What is Casino House Advantage? Why casino can win...

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What is Casino House Advantage? Why casino can win...

Postby Dennis Ng » Wed Jul 18, 2012 1:18 pm

Risk/Reward Tradeoff.

You can see from the term that Real Investors always consider Risk first, ie. worst case scenario, how much will they lose? Then if they are comfortable with absorbing such loss by asking (what if I'm wrong, will I be financially ok?)....

Only then, then they look at the potential upside. And they are only interested to invest if the upside potential is at least double the downside (by now, the meaning should be clear and I shall not repeat myself).

The average person either will ask: is there risk? (of course everything has risk, even if you sleep, there is a risk you may not wake up tomorrow). How much is the returns? (greed comes in and they are naively attracted if someone tell them a High return). Then they wonder why they always lose money in investing? When in actual fact, investing without KNOWLEDGE is actually not investing, but simply Gambling.

Yes, in the Million Dollarss seminar I also shared that Dr Tony Tan (our current President) shard that "when you take care of the downside, the upside will take care of itself" .

Thus, a person who really know how to invest is almost 100% guaranteed to get Richer and Richer over time...becos he always has the "odds in his favour". Real Investor will NEVER gamble becos the odds are too low and not in his favour. Similarly, real investor also will not go to Casino to gamble, becos the Casino has an "House Advantage" that given sufficient time, the Casino typically is the one who wins, and its customers (the gamblers) are the ones who lose.

for meaning of House Advantage, go read this link: http://en.wikipedia.org/wiki/Casino_game

There are many real life stories of how some people got addicted into gambling becos at first they are winning and making money from Casino, and this keep them going back...then they start losing, but they always console themselves that the next Round he/she will make money and if he/she just get back his/her capital, he/she will stop gambling at the Casino. Guess what? They cannot stop themselves, be it winning or losing...and over time, in the end they always lose and there are many real life sad stories of family being broken up, or the gambler committing suicide, or even threaten to kill his/her family members if they don't give him/her more money to gamble...

Once a person know that if a person know how to invest, getting Richer and Richer is almost 100% guaranteed, then this person will NOT gamble. I'm a good real life example. All my family members (I mean my parents, brothers and sisters) will buy 4D, I'm the only person in the family that do not buy 4D...and guess what? I'm the richest amongst all of them, but the fact is that for many years, my income is lower than my 2 other brothers. (my sisters are all housewives).

Thus, I became a multi-millionaire and reached Financial Freedom NOT becos I earn a high income, but becos I learn how to Plan, Manage and Grow my money. For many years when I worked in the bank from 1993 to year 2000, my total spending for 5 days' lunch can be just S$20 or less (means each lunch I spend S$4 or less)...and then I spend about S$100 on the weekends. Thus, my personal total spending for 1 month can be only just S$480 or slightly over...

This is why when I first started work in year 1993 when my starting pay was only S$1,500, and take home pay only S$1,200, and I give my mother S$200 per month and I still manage to save 20% or about S$300 every month. As my income grows, my spending increased, but I always make sure that the increase in expense is less than increase in my income...

And now that I'm financially free, even if I buy a Rolex for S$15,000, I'm actually not spending my own money, becos if I made say, S$200,000 from stock market in 1 year, then I'm just using part of my winnings as a form of "recognition" for myself, for doing a good job of growing my money. On the other hand when I was not financially free, I wore a S$40 Casio watch for 7 years..

Most people cannot become Rich becos they spend like the Rich EVEN when they are not Rich. I see so many people carrying LV bags, but it is only during the recent Europe trip that I finally convinced my wife to allow me to buy a LV bag for her as a gift...then at Paris airport, we saw another tour group where teenagers were carrying LV bags, of course the mother also carry LV bags...imagine a teenager who is just a student already used to LV bag, then this becomes a habit, this will become a burden for her if when she works, her income is not high, just S$3,000 or so...and buy a S$2,000 bag...

And then ironically, you see more and more Singaporeans in their 60s and 70s still working, working in Mcdonalds, working as toilet cleaners, working as hawker centre cleaners...I guess NONE of them when they were young DREAM that one day this is their FUTURE...but this would be the future of many Singaporeans if they continue to just spend, spend and spend, without learning how to save money and then grow the savings through investments.

It is becos when I reach 60 years old, I don't want to see any old people FORCED to work (not becos they want or like the job, but becos they need the money), I swore to myself that I will do my utmost to help as many Singaporeans as possible, learn how to master their finances so that when they are old, working or not is a choice they can choose to have, not a must.

Why are people having problem saving enough retirement savings even when they retire at age 65 while I could retire at age 39 (3 years ago)? The CAUSE of the problem is they don't know how to Plan, Manage and Grow their money through investments. That's all.

I'm a Living Real Life Example that this can be done and I hope by sharing my personal journey that I can inspire many more people to want to learn how to master their own finances.


Albert wrote:Daniel, that is correct.

So, you analyse that this stock you investing at $1 will at most drop to 80cts but will at least increase to $1.40 or more before making the Buy decision.


My take on the upside is twice of downside is :

Look yourself as a risk manager. Focusing on the RISK, then the POTENTIAL! If the Risk(downside) is 20cents, you expect to get 40cents(Upside) in return. "When you take care of the downside, the upside will take care on its own"

Often people focus on the upside where greed comes into play, and forgot that in each investment you can lose too. We are running a marathon and not a sprint. Thus, it is ok to risk 20% to gain 40%. That is why Dennis say that it is ok loss 6 out of 10 times but still gain as a whole only if you stick to upside is twice of downside
Cheers!

Dennis Ng - When You Master Your Finances, You Master Your Destiny

Note: I'm just sharing my personal comments, not giving you investment advice nor stock investment tips.
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Re: What is Casino House Advantage? Why casino can win...

Postby racoon12 » Wed Jul 18, 2012 10:06 pm

Hi All

Just my sharing...during my course of work I have met up with a Ex-Genting Casino croupier/Casino dealer that in short below is his sharing:

1. After left Genting, he never ever planned to be full time gambler, eventhough he can be one PROFESSIONALLY
2. his skill; he's able to accurately foretell which number & which quadrant of the ball will lands in a Roulette, just from just looking at the Dealer throw out the ball
3. He is capable of throw the ball and lands on the number you call for in the Roulette (the roulette weigh, size, the ball = everything are being modified regularly)
4. He was call in to make sure gambler loose all his win, even though the gambler used mathematical calculation to make his wins
5. Regularly without fail, Casino will make sure that all gamble equipment are being tweet or improve or modified so that they're never be the same all year round
6. And he shared that every moment in Genting there're gamblers that loose everything and jump down from the hotel

Also, I personally know a jackpot technician that told me all jackport machines can be adjusted/pre-set the count of loose to per win after XXXXX number of bet. This is bcos the amount of win & per win is aligned to Authority tax, due to tax issue.

So how to win in casino? :?:
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