A GAMBLE

Posted at 23:30

“Pathetic… just pathetic!”

Not for the first time I found myself screaming at the TV set the other night, while my imaginary daughter gives me one of those looks that can be translated as “Why was I the one who got a lunatic for a father. There must have been a mix up at the hospital.”

We were watching Who Wants To Be A Millionaire, and a fifty-something year old numpty had clawed his way to £10,000. The next question stumped him and so he phoned a friend. The friend said he was 90% sure the answer was C.

But that was not good enough for Mr Numpty.

“I’ll take 50-50” he says.

The 50-50 leaves just A and C remaining.

“I can’t risk it,” says the human dynamo. “I’ll take the money."

Arghhhhhhhhhhhhhhhh!!!

“Why did you say he was pathetic,” asked my daughter Imaginella, after I’d thrown in “Loser!” and a couple of other expletives for good measure. “Maybe he needed the money.”

She would have been right of course. He almost certainly did need the money. But he needed it because he’s spent his whole miserable life making stupid weak decisions like the one just illustrated. He didn’t make the decision because he needed the money. He needed the money because that’s the sort of decisions he spent his life making.

Let’s look at the ‘take the money’ decision in more detail…

The upside of answering the question was that he would make an extra £10,000 immediately - double his money and be in line to make a whole lot more. The downside was that he would lose £9,000. The upside was therefore a lot bigger than the downside, but let’s now assume it’s the same and look at the odds instaed…

He’s already had someone (presumably someone he trusts) tell him that there’s a 90% chance the answer is C, and the 50-50 confirms that it’s still a possibility. I reckon that puts the chances of the answer being C at about 20-1 On.

In other words, there’s only a one in twenty chance it’s going to be wrong. So it’s an opportunity to make an even money bet at odds of 20-1 ON…. (With someone else’s money too!) And he still doesn’t take it. And this is his one and only opportunity to make some serious money in this way.

How is that man ever going to achieve ANYTHING

with an approach like that?

I think a lot of people go through life like this… refusing to take on any kind of risk at all, irrespective of how the odds are stacked in their favour, or the potential return. And if they do, it’s almost impossible for them to prosper.

Now don’t get me wrong, I’m not suggesting you should just throw caution to the wind. I’m certainly on the cautious side myself. But there has to be some balance… some analysis of the risk/reward equation, rather than a blanket rejection of any risk at all.

Because to reject risk altogether is to accept that you’ll never move forward, because there is rarely ever any reward without some degree of risk. And on the whole, the biggest rewards come with the biggest risks…

Unless you’re a contestant on a TV gameshow that is.

A GAMBLE

   

1 Comment:

1. Someone said...
   6 December 2010 at 01:04  
   he took the ol "bird in the hand is worth two in the bush" but im with you. i would have risked it.

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