Everyone’s a gambler

I am pretty sure of this, so I will try to explain my position. So for a gamble to take place three things must be in place, a stake, an event (or sequence of events) with an uncertain outcome, and a reward or prize.

So if you take this to an extreme, pretty much everything we all do in life is a gamble. If I decide to go out and buy a pizza its a gamble, I am gambling against many things, and one losing situation would be an eagle swooping down and stealing my newly acquired pizza. So I am investing my time and money (the stake), against an uncertain outcome (getting home and eating the pizza), and the reward is that I feel fully satisfied after the consumption of my pizza.

Now this is a great gamble, the probability of an eagle swooping down and stealing my pizza is pretty low. Its not non-existent,  its just highly, highly, improbable.

Now I could take the same extreme view and apply it to almost any action that we take in our lives. Indeed I can apply the same thought process to inactivity, inactivity is itself a gamble.

Here is the thing, its all about the probability of achieving the outcome that we invest our stake in. Lets face it, here in sunny Dublin 4, there is a very high probability that no eagle is going to steal my pizza. This is a gamble I would take again and again. The odds are very strongly in my favor. Its a positive EV (expected value) play.

So here is why I don’t understand people who play casino games against the house. The probability of winning is less than 50%, i.e. over a significant number of ‘plays’ of the game you are going to lose – that’s just a fact. Of course the addiction here is that you can win over a short period.

The difference with poker is that its a 55% game for a skilled player (now the definition of a skilled player is a tough one, and not for here and now). So a skilled player, against lets say an unskilled player will win 55% of the time. Its positive EV.

And here is the really great thing about poker, because the probability is so marginal an unskilled player can beat the most skilled player in the world. But only for so long – the ‘luck factor’ evens out over a significant number of plays and in the end the skilled player will always end up on top.

My point is all of this? Everything that we do in life involves a gamble. If the odds are in your favor its really just a question of how many times you take the risk before you win. One day I will meet that Eagle.

 

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