Monday, May 19, 2008

How to Always Win

"If you bet against your own victory, you'll always win."

(although I'm sure somebody else has thought of this too)

That being said, you'll also always lose as well. The key is to use this sort of strategy to minimize your potential losses. Consider the following scenario:

You have a 50% chance of winning something - say $100. You could now (assuming you can find a gambler) bet against your winning that money - say $50. The result now is that no matter what you will obtain $50.

Of course, assuming you can only find people to bet on good or even odds, and that the payback will always be equal to the likelihood of winning, all this really lets you do is cash in on your average winnings. A second example:

You have a 1/10 chance of winning $10. The odds are 9 to 1, so you make a bet with somebody where you will pay $9 if you win and they will pay $1 if you lose (because you're saying "Betcha I lose!". Whether you win or lose, you get $1 - which is your average winnings anyway - 1/10 of $10.

But forget all of this as it applies to money, because it isn't actually that helpful. What is more important is to apply it to life. I came up with this quote and the concept in English class while discussing Ernest Hemingway's The Sun Also Rises. The main character, Jake Barnes, realizes at one point while he is going to sleep that humans always make what they think is the best choice. There is never a time when we will purposely choose the choice we think is worse, because even if we want to hurt ourselves, then we still want to do it.

An excellent example of this is me and tomatoes. I don't like tomatoes at all. However, being the odd person that I am, I eat them anyway whenever they're presented to me. I don't go out of my way to get them, but if they're on my plate or in my salad, I'll eat them even though they almost make me sick. One might think "Aha! He's doing something he doesn't want to do!" but I do this to remind myself that I don't always get everything I want (and because tomatoes are fairly healthy). Thus, in reality, while I might not get any intrinsic enjoyment out of eating the tomato, I do enjoy the psychological effect it has on me and so I do it anyway. This applies to everything.

We never make the choice we think is worse. We can't do it. Even if we choose the choice that looks worse, it's because we expect it to turn out better. As such, humans are completely self-serving at the lowest level. Even altruists and philanthropists need to justify to their decision-maker the choices they make. This being said, there are certainly people who are less selfish than others – people who have decided that an important factor in decision-making is other people – and these people are much more pleasant to be around.

I've digressed from my original topic to another that I'm fond of, but I'd now like to get back on track. Basically, what you want to do in life is to make sure that what you sacrifice always pays out favourably. Jake realizes that enjoyment comes from maximizing your personal Return on Investment – to invest time and money in things you enjoy.

Next time you make a big decision, make sure to figure out whether it will actually be good in the long run or if it's just good for a short time. Weigh all of the facts to make sure you make a good profit.