On casinos, roulette, and gambling while studying about the #stockmarket market and being reminded of my father:
I’ve been studying how to move from #speculation to real #investing and read a curiosity that reminded me of my father.
My father, who at his peak was a reasonably wealthy man by the 1980s, 1990s standards, loved to visit Casinos. He never played, though, he went to study them. His business was horse racing bets and he came to learn from those with larger operations than his.
I recall going three times with him, at the time when children were allowed on the floor. The first visit was on board of a cruise and he gave me the equivalent of 20 USD to play in the roulette. I doubled my bet. He then asked me to stand up and we left with my 40 USD and a big smile. But I wanted to play again. The second time, months later, we repeated the process but he said nothing after my first small win. I lost all of the 20 USD. The third time we went to watch while enjoying the free drinks.
“The house always wins, always”, he said. “and only fools bet against the house. They treat you with respect, give you bright lights, free drinks, beautiful people, smiles and peanuts so that you stay longer, because the longer you stay, the more they win. If you ever come again in a place like this, come to learn, never to play”.
While reading today on investing vs speculation, I found this curiosity about the Roulette.
“In the Roulette, most wheels include 0 and 00 along with numbers 1 through 36, for a total of 38 slots. The casino offers a maximum payout of 35 to 1. What if you bet $1 on every number? Since only one slot can be the one into which the ball drops, you would win $35 on that slot, but lose $1 on each of your other 37 slots, for a net loss of $2. That $2 difference (or a 5.26% spread on your total $38 bet) is the casino’s “house advantage,” ensuring that, in average, and unless they leave the floor right after winning, roulette players will always lose more than they win. Just as it is in the roulette player’s interest to bet as seldom as possible, it is in the casino’s interest to keep the roulette wheel spinning”.
Dad didn’t put it in such technical terms, but his summary was right after all.
Photo is of the #casino of Montecarlo, a nice building to look at from the outside :)
