An argument between Bozza and dwayne...let's settle it

[DJ Leon]

no shit sherlock.



read it again

OK, I'll change my mind now and go for A now.

 

[El Presidente]

If you take the view that Cardiff are red hot certainties not to go down and therefore the £1,000 is as good as money in the bank then the return looks attractive.

However the downside is that you could lose £1,000, so the extra return reflects the risk premium of this potential loss.

 

[dwayne]

If you take the view that Cardiff are red hot certainties not to go down and therefore the £1,000 is as good as money in the bank then the return looks attractive.

However the downside is that you could lose £1,000, so the extra return reflects the risk premium of this potential loss.

Well yes, the risk/reward relationship probably warrants 1/6 the bookies rarely get it wrong.

...but how do you rate Bozzas pa measurement?

 

[looney]

A punter puts a wager on Cardiff to NOT finiah in the bottom 3 at 1/6.

So punter will receive approxamitely a 16% ROI if the bet comes to fruition.

Now which scenario sounds more realistic

A) The bet is over 7 months ...but it is equivalent (on a per annum basis) of getting a return of 28.5% net. So one could compare it favourably to, say, getting 5% interest PA in a savings account.

B) Argument A is fundamentally flawed. This is a one off bet with a yes/no outcome, it is impossible to compare two completely different forms of investment on a different time basis.

*forget income tax*

I won't do a poll

This seems like non arguement and I'll have to get back to you after thinking about it.

They are comparable because the RoR(Rote of return) 28.5%Reflects the greater risk involved, ie the far greater risk of losing all the money. Time scales is irrelavant, also wether they are actuarially fair.

But will need to think more about it.

 

[Dave the OAP]

I have met many rich bookies, but not many rich punters.

Having said that as a one off I assume you take the bet and take your chances...isn't that what betting is all about ( hense I am a boring sod and don't bet)

 

[maffew]

A punter puts a wager on Cardiff to NOT finiah in the bottom 3 at 1/6.

So punter will receive approxamitely a 16% ROI if the bet comes to fruition.

Now which scenario sounds more realistic

A) The bet is over 7 months ...but it is equivalent (on a per annum basis) of getting a return of 28.5% net. So one could compare it favourably to, say, getting 5% interest PA in a savings account.

B) Argument A is fundamentally flawed. This is a one off bet with a yes/no outcome, it is impossible to compare two completely different forms of investment on a different time basis.

*forget income tax*

I won't do a poll

Dont understand why people are yawning at this, interesting question.

What Looney said is correct IMHO, reasonable return:risk

 

[MikeySmall]

All types of investments cover different time periods - its all about calculating the risk....

 

[dwayne]

Re: Re: An argument between Bozza and dwayne...let's settle it

This seems like non arguement and I'll have to get back to you after thinking about it.

They are comparable because the RoR(Rote of return) 28.5%Reflects the greater risk involved, ie the far greater risk of losing all the money. Time scales is irrelavant, also wether they are actuarially fair.

But will need to think more about it.

I think youre missing the point here like many others

at the moment cardiff are 1/6 to finish in the bottom 3 (over 7 months) - approx 16% return

bozza is saying that this is the equivalent of getting 28.5% compounded on a PA basis. I disagree.

bottom line is that if the season was to finish in 12 months instead of 7 the bookies would offer even longer odds ..say 1/9, 1/8.

 

[Trigger]

Settle it in the ring, all procedes to the Dick Knight fund.

 

[maffew]

Re: Re: Re: An argument between Bozza and dwayne...let's settle it

bottom line is that if the season was to finish in 12 months instead of 7 the bookies would offer even longer odds ..say 1/9, 1/8.

er, why would they? The odds would remain the same

 

[dwayne]

Re: Re: Re: Re: An argument between Bozza and dwayne...let's settle it

er, why would they? The odds would remain the same

because it's over a longer time period meaning more scope for the unexpected to happen, but we're getting off the point now though.

 

[maffew]

Re: Re: Re: Re: Re: An argument between Bozza and dwayne...let's settle it

because it's over a longer time period meaning more scope for the unexpected to happen, but we're getting off the point now though.

Yes and also more scope for the expected to happen, they even each other out, the time frame in this example does not affect the probability

 

[Bozza]

Re: Re: Re: An argument between Bozza and dwayne...let's settle it

I think youre missing the point here like many others

at the moment cardiff are 1/6 to finish in the bottom 3 (over 7 months) - approx 16% return

bozza is saying that this is the equivalent of getting 28.5% compounded on a PA basis. I disagree.

No, I'm not. My whole premise was that, for me, Cardiff are certainties not to go down - they are just too good and that betting on them was better than putting money in the bank (and for bank, please read building society and similar).

In order to illustrate this I am saying that a bank would need to offer a 28% interest rate to give an equal return to the Cardiff staying up bet, if it were to match the return at the end of the 7 months, thus:

£1000 on Cardiff to stay up at 1/6 returns £1166.67 when the bet is paid in 7 months time.

£1000 in a 28% interest bearing account for 7 months would return £1000 + (1000*0.28*7/12) = £1163.33 in 7 months time.

(For the sake of simplicity I am ignoring income tax implications on interest and, obviously, not doing anything with compound interest etc)

 

[dwayne]

Re: Re: Re: Re: An argument between Bozza and dwayne...let's settle it

No, I'm not. My whole premise was that, for me, Cardiff are certainties not to go down - they are just too good and that betting on them was better than putting money in the bank (and for bank, please read building society and similar).

In order to illustrate this I am saying that a bank would need to offer a 28% interest rate to give an equal return to the Cardiff staying up bet, if it were to match the return at the end of the 7 months, thus:

£1000 on Cardiff to stay up at 1/6 returns £1166.67 when the bet is paid in 7 months time.

£1000 in a 28% interest bearing account for 7 months would return £1000 + (1000*0.28*7/12) = £1163.33 in 7 months time.

(For the sake of simplicity I am ignoring income tax implications on interest and, obviously, not doing anything with compound interest etc)

ok at least others may put their oar in now that you have responded

this is the statement i disagree with


I am saying that a bank would need to offer a 28% interest rate to give an equal return to the Cardiff staying up bet

 

[Bozza]

Re: Re: Re: Re: Re: An argument between Bozza and dwayne...let's settle it

ok at least others may put their oar in now that you have responded

this is the statement i disagree with


I am saying that a bank would need to offer a 28% interest rate to give an equal return to the Cardiff staying up bet

Maybe we're getting somewhere. Please tell me (using a simplistic interest model free of income tax and compounding interest etc) what annual interest rate a savings account would have to offer to approximately match the 1/6 bet.

 

[dwayne]

Re: Re: Re: Re: Re: Re: An argument between Bozza and dwayne...let's settle it

Maybe we're getting somewhere. Please tell me (using a simplistic interest model free of income tax and compounding interest etc) what annual interest rate a savings account would have to offer to approximately match the 1/6 bet.

16%

because a win/lose bet stays a win/lose bet. You can't compare the two, and that's what ive always maintained

 

[DJ Leon]

Re: Re: Re: Re: Re: An argument between Bozza and dwayne...let's settle it

because it's over a longer time period meaning more scope for the unexpected to happen, but we're getting off the point now though.

Er no, there's more scope for the expected to happen.

If the Premiership was longer then Chelsea would be even more of a favourite to win and Sunderland even more of a favourite to go down.

 

[Hatterlovesbrighton]

Re: Re: Re: Re: Re: Re: Re: An argument between Bozza and dwayne...let's settle it

16%

because a win/lose bet stays a win/lose bet. You can't compare the two, and that's what ive always maintained

That would be right if it was over a year but its not its over 7 months.
The 28% rate is correct over the 7 month period.

 

[dwayne]

Re: Re: Re: Re: Re: Re: Re: Re: An argument between Bozza and dwayne...let's settle it

That would be right if it was over a year but its not its over 7 months.
The 28% rate is correct over the 7 month period.

err nope re-read it.

 

[Deano's Right Foot]

But Dwayne you've got your money back plus the winnings in 7 months. That gives you a whole 5 months to invest it in something else.

The return is 16% in seven months, which works out to an APR (AER) of 28% or thereabouts.