Gambling, Risk, Being Risky and Luck

Gambling

Even though I have made the month 1 and 2 targets, I still wanted to carry on with my £1 plan, which was to bet 50p on 5x 10p bets on premiership and cup football matches. I wanted to see if this might be a viable option, Last week I bet 10p on each of the following:-

• Chelsea to win against QPR
• Manchester United to win against Wolves
• Manchester City to win against Fulham.

I got 2 out of 3 correct, which you might think isn't bad; but actually it's terrible at these odds.

So I got 12p, original 10p + 2p winnings from the Chelsea win, and 13p from the Manchester United win, original 10p + 3p winnings. So, I made 25% on these 2, or 5p altogether, but lost 10p on the Manchester City game as although they won the game, the game was a draw at 90 minutes.

So basically, I am 5p down so far, I am going to continue the experiment, with 2x 10p bets on Saturday. Probably Chelsea to win and Tottenham to win, which if they both come in successfully, will take my 50p to 51p, you have to love the bookies business model! quite a different return to the retail/shortbread 30p experiment!

OK, so again over the weekend - won 1, lost 1. My betting experiment is not going very well!!

I remember reading/listening to a definition from Robert Kiyosaki - from the Rich Dad Poor Dad brand, a definition of Risk and Risky in the context of Financial Intelligence. Where he would commonly hear people say that investing is too risky, where he would state that they were talking from a context, that investing was risky for them as them didn't have the knowledge or financial intelligence to be able to confidently make decisions, so investing isn't risky, there is an element of risk involved in investing, but it's the person that is risky, or acting risky, if they are not operating with enough information. I think it was from chapter 15 of Rich Dad's Guide to Investing: What the Rich Invest in That the Poor Do Not!

Some interesting definitions below of Risk, Risky and Luck.

Risk
Definition - from Wikipedia - Risk
"Risk is a concept that denotes the precise probability of specific eventualities. Technically, the notion of risk is independent from the notion of value and, as such, eventualities may have both beneficial and adverse consequences. However, in general usage the convention is to focus only on potential negative impact to some characteristic of value that may arise from a future event.
Risk can be defined as “the threat or probability that an action or event will adversely or beneficially affect an organization's ability to achieve its objectives”[1]. In simple terms risk is ‘Uncertainty of Outcome’, either from pursuing a future positive opportunity, or an existing negative threat in trying to achieve a current objective."



Being Risky

Definition - from Diction.com - Risky  
Risky - "attended with or involving risk; hazardous: a risky undertaking."

Luck

I have added Luck to this section as Thomas found a £5 on the floor and is using this for the challenge. Hope this doesn't upset the other participants, I have allowed this to be included in the challenge. As it was in the challenge window and brings an interesting aspect to the challenge of luck.

Definition - from Wikipedia - Luck

Interpretations of Luck

Luck is interpreted and understood in many different ways.

Luck as lack of control

Luck refers to that which happens to a person beyond that person's control. This view incorporates phenomena that are chance happenings, a person's place of birth for example, but where there is no uncertainty involved, or where the uncertainty is irrelevant. Within this framework one can differentiate between three different types of luck:

1. Constitutional luck, that is, luck with factors that cannot be changed. Place of birth and genetic constitution are typical examples.
2. Circumstantial luck - with factors that are haphazardly brought on. Accidents and epidemics are typical examples.
3. Ignorance luck, that is, luck with factors one does not know about. Examples can be identified only in hindsight.

Luck as a fallacy

Another view holds that "luck is probability taken personally." A rationalist approach to luck includes the application of the rules of probability, and an avoidance of unscientific beliefs. The rationalist feels the belief in luck is a result of poor reasoning or wishful thinking. To a rationalist, a believer in luck who asserts that something has influenced his or her luck commits the "post hoc ergo propter hoc" logical fallacy: that because two events are connected sequentially, they are connected causally as well. In general:

A happens (luck-attracting event or action) and then B happens;
Therefore, A influenced B.

In the rationalist perspective, probability is only affected by confirmed causal connections.
The gambler's fallacy and inverse gambler's fallacy both explain some reasoning problems in common beliefs in luck. They involve denying the unpredictability of random events: "I haven't rolled a seven all week, so I'll definitely roll one tonight".
Luck is merely an expression noting an extended period of noted outcomes, completely consistent with random walk probability theory. Wishing one "good luck" will not cause such an extended period, but it expresses positive feelings toward the one—not necessarily wholly undesirable.

Luck as an essence

There is also a series of spiritual, or supernatural beliefs regarding fortune. These beliefs vary widely from one to another, but most agree that luck can be influenced through spiritual means by performing certain rituals or by avoiding certain circumstances.
One such activity is prayer, a religious practice in which this belief is particularly strong. Many cultures and religions worldwide place a strong emphasis on a person's ability to influence their fortune by ritualistic means, sometimes involving sacrifice, omens or spells. Others associate luck with a strong sense of superstition, that is, a belief that certain taboo or blessed actions will influence how fortune favors them for the future.
Luck can also be a belief in an organization of fortunate and unfortunate events. Luck is a form of superstition which is interpreted differently by different individuals. Famous Swiss psychiatrist, Carl Jung, who founded analytical psychology, coined the term "synchronicity", which he described as "a meaningful coincidence".
Christianity and Islam believe in the will of a supreme being rather than luck as the primary influence in future events. The degrees of this Divine Providence vary greatly from one person to another; however, most acknowledge providence as at least a partial, if not complete influence on luck. These religions, in their early development, accommodated many traditional practices. Each, at different times, accepted omens and practiced forms of ritual sacrifice in order to divine the will of their supreme being or to influence divine favoritism. The concept of "Divine Grace" as it is described by believers closely resembles what is referred to as "luck" by others.
Mesoamerican religions, such as the Aztecs, Mayans and Incas, had particularly strong beliefs regarding the relationship between rituals and luck. In these cultures, human sacrifice (both of willing volunteers and captured enemies) was seen as a way to please the gods and earn favor for the city offering the sacrifice. The Mayans also believed in blood offerings, where men or women wanting to earn favor with the gods, to bring about good luck, would cut themselves and bleed on the gods' altar.
Many traditional African practices, such as voodoo and hoodoo, have a strong belief in superstition. Some of these religions include a belief that third parties can influence an individual's luck. Shamans and witches are both respected and feared, based on their ability to cause good or bad fortune for those in villages near them.

Luck as a placebo

Some encourage the belief in luck as a false idea, but which may produce positive thinking, and alter one's responses for the better. Others, like Jean-Paul Sartre and Sigmund Freud, feel a belief in luck has more to do with a locus of control for events in one's life, and the subsequent escape from personal responsibility. According to this theory, one who ascribes their travails to "bad luck" will be found upon close examination to be living risky lifestyles. In personality psychology, people reliably differ from each other depending on four key aspects: beliefs in luck, rejection of luck, being lucky, and being unlucky.^[16] People who believe in good luck are more optimistic, more satisfied with their lives, and have better moods.^[16] If "good" and "bad" events occur at random to everyone, believers in good luck will experience a net gain in their fortunes, and vice versa for believers in bad luck. This is clearly likely to be self-reinforcing. Thus, a belief in good luck may actually be an adaptive meme.