Gambling or Investing is about Odds & Probability

I was watching this movie, The Best Bet in Astro Wah Lai Toi channel the other day, and the villagers are betting whether the main actor, Hor Yi ( played by Michael Tse Tin Wah) would stop gambling or not (since his whole life he have been gambling). The odds are as below:

A) If Hor Yi continues to gamble : Bet 1, Win 1
B) If Hor Yi stops gambling : Bet 1, Win 10

A Gambler might choose either one to bet, which gives him chance of winning, as well as losing. However, given this kind of "odds", there is a risk-free betting. Infact, with a simple tweaking, it becomes a sure win for your bet (regardless of the outcome).

If a person bets RM 1 on both outcome A and B, then that person can't lose. Either he break-even if Hor Yi continues to gamble, or he wins RM 9 (Win RM 10, but lose RM 1 on the other bet) if Hor Yi stops gambling.

Now, if that person changes his bet to

• Bet RM 5.5 on outcome A above, and
• Bet RM 1 on outcome B above

The person who bets the way above would 100% win RM 4.5 (from a total investment of RM 6.5) regardless of the outcome (either Hor Yi wins, or Hor Yi losses). This is no longer gambling (or speculating). But it's investing, as long as the person whom you're betting is credible to pay the claims.

My mother used to say that anything that involve winning or losing is gambling. Looking back, I've realised that her statement is very true indeed (though i'm not sure she knows the distinction between investment and speculation when she said that statement). A person who invest the right way, would only have a win, and can't lose (over the long term).

Take for example the Owner of a casino. At a particular table at a particular round, the Banker might lose. However, played over enough rounds, the Banker will almost guarantee themself to a win. Infact, i don't think Genting's Casino ever lose money in their Casino business at any single year (though i can't say the same thing when it comes to days or hours).

Similar post is in the Movie 21 here.

21 (Movie by Columbia Pictures)

I've watched this movie yesterday morning after reading they synopsis. I got hooked to the synopsis that i can't wait to watch it with my wife. I had to drag her out from the bedroom because she enjoys sleeping in the morning, while i enjoy taking afternoon nap. :-)

The true story of the very brightest young minds in the country - and how they took Vegas for millions. Ben Campbell is a shy, brilliant M.I.T. student who -- needing to pay school tuition -- finds the answers in the cards. He is recruited to join a group of the school's most gifted students that heads to Vegas every weekend armed with fake identities and the know-how to turn the odds at blackjack in their favor. With unorthodox math professor and stats genius Micky Rosa leading the way, they've cracked the code. By counting cards and employing an intricate system of signals, the team can beat the casinos big time. Seduced by the money, the Vegas lifestyle, and by his smart and sexy teammate, Jill Taylor, Ben begins to push the limits. Though counting cards isn't illegal, the stakes are high, and the challenge becomes not only keeping the numbers straight, but staying one step ahead of the casinos' menacing enforcer: Cole Williams.

It's definitely one of my favourite movies because:

1. This movie is inspired by a True Story
2. It's about brightest minds of students combining their knowledge to beat the Casino
3. Their system of beating the casino deals with Odds and Probability, which is my favourite subject back in the school days.
4. Unlike majority who "Gambles" in casino, they "Invest". Over a long term, they can't lose.
5. They use their Talent to make money.

Download the movie in Tvfreeload.com's Forum
(need a free registration before being able to view the links)

Read more about Card Counting in Blackjack : http://www.squidoo.com/how-to-count-cards (it's written by a math teacher)

Will i try to do Card Counting (In Blackjack) to beat the Dealer?
I don't think so. I rather keep to Valuing Public Listed Companies and "trade" with anonymous people. At least, nobody knows the who they are trading with in Stocks.

I might write about the similarities of their system with Investing (in Common Stocks), if there is enough demand for it.