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Thread: Why the rule that the dealer stands on a hard 17?

  1. #53


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    Quote Originally Posted by 21forme View Post
    He's already on the east side.
    Yes, I know that much, his doorman in front of the building has his own in-ground pool.

  2. #54


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    Quote Originally Posted by BoSox View Post
    Are the Real Vol - A suite of realized volatility indices and instruments, and the Real Globe - listed Country equity indices types of Fund investments? Or is all your products going to be directed only for traders?
    All the products will eventually be available to both retail customers and industry professionals. Bottom line: anyone will be able to invest in the products.

    Don

  3. #55


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    Quote Originally Posted by DSchles View Post
    Just one more thing. Read this carefully to understand what Thorp did: https://en.wikipedia.org/wiki/Statistical_arbitrage

    It has nothing to do with "investing." The PDT group at Morgan Stanley, mentioned in the article, was managed by Peter Muller, a very good friend of mine, whose office was right next to mine. And pairs trading was started at the firm by Nunzio Tartaglia, whose assistant was the Gerry Bamberger whom you will read about in Thorp's book (starting on page 237). I knew all of these people very well, as they were all my colleagues at MS.

    When you do thousands upon thousands of trades a day, whose average life span is a couple of seconds (!), that isn't "investing in the stock market." So, when you say that you don't understand why Thorp likened stat arb to what he did in blackjack, you demonstrate a fundamental misunderstanding of the endeavor.

    Don
    Don,

    Thanks for your follow up reply and the link to what to Statistical arbitrage is. The last two days I’ve spent quite a bit of time researching this topic, along with Black-Scholes and related subjects. While I will never totally understand all the math behind it, I do understand what it’s doing. I’ve also spent time doing more research on Thorp and I stand by my comments that Thorp is incorrect in trying to relate bj to what he was doing in the stock market. One is basically a math puzzle (bj) that will NOT change based on any future events (planned or catastrophic). The other (stock market) is dynamic and cannot be predicted by math, regardless of what Thorp or Wall Street thinks.

    With this said, since our markets are some of the most stable in the world, math can and is used to try to predict the future. But this math will only work under stable market conditions, which do occur over extended periods of time. Yes, Thorp was successful in the market, but this was in “the short run” (10 years is the “short run” in the history of our markets) and during this time there was no catastrophic event. In “the long run” these events will happen. Note that Thorp (by his own admission) lost “a significant” amount of money in 2008, so his investment system isn’t bullet proof.

    In researching Black-Scholes, I found the following article that shows all the assumptions that go into it.


    https://www.investopedia.com/articles/active-trading/041015/how-circumvent-limitations-blackscholes-model.asp


    In any market (even a relatively stable one like ours), these assumptions will inevitably fail at some time, and when that happens watch out if you’re invested in one of these hedge funds using these strategies.

    I get that Thorp is “a trader” (some would call this being “a speculator”) and not “an investor” in the market…but the underlining vehicles he’s trading are tied to stocks, which people invest in and change based on future unpredictable events.


    The following interview with Thorp and Scott Patterson (author of “The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It.”) illustrates my point better, and shows several inconsistencies in Thorp’s comments. People need to read it carefully to pick them up.


    https://www.npr.org/templates/transcript/transcript.php?storyId=123209339


    Here’s only one example (there are several more). Thorp said: “Just like in this last crash, you know something bad is going to happen, you just don’t know when or how.”

    My comments: Well if that’s the case then doesn’t that mean models can’t be used to predict the future of the stock market? Doesn’t that mean the stock market is nothing like blackjack, where math can be used to predict the probability of something happening in the future. Said another way, an outside unpredictable event won't impact the math behind blackjack.


    Here’s another quote from Thorp when asked about his model and the financial collapse in 2008: “Well, the problem is that the people using these methods and models didn’t use them correctly.”


    This is the usual excuse from people who’ve develop something and it doesn't work all the time…it’s never the model’s problem; it’s the way the model was used.


    Btw, Scott Patterson also makes several inconsistent statements in this interview that I won’t go into here. I’ve still ordered Scott Patterson’s book and look forward to reading it.


    But Patterson does make an excellent point I’ve made before. Patterson’s comments: “And if you lose the money, then it’s not your problem. It's the taxpayers' problem. And that's a huge systemic issue that we have that everybody today is trying to come to grips with.” Basically, what he’s saying is the big Wall Street hot shots are gambling with our money. If they win with their huge leveraged bets, they win millions; if they lose, us tax payers bail them out. That’s a great gig! How do I sign up for that? That’s kind of like a loss rebate program at casinos.


    This quote by Thorp tipped me off he didn’t understand the stock market's purpose: “And the biggest casino in the world appeared to me to be Wall Street.” I get some on Wall Street view the market this way, but this is not what the stock market is about or why it was formed. As we've discussed, any market, including the tullip market in the 1600s, can be used by speculators. And when speculators come into the market, it usually doesn't end well.


    Btw, Thorp and your credentials are very impressive, much more so than mine. While I don’t have the math background you or Thorp have, I expect I have a much better overall science background than either one of you. I give lectures at Universities on a fairly controversially topic I won’t mention here and get heckled and called names (even by professors) so I’m used to the name calling. I’ve found when people call me names, it’s usually because they don’t have a good counter argument to the points I’m making.


    I want you to know that just because Thorp is wrong on this topic, it doesn’t mean he’s not smart. In my lectures, I point out how smart people can make very stupid mistakes. An example is Einstein and his “cosmological constant”, which he called his “greatest blunder”. Common sense should have told Einstein this made no sense.


    I’m not trying to “dazzle” you with my knowledge on this subject. That is not my intent. These subjects fascinate me, and I enjoy a good debate. Free speech and a sharing of ideas is what made our country great!


    If you think our debates are high level, you should see the ones I have with my nephew who has a PhD from Stanford in Particle Physics. He’s currently working at CERN, the largest particle physics lab in the world. This isn’t my area of expertise and I don’t have the math background like my nephew, but I do know (based on common sense) that a lot of the assumptions these Particle Physicists are making are wrong. For example, String Theory is one of the dumbest things that have come out of our universities. I’ll leave that debate for another day. Lol


    Last edited by Dbs6582; 01-17-2019 at 03:52 PM.

  4. #56
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    1 out of 1 members found this post helpful. Did you find this post helpful? Yes | No
    ZZZZZZZzzzzzzzzzZZZZZZZZZZZZZZZZZzzzzzzzzzzzzZzzzz zzZZZZZZZ......

  5. #57


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    Quote Originally Posted by Sharky View Post
    ZZZZZZZzzzzzzzzzZZZZZZZZZZZZZZZZZzzzzzzzzzzzzZzzzz zzZZZZZZZ......
    Quote Originally Posted by Dbs6582 View Post
    I give lectures at Universities on a fairly controversially topic I won’t mention here and get heckled and called names (even by professors) so I’m used to the name calling.
    Sharky, what you do not like listening to Elmer Fudd?

    "

  6. #58


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    Dbs,
    If you haven't already, you sound as if you might enjoy "Fooled by Randomness" et al, by Nassim Taleb.

    Best,
    SiMi

  7. #59


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    Quote Originally Posted by SiMi View Post
    Dbs,
    If you haven't already, you sound as if you might enjoy "Fooled by Randomness" et al, by Nassim Taleb.

    Best,
    SiMi
    SiMi, thanks for the tip. I’ve ordered it and it’s on my reading list. This definitely sounds like a book I’ll enjoy reading.

  8. #60


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    Dbs6582, this site is mostly a blackjack site, and I was wondering how you did on blackjack this past year. Did you have a winning year? Did you answer the poll question? I hope you don't feel guilty if you won a few bucks at the casino. I'm sure the government won't miss the few bucks in tax income you caused by reducing the casino's profit.

  9. #61


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    Quote Originally Posted by Midwest Player View Post
    Dbs6582, this site is mostly a blackjack site, and I was wondering how you did on blackjack this past year. Did you have a winning year? Did you answer the poll question? I hope you don't feel guilty if you won a few bucks at the casino. I'm sure the government won't miss the few bucks in tax income you caused by reducing the casino's profit.
    Midwest Player, yes I had a winning year. I’ve said that a couple times on this forum. I think I answered your poll question...but I’m not sure since you have so many polls. Believe it or not, your polls are not the most important thing in my life. Lol

    Yes, I do feel a little guilty when I win money from my local casinos. I’ve said this on this forum many times. I’m surprised you missed it. I’m currently living in one of the poorest states in our union and our local casinos are kind of like the local bar, where the community comes together to enjoy a little gambling, music and social interaction. Since I feel a little guilty winning money in these casinos, I usually try to be one of the biggest tippers to give back a little to the community. I know it’s not much, but it makes me feel better, and it definitely makes me more liked at the casinos, and with the dealers and waitresses.

    The situation is different when I visit larger casinos in larger states. I know this isn’t being totally consistent, but the reality is I don’t feel bad when I extract money from a larger casino. When I lived on the east coast, I never felt guilty taking money from Foxwood or MS but I also didn’t play there much because I didn’t care for these big impersonal casinos.

    When I go to casinos, my objectives are a little different than most APs. For me, it’s about more than just winning money. I like the entertainment, and interaction with the locals. As Zee has said, it allows me to interact with people I wouldn't normally interact with at my job. Casinos are a way for me decompress after a busy week at work.

    I can tell some of my comments have struck a nerve in you. Sorry about that. The reason I brought this up is to point out the real reason states have legalized casinos (casinos didn’t just pop up on their own). It’s to raise revenue for the State. They are now legal in 42 States, and I expect in the future all 50 states will legalize them. They aren’t legal in Texas yet and It’s causing Texas to lose a lot of revenue to neighboring states, where huge casinos have been built just over the Texas state line to take advantage of the Texas market. Texas has a lottery so it’s just a matter of time before they legalize casinos.

    Rather than thinking of taking money from a casino, an AP should remember what they’re really doing is taking money from the state and local governments. Basically, what we’ve done is discovered a loophole in the govenrment’s voluntary tax program. There’s nothing wrong with that and it’s legal, but we shouldn’t have any delusions we’re doing anything great by taking money from a casinos. Hope that point didn’t pop your bubble that you were on some great moral crusade by taking money from casinos.

  10. #62
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    I personally hate casinos. It's an entire industry that has been built on addiction & exploitation of the suffering of addicts. I could care less for any argument regarding alleged "good" that comes from the evil empire. If the industry was forced to offer FAIR games and not allowed to ban better players than themselves it might be different. Even though I see that Indian casinos help their communities and serve as a form of reparations it doesn't invalidate my point. Casinos in general are ripping people off and capitalizing on sick people's disease. They will allow people to play who are a sip away from alcohol poisoning, too mentally incompetent to comprehend the games themselves, too old and decrepit to pull the lever, or otherwise incapacitated but let an individual BEAT them at their games and they respond like the abusers they are and do everything they can get away with to take revenge. This is a subject I will never tire of attacking and YES I DO feel as if I'm doing a little good by taking away from the great Satan. Lol.

  11. #63


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    Quote Originally Posted by Dbs6582 View Post
    I can tell some of my comments have struck a nerve in you. Sorry about that. The reason I brought this up is to point out the real reason states have legalized casinos (casinos didn’t just pop up on their own). It’s to raise revenue for the State.

    I think I answered your poll question...but I’m not sure since you have so many polls.

    Oh, you are so wrong on this! The main reason casinos exist is because the public wants them. Revenue for governments is a secondary objective. Casinos along with many other forms of entertainment are things the public wants. Will spending a night going out bowling put a loaf of bread on your table? Will spending money for a concert put a loaf of bread on your table? How about spending hundreds of dollars to see an NFL football game? Yeah, it will put a loaf of bread on the table for those who have jobs at these entertainment events, but otherwise you money is spent. Remember, "man shall not live by bread alone." The public wants entertainment venues and that is why they exist.

    By the way, if you can't remember answering the poll, I suggest you go and look at the poll. The choice you picked will be in italics.

  12. #64


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    Quote Originally Posted by Midwest Player View Post
    The main reason casinos exist is because the public wants them. Revenue for governments is a secondary objective.
    Truth.

    Frankly, I feel like the "government revenue" is/was a straw argument to make gambling more palatable to the teetotalers.

    They are not a fair enterprise. They claim to offer a game of chance, but the minute you figure out how to beat that game of "chance", you are persona non grata. If it was really a fair game of chance, why would you bar the winners? Surely you thought there would be a winner, right?

    But you are 100% correct, casinos exist because people want them to exist.

  13. #65


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    Quote Originally Posted by Midwest Player View Post
    Oh, you are so wrong on this! The main reason casinos exist is because the public wants them. Revenue for governments is a secondary objective. Casinos along with many other forms of entertainment are things the public wants. Will spending a night going out bowling put a loaf of bread on your table? Will spending money for a concert put a loaf of bread on your table? How about spending hundreds of dollars to see an NFL football game? Yeah, it will put a loaf of bread on the table for those who have jobs at these entertainment events, but otherwise you money is spent. Remember, "man shall not live by bread alone." The public wants entertainment venues and that is why they exist.
    Midwest Player, you are completely wrong on this topic. Yes, the public enjoys gambling but that is not why they were legalized. Do you think it’s a coincidence that casinos were legalized the same year the Hoover Dam project started? Both happened in 1931. This was after the depression and the govenrment needed a way to raise revenue to build the dam. I don’t know if you’ve seen the Hoover Dam but it’s pretty big and it took a lot of money to build. Do you think no one enjoyed gambling prior to 1931? And that magically everybody all of sudden got an urge to gamble that year?

    There are other reason casinos were restricted to Nevada early in our history, but my point is their main function was to raise revenue for the State. Of course people like to gamble. That has always been the case. Gambling has been in our country since it’s inception (prior to legalization, New Orleans was the hot bed for illegal gambling), but what brought about legalization is a changing moral climate and a need for more revenue for the State. It’s an easy way to raise revenue without imposing more mandatory taxes on its citizens.

    In 1977, New Jersey leaglaized casinos for the same reason. They saw the success Nevada had and wanted to revitalized Altantic City, a depressed city at the time. And they saw it as a way to raise more revenue for the state.

    Each state has followed suit, one by one, legalizing gambling (lotteries and casinos) for this sole reason...to generate revenue for the state without having to increase taxes.

    Heres a a little tip. When politicians raise taxes, they get voted out of office. So they go the voluntary tax route, and legalize lotteries and casinos.

    When you go to a casino, you should really think of them as government voluntary tax centers operated by private business, because at the core that’s what they are. The reason I call them voluntary tax centers is because someone doesn’t go to jail if they don’t want to participate in this program. Our government also has a mandatory tax program (its called the IRS) and if you don’t participate in this one you will go to jail. Lol.

    Please do some research on the internet on this topic and you’ll see I’m right. Again, the main reason casinos have become legalized in our country is to raise revenue for the state. Conservative states, like Texas, still haven’t legalized them (even though their citizens love to gamble) because they know casinos are basically a regressive tax, and can destroy lives.

    As we all know, there are people in our society (the weaker members) who love voluntary tax centers (casinos) and they stay in them until they go bankrupt. It’s great that they enjoy paying all this tax, but it’s not good for society to have a bunch of bankrupt and homeless people around.

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