originally Posted by Freightman
So, with reference to Married Putters very interesting post, the educated person, may well choose the lower return scenarios simply because excessive risk for higher return is not needed.
Which is why those close to retirement put more and more money in US Treasuries. Woe to those who had most of their life savings in the stock market as they were approaching retirement in 2008.
Let's play with these numbers more, shall we? If instead of numbers like \$4,000 and \$3,000, let's say we were talking about \$4 and \$3. If it were a one-time offer, you'd probably just go for winning the \$4. But if it were \$4,000,000 vs. \$3,000,000, I too would take the \$3,000,000 because that is all that I would need. I wouldn't even need to play the "long-run" game anymore.
Certainly there can come a time when percentages and odds don't matter anymore. If a big payout is all you need, and the one-time offer covers it, go for the sure thing.

Ever see Brewster's Millions? I probably would have taken the million.

8. Did you find this post helpful? Yes | No
Originally Posted by Bodarc
.80X4,000=3,200
1. X3,000=3,000

Difference 200

Would I take a 20% chance of losing it all for a measly \$ 200?

If this was a 1 time deal, I would not. If it was a continuing bet, I would.
I still would because the \$1000 difference is just not that much to me. I would go for the \$4,000. If it were \$4,000,000 vs. \$3,000,000 though, we would be in agreement.

9. 1 out of 1 members found this post helpful. Did you find this post helpful? Yes | No
I don't understand the point of this thread. I hate the implication that an AP doesn't care if he loses his entire bankroll, so long as he had +EV! It's so trite and wrong. I don't care about +EV, I care about actual results. I know there are some people who track their EV--which makes no sense to me. Why? Stats junkie? EV is a math tool used to achieve those positive results. Just like any ploppy, I'd take luck any day. Unfortunately, I have the knowledge that luck has a way of evening out and not actually existing, unless you wanna equate luck with variance.

I've never noticed an attachment to money being an actual handicap to a newbie. It's thinking card counting is a get-rich-quick scheme--that's the handicap. They have a \$200 bankroll and they bet \$70 per hand, and they don't think perfect basic strategy is important enough to learn because the counting part is what's important. I'd say not being attached enough to the money they have is a handicap. It takes discipline and patience. And that's what the newbie lacks. All these sucky non-"AP's" don't lose money to the casino because they are too attached to their money--it's because they read a paragraph in a book about card counting and pissed away a bunch of their money for no good reason.

10. 1 out of 1 members found this post helpful. Did you find this post helpful? Yes | No
Originally Posted by Boz
I know there are some people who track their EV--which makes no sense to me. Why? Stats junkie?
There are lots of reasons. Here are some of the best:
1) To know how close your results are tracking to EV.
2) Tracking how good a day you had concerning wonging etc. All you can do is maximize EV and hope for the best. If you log a low EV consistently you should consider changing your approach to the game.
3) Errors in your play can be flagged by consistently coming in below EV.

That being said playing in the casino has constantly changing dynamics that the sim will never accurately represent. You have varying pen by dealer. Players jumping in and out of the shoe. You have heat considerations. You have game speed considerations. You have dealer error considerations. When wonging out these things are considered but also table availability number of cards left in the shoe. If leaving the casino is the option how far to the next game if your aren't calling it a day. Then you have varying opportunities and table betting restrictions based on time of day and casino procedures like opening new tables and changing cards. They are all dynamic situations with some benefits that can be planned for if you know the casino procedural rhythms and player tends. You can do your best but can't plan accurately knowing all this. You make your best plans to get the best of what you are looking for and make daily adjustments according to what you actually find that day. Such a changing dynamic environment can never be simmed accurately. I sim what I can accurately and if I use my ability to try to maximize adjusting to the dynamics of playing in the casino I know the sim results will be conservative.

So factoring in the dynamics of actual casino play, the plusses of tracking EV get watered down a lot.

Page 2 of 6 First 1234 ... Last

Posting Permissions

• You may not post new threads
• You may not post replies
• You may not post attachments
• You may not edit your posts
•