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The author focuses on why "No" would probably win but the determining factor should have been whether his assessment of the actual odds were better than the boo
by foobarqux 12y ago
The author focuses on why "No" would probably win but the determining factor should have been whether his assessment of the actual odds were better than the bookmaker's implied odds.
- Fuzzwah 12y agoKnowing how well his bankroll can stand up to the high variance would be nice.
- foobarqux 12y agoYes, risk preference is the other important factor.
- junto 12y agoI had to transfer a considerable sum of GBP to EUR close to the vote. The bookies odds were a very good indication (2/7) of how many people had bet on a "No" vote. Basically the bookies odds are based on covering their backs ( and they are good at it). They don't often get it wrong. When lots of Scottish people vote on "No" then it is a damn better signal than pollsters in the street. Since the expected upside of a "No" was low (it went from ~1.258 to ~1.271 after the results came in), but the projected downside of a "Yes" was high (estimated at ~10% drop due to the 2 years of uncertainty in the markets - Scottish independence was scheduled for 2016), I decided to hedge on similar odds with the currency transfer. I'm happy with the decision. I could have got more EUR if I had waited, but that's what hedging is all about right?
- skizm 12y agoThe bet was close to even odds. Also since this was a one time bet, with the downside of (probably) him never betting again, even if it payed out 10x the money he bet, you would still want to be pretty sure you were right -- and not just "making the right bet" since the downsides far outweigh the upsides. This isn't "on a long enough timeline" bet, it is a "I need to be correct this time" bet.