0549 - Pick20

Pick20 [OO #549]

So, at the Kentucky Derby, there was an offer out of a prize of $5 million if anyone could pick the 20 horses entered in order of finish. We asked our Investment Guru (the Revered one, or R.I.G.) to figure it out, and he says the chances are 20 times 19 times 18 times 17 ... or 20 factorial , written 20! On our HP pocket calculator that seems to be 2,432 followed by 15 zeroes. Don't spend your winnings.

A somewhat simpler exercise is figuring out how much gasoline costs in US Dollars in Anguilla, where it sells at EC$7.88 (Eastern Caribbean Dollars) per Imperial Gallon. Let's see ... an Imperial Gallon is 4.546 litres, while (or whilst) a U.S. Gallon is 3.785 liters (or litres). As all know, an US Dollar is 2.6882 EC Dollars. So, divide the cost per Imp Gal by 2.6882 and get US$2.9313 per Imp Gal. Now, an Imp Gal is 4.546 divided by 3.785 or 1.2011 U.S. Gals, so we divide 2.9313 by 1.2011 and get US$2.4406. Not so much worse than the price in the States, is it? And Anguilla is only 13 miles or so long.

In a somewhat similar way, it is possible to look at investing as a mathematical risk/reward exercise, says our Guru, who is fond of using options to adjust risks. No doubt the same analytic tools could be applied to other risks in life. If you live in the Middle East (not the best of choices these days), the risk/reward ratio of throwing rocks at tanks is poor indeed. Indeed, upon analysis, it is just a bad plan wherever you live.

Similarly, in the Iraq mess, there's a fat little Sunni preacher who is agitating his followers to shoot at U.S. soldiers. The idea, if he has one, is to drive out the infidels. These days, the infidels would be more than happy to get their butts out, one would think, but they aren't leaving when there's so much shooting going on, so the gunfire is counterproductive. But then, much of Middle East thinking (as well as thinking about the Middle East is counterproductive – it must be the climate. But we digress.

One might well claim that voting is a risk/reward exercise. The claims are largely false; all candidates claim to be softhearted and caring. Few turn out to be, since they have more urgent business to do. Once elected, they never look back to see if they made a mistake (present U.S. incumbent a notable example). It's like playing poker without checking up at the end of a hand to see who won. Indeed, the OO thinks poker is one of the noblest of games, and would have courses in poker taught in all schools. Poker skills are easily transferred to many occupations, particularly governing. And there sure are a lot of lousy poker players in office, aren't there?

Those who play the noble game of poker well know the type of player who insists on betting his hand without regard to what the other players are doing. This sort of “staying the course” is highly profitable to fellow players, who soon collect the stubborn one's chips. Feel free to apply this observation when looking at the depressing news on CNN. In fact, all the news is depressing, isn't it?

Suppose, instead of holding elections, we had the candidates play poker to see who gets into office. Anyone caught cheating is disqualified. In the States, hundreds of millions of dollars would be saved in campaign costs. Those who were interested would watch the game on TV, just as they watch the World Series of Poker. Self-satisfied prigs like Ralph Nader would be knocked out early, and we'd end up with world-class players. Think of how well our international negotiations would be handled! Deal, we say!

Next time: Advisees [OO #550]

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