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Do You Play the Lotteries?
Poll ended at Fri Jan 14, 2011 9:44 am
 Never. 40% [ 2 ] About once a month. 20% [ 1 ] About once a quarter. 20% [ 1 ] About once a year. 20% [ 1 ]
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 Post subject: How to Win the Lottery … Every time!Posted: Tue Jan 04, 2011 9:44 am

Joined: Tue Jan 04, 2011 4:33 am
Posts: 12
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Tue Jan 04, 2011 2:23 pm

Joined: Mon Nov 01, 2010 5:15 pm
Posts: 1038
 Q: How do you double your money in Vegas?A: Fold it in half & put it back in your pocket.
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Tue Jan 04, 2011 9:08 pm

Joined: Sun Oct 14, 2007 11:10 am
Posts: 317
 The lottery is a tax on people who are bad at math.
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Wed Jan 05, 2011 12:25 pm

Joined: Fri Sep 12, 2008 12:29 pm
Posts: 1449
Location: Seattle, WA
 Buying one lottery ticket every now and then is better than \$15 worth every week.The expected value of a \$1 lottery ticket is about 50 cents, so you lose 50 cents every time you play. With the first ticket you can imagine you are buying cars, houses, jets, vacations, and whatnot. Those imaginary purchases are probably worth 50 cents of utility if they give you a warm fuzzy feeling. However the rest of the tickets don't let you purchases incremental imaginary cars etc. So for those you are just wasting 50 cents. Even if you could buy more imaginary cars with multiple tickets, the marginal utility of each imaginary car decreases. Also the opportunity cost of time spent imagining cars goes up.
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Thu Jan 13, 2011 2:09 am

Joined: Mon Mar 30, 2009 2:04 am
Posts: 102
Location: Finland
 Quote:"...I will say however, that everyone should do themselves a huge favor and get out of the “something-for-nothing" mentality, and the quicker the better..."Couldn't one argue that your uncle used the same kind of logic? He didn't do anything and therefore won, i.e- got something for nothing. I play the lottery every week. I do win sometimes but I lose most of the time. However, I only play for a few euros per week so the annual expense is comparatively low. I play the lottery for the chance, no matter how small, to win. It grants me a few minutes of "what if...". I have long ago come to the conclusion that the only realistic way of amassing money is to save every month for years. But no matter how hard I save, I will most likely not ever be able to save millions, not even if I save the money I spend on lottery tickets. Realistically, I will not ever be totally financially independent (and by that I mean just being able to sit around collecting interest) so what I am buying for those few euros is a small chance and the right to dream. Sports betting on the other hand; I do that once in a while to see how good I am and to make it just a bit more interesting. I don't *need* to gamble and I *could* save the money but it's just one of those little things that makes life just a bit more interesting and enjoyable. _________________Fortes Fortuna Adiuvat
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Thu Jan 13, 2011 6:05 am

Joined: Tue Mar 11, 2008 12:19 pm
Posts: 1585
 The way I look at it, lotteries are just another notch on the same "risk/return" spectrum as any other type of investment.Think about it.If you invest in a CD, you stand to gain very little (~1.5%?), but your risk is also very low. The only way you lose your money is if the bank fails and FDIC cannot/will not pay.If you invest in bonds, your anticipated return is a little higher, but so is your risk of losing money.If you invest in a stock, you could make double-digit returns, but if the company flops, you could lose a significant portion of your capital.If you invest in leveraged real estate, you could gain a lot of money, or the market could nose-dive (a la 2008) and you could end up in the red, owing more than your asset is worth.If you invest in a lottery ticket, your rate of return could be astronomical - literally millions of a percent - but your risk of losing your entire "investment" is almost certain.They're all just different "risk/return" ratios on the same spectrum, in my opinion.
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Thu Jan 13, 2011 8:02 am

Joined: Tue Jan 04, 2011 4:33 am
Posts: 12
 Hey JonasCouldn't one argue that your uncle used the same kind of logic? He didn't do anything and therefore won, i.e- got something for nothing. I love your "lateral way of thinking"I had a good chuckle over that one and you're absolutely right.
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Thu Jan 13, 2011 10:39 am

Joined: Fri Sep 12, 2008 12:29 pm
Posts: 1449
Location: Seattle, WA
 kombat wrote:The way I look at it, lotteries are just another notch on the same "risk/return" spectrum as any other type of investment.Well, to using some gambling/probability terms, stocks, bonds, and CD's are all +EV (expected value). Stocks are more +EV but also high variance; down to CD's which are lower EV but low variance. You could draw a graph with data points for CD's up to leveraged real estate. Each data point would have a higher EV and a higher variance (risk), so you could draw a line showing the positive correlation between the two variables. The line, in investing terms, is known as the efficient frontier.However lottery tickets are both high variance and -EV. So if you put it on that graph, it would be well off the line. Thus, it is a bad investment.
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Mon Feb 07, 2011 7:55 pm

Joined: Mon Jan 31, 2011 1:57 pm
Posts: 21
 losing is definitely a frustrating feeling when gambling. So what i suggest is to plan the amount of money which you will spend in every game. When you feel like losing, quit playing. Never chase your loses
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Tue Feb 08, 2011 10:18 am
 Moderator

Joined: Wed Sep 23, 2009 9:01 am
Posts: 4998
 stannius wrote:Well, to using some gambling/probability terms, stocks, bonds, and CD's are all +EV (expected value). Stocks are more +EV but also high variance; down to CD's which are lower EV but low variance. You could draw a graph with data points for CD's up to leveraged real estate. Each data point would have a higher EV and a higher variance (risk), so you could draw a line showing the positive correlation between the two variables. The line, in investing terms, is known as the efficient frontier.However lottery tickets are both high variance and -EV. So if you put it on that graph, it would be well off the line. Thus, it is a bad investment.That's not a great way to look at it. Stock options have an EV=0 yet they can be used either for speculation or as insurance. When used as insurance they reduce risk. They fall closely on the efficient frontier to lottery tickets. But that does not make options a bad investment.Personally I don't play the lottery and I do not consider it an investment in any sense of the word. But I have seen various analyses of the lottery that look beyond just EV that make an academic case for lotteries.For example, it is common in academic literature to focus on expected value as the rational way to make decisions. It is also known that humans do not make decisions based on expected value. We tend to focus on the risk side. Risk aversion is given a greater weight than reward-seeking. This behavior has been observed and documented consistently across a wide range of decision environments.In the context of investing, this means that if you make decisions based on expected value when you are playing the game with a bunch of other people that are using different criteria, you might not be as smart as you thought. The trouble is that this behavior is hard to quantify. But it explains many characteristics of markets including the formation and collapse of bubbles. (Differing perceptions of risk lead to different behaviors even though the objective situation (EV) remains the same.)In the context of the lottery, the risk is always \$1. The expected value might be -0.5 but the situation is so asymmetric that people will play. And it is not necessarily a bad decision when considered under an alternate version of decision theory that is based more on reality than the expected value approach.
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Sat Oct 19, 2013 10:58 am

Joined: Sat Oct 19, 2013 10:49 am
Posts: 1
 NoBoB wrote:The lottery is a tax on people who are bad at math.Has anyone heard of or read Lottery Guidebook by H.W. Brown? It claims to give you better odds at playing the lottery with maths... sounds legit... I think I'm going to try it.
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Sat Oct 19, 2013 12:01 pm
 Moderator

Joined: Wed Sep 23, 2009 9:01 am
Posts: 4998
 isshortits wrote:NoBoB wrote:The lottery is a tax on people who are bad at math.Has anyone heard of or read Lottery Guidebook by H.W. Brown? It claims to give you better odds at playing the lottery with maths... sounds legit... I think I'm going to try it.What a joke. Don't waste you money on that book.
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Mon Oct 21, 2013 10:25 am

Joined: Wed Aug 17, 2011 8:28 am
Posts: 196
Location: Pittsburgh
 I play the lottery for my enjoyment. The average individual spends more per day on coffee than I spend on the lottery. Based on some of the responses here, I am sure when people see me at the lottery they think "what a waste of money." Well, I think the same thing when I see people exiting Starbucks. Neither is a correct assumption if the main purpose is enjoyment.
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Mon Oct 21, 2013 10:56 am
 Moderator

Joined: Wed Sep 23, 2009 9:01 am
Posts: 4998
 DaveInPgh wrote:I play the lottery for my enjoyment. The average individual spends more per day on coffee than I spend on the lottery. Based on some of the responses here, I am sure when people see me at the lottery they think "what a waste of money." Well, I think the same thing when I see people exiting Starbucks. Neither is a correct assumption if the main purpose is enjoyment.But if you win big you'll have all kinds of expenses for taxes, lawyers, and keeping long lost family members away. I've always though it best not to risk winning.
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 Post subject: Re: How to Win the Lottery … Every time!Posted: Mon Oct 21, 2013 10:58 am
 Moderator

Joined: Wed Sep 23, 2009 9:01 am
Posts: 4998
 Along the lines of what Dave said, my wife and I like to go to Vegas occasionally. And yes, we do gamble some. But we also go to Disneyland, Universal Studios, and Sea World now and then as well. Almost inevitably we spend more per day in California than in Vegas even including the gambling losses.
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