12 ms·

not that i know the actual equation that seth is using, nor do i have knowledge of the values of the variables he's using... i'm pretty sure that betting on be

not that i know the actual equation that seth is using, nor do i have knowledge of the values of the variables he's using... i'm pretty sure that betting on being successful as a "devito" is much like betting on a long shot at a horse race. i'd rather bet on the field. lower payout, but way better odds... peace

nostrademons 18y ago
It's the parimutuel system at work - your expected payout depends not just on how fit your choice is, but how fit it is relative to everyone else's expectations. Godin's point - and this is echoed in Nassim Taleb's books, along with the research that spawned Blink - is that there's a built-in cognitive bias towards putting your money on the "expected" winner, and that most people don't realize that the odds already take the favorite's fitness into account. So your expected payoffs are often bigger with long shots, because most of the people betting follow the same mental heuristics. Even better is to do as Warren Buffett does (or appears to do), and calculate the actual odds. Then you bet only if the posted odds are significantly in your favor vs. the actual odds.