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> The thing is, it works sometimes. Yes. It does, like to buy a lottery ticket. It is not a good investment thou. > SoftBank really did go big on some very b
by Hokusai 6y ago
> The thing is, it works sometimes.
Yes. It does, like to buy a lottery ticket.
It is not a good investment thou.
> SoftBank really did go big on some very bad bets huh?
This is usually a misconception on how betting works. Many people looks at the result and classifies a bet as good if won and bad if lost. The reality is that the best way of looking at bets is from their expected return. A good bet is one with a positive expected return. Sometimes you will lose the bet and lose the money, but that does not mean that it was a bad bet if the expected result was positive.
If I bet you 100$ against 5$ that you get heads on a coin toss. That is a good bet for you. If you toss the coin and lose the 5$ that was still a good bet and you should take it again if you have the opportunity.
Were Facebook, Uber, Amazon,... good bets? It’s hard to say. What seems easy to see is if they turned into a profit or a lose.
- lotsofpulp 6y agoFacebook, Uber, and Amazon are not comparable at all to WeWork, Oyo, or some others. If you thought some 22 year old with no hotel management experience was within a few years going to rival Hilton and Marriott and come up with the in house policies, procedures, and build up the staff required to go around the world and perform constant quality control, then I have a bridge to sell you. Same thing with WeWork, there's no moat there.
- gowld 6y agoWait are you talking about WeWork or AirBnB?
- 9nGQluzmnq3M 6y agoNeither, they're referring to Oyo, which is also a Softbank-funded bubble undergoing a WeWorkian implosion. https://www.profgalloway.com/oyomfg https://www.profgalloway.com/oyomfg
- autokad 6y agowhen you invest in a series of companies knowing some will fail but the ones that dont will hit it big, and thus make money on average, that is not gambling or anything like buying lottery tickets. Think of it like a machine learning ensemble model. when you take a group of things, hopefully not correlated, you end up with a better result. when you average lottery tickets, you still lose.
- Hokusai 6y ago> that is not gambling or anything like buying lottery tickets That is literally gambling. That is what gambling experts do to get money. A very good example: https://thehustle.co/the-man-who-won-the-lottery-14-times https://thehustle.co/the-man-who-won-the-lottery-14-times Gambling is not about good or bad luck, it is about statistics. That is why the casinos are gambling all the time but get good profits. Casinos understand statistics and balance the bets on their side. And, as in your example, casinos lose many bets, it is in average that they make money. So, your example is completely correct, but it applies to all types of gambling.
- autokad 6y agoNo, thats flawed thinking. When you invest in a company, you are investing in an organization that will (at least its their responsibility to) try to succeed. They want to make money and/or grow. On average, investors are virtually guaranteed to make money. Thats why you call it investing, you are taking money and putting it into an asset that creates wealth. the strategy for success is in your hands. when you buy a lottery ticket or place a bet in a Casino, on average you are guaranteed to loose money (unless they are bad at their job or you are cheating). you are just hoping that you will not be one of the majority of losers, and this is at random. success is in the houses hands. your way of thinking on this is poisonous and its important you understand the differences, or at least make the world a better place by keeping your mouth shut on this subject. Telling people investing is gambling makes the world a worse off place.