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Edited by Iti9 at 25-12-2023 01:42 PM
DB stands for "Definite Bust," which refers to the situation where there is a reasonable expectation of average loss. Investment, on the other hand, refers to actions where there is a reasonable expectation of average profit. The text explains that buying lottery tickets or investing in stocks can result in both gains and losses, and the outcome does not determine whether it's DB or an investment. For example, buying lottery tickets is often associated with an average expected loss because of the odds, while investing in stocks is generally expected to yield long-term gains due to economic growth.
The text emphasizes that the approach and principles for DB and investment are different. DB involves concentrating risk to increase the chances of winning, even though the odds are still less than fifty percent. In contrast, investment involves diversifying risk over time to achieve long-term profits with lower risk. The attitude and approach differ, leading to significantly different outcomes.
For instance, if you have a $10,000 gambling bankroll to face a negative two percent gambling opportunity, focusing on a single bet offers a 49% chance to win $10,000 and a 51% chance to lose $10,000. However, if you spread it into ten bets of $1,000 each, the average loss after ten bets would only be $200 per bet, and your chances of winning overall increase to 40%.
The text suggests that DB should not involve diversifying bets, while investment should. It highlights the importance of understanding whether you are engaging in DB or investment, as it affects your betting strategy (concentrated or diversified), which ultimately influences the results.
In most cases, statistical studies have shown that card counting in blackjack can lead to average profits, making blackjack more like an investment. Therefore, it's recommended to diversify risk (using the Kelly criterion) based on expected profit rates when betting on blackjack. |
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Post time 12-9-2023 20:41:57