Roulette 20/100 Flaw - Fund Management

Math Professor
Posted 03/20/06 at 05:32 PM
John Patrick's forum board

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Someone quoted John Patrick as saying I don't win much but I don't lose much either.
Now he was critical of this statement but there is a reason for it.
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We who have lived with gambling all our lives understand the relationship between what we win and what we lose.
The Equation is simple enough .
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Magnitude of profit is usually a function of magnitude of wagering.
One of the most common failures in gambling is progressive betting.
Several small wins are satisfying but when the next small win does not happen and it turns into a progression which often recovers the day but sometimes results in ruination.
Giving up on a progression is hard because losing can mean the erosion of several days work.
The gambling flaw is inherent in this.
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Christopher Pawlicki highlighted this fact.
The equation for winning small returns often calls for a progression .
The progression ultimately however snatches away the prevous wins.
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For example 20 + 20 +20 +20 +20 has been achieved with 50 + 100 + 80 + 120 + 100 The final destructive act is a 100 that does not recover .Even without a progression 100 absorbs the 5 sets of 20 + wins.
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I call this the 20/100 flaw.
20 is therefore 20% of 100. A good result by any standards.
In order to control the erosion of previous wins the ratio of win to wager
needs to be as close to parity as possible.
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Say 80 + 80 +80 +80 + 80 with 100 + 100 + 100 + 100 + 100
If the 100 goes then we still have nearly 4 days work intact.
We can walk away and get them again another day.
Not many gamblers can achieve 80%.
This is the flaw.
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There must be plenty of gamblers here who understand this but any replies should be better than 3 and out .
The math does not work.
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I am not quite sure what you are saying.

 

Bottom line is that NO progession scheme will prevail in the end.