Some people think that gambling is about math. I suppose it is to a great degree, but it is really just a part of life, which is all about math too. Virtually every decision we make in life is based on mathematical principles, probabilities and possible outcomes. If you choose not to brush your teeth for a year, you’re very likely to wind up with some sort of problem, so why would anyone choose to do this? At the same time, if you can skip brushing your teeth one night because you’re exhausted the consequences are not likely to be as bad.
If you go to one of those quick oil-change places, they’ll probably put a sticker on your car that tells you to get your next oil change in 3,000 miles. If you go through your owner’s manual, it might say 3,000 miles also, or it might say as much as 6,000 or 7,500 miles. I’ve been known to wait on the longer side. I usually try to get it in by 6,000 or 7,000 miles, but I’ve gone as many 10-12,000 miles between oil changes. I’ve never had a problem with my car, so I guess I’m doing the right thing?
The reality is the answer is probably no, that I’m not doing the right thing. By waiting as long as I do, the risk of having engine problems goes up. It does NOT mean that I will definitely have engine problems the second I go past 6,000 miles.
But in reality, I’m performing a very complex math calculation in my head that takes into account the risks of waiting (engine failure), the rewards of waiting (my time, pushing off an expense), the risks of not waiting (wasting money?) and the rewards of not waiting (better gas mileage, less likely to have engine trouble). I throw all of that into the mix and decide what to do.
Life is simply one big casino game of weighing the probabilities against the outcomes.
By comparison, real casino games are very easy. First of all, everything is known. I don’t have to guess at the risk and rewards. Because we start with something very simple, like a deck of cards, I know the probability of every possible outcome.
Occasionally, depending on the complexity of the game, we use close approximations, but these are still not guesses. Thus, every move we make in a casino is no different than the decisions we make in life. We take all the probabilities of all the possible outcomes of all our possible decisions and determine mathematically which is the best decision for us to make. This is a WEE bit easier than trying to figure out who you should marry!
Just as in life, there are no certainties for any single decision. Your car won’t cease to run because you hit mile 6,001 and you won’t wind definitely win more because you gave up a Pair of Aces to go for the 4-card Royal. Yet, just as you know that if you keep pushing your car by neglecting to make the right decision, you will pay the price, so too if you repeatedly choose to make the wrong decision in the casino.
We play the probabilities every day in life, with the rewards frequently coming over a period of time. We should use this lesson when we step into the casino as well.
Watch every Tuesday for a brand new Winning Strategies article.
Question? Comment? E-mail me at: Elliot Frome