> A 101 on not gambling: Don’t make negative expected value bets This advice seems like a good general rule of thumb, but I don’t think it holds up on scrutiny

> A 101 on not gambling: Don’t make negative expected value bets This advice seems like a good general rule of thumb, but I don’t think it holds up on scrutiny. For example, I consider all purchases I make to be investments. I am a safe driver, but still decided to pay for comprehensive car insurance (above what is required by law). I understand this investment has a negative expected value, but helps to reduce the variance of my “portfolio”. Similarly, if there is a large planned withdrawal from a brokerage account in a year, I could imagine someone buying some slightly below the money puts on the assets (with negative expected value). Now you could argue that the bet as a whole has a positive expected value.... maybe the advice could be better phrased as “make sure that in sum your investments have a positive expected value”....