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In an interview, Warren Buffet suggested that if someone was perfect at the Final Four, he'd offer to buy them out for the EV (or even half the EV). If you are
by fsk 13y ago
In an interview, Warren Buffet suggested that if someone was perfect at the Final Four, he'd offer to buy them out for the EV (or even half the EV). If you aren't already rich, you'd be an idiot to not take his offer. It pays for Warren Buffet to buy someone out for their EV, because that minimizes HIS risk.
Even if the person refused the offer, Warren Buffet could go to Vegas and bet on the last couple of games, as a hedge.
Even if you're perfect at the sweet 16 (which has never happened), with 15 games left (assuming each is a coinflip), your EV is 1/2^15 ~ 1 in 32000, so your bracket is only worth $300M/32000 ~ $9k.
- ryguytilidie 13y agoAssuming each is a coinflip is not a reasonable assumption.
- biesnecker 13y agoI think it's even worse than a coin flip. At least with a coin there's a reasonable assumption that the odds are 50% both ways. Flipping the Duke/Mercer coin, though, you have have a maybe 95% of landing on Duke, which causes significantly more than 95% of people to put their money down on that, whereas with a normal unweighted coin you'd expect ~50% of people to bet on each side.
- paul_f 13y agoThere is no way to hedge $100M+ on sports bets. Nobody will take that kind of action, even if he spread it around to every single book. I personally think if I was offered $10M as a settlement, I'd take it.
- fsk 13y agoHe can start hedging in the Sweet 16 (assuming only 1 perfect bracket exists), where he only has to bet $20k-$100k on each game.
- gibybo 13y agoIf Buffet only offered half the EV, it's likely you could sell your stake to another investor/insurance company/etc at something closer to the EV (maybe 90%+), so I think Buffet would have to offer close to that as well. You could probably even find someone to sell a partial stake to which would get you set for life and still allow you to ride the bet to the end.