The Risk Versus Reward Ratio in Gambling

For generations, mathematicians have been trying to figure a way to take the risk out of risk markets. Millions of people the world over love to punt and wager money on the stock market or in other areas like sports betting and poker, the underlying problem is that the vast majority of these people are actually risk averse.

Being cautious with money is an entirely natural trait but with areas like sports betting, the stock market and poker then the sheer fascination of these topics grip millions of people (probably hundreds of millions). It is why there are untold numbers of books on all of these subjects and there will be many more written. This is before we even look at websites, instructional videos and everything else. The sheer volume of educational literature reflects the public interest in all of these three avenues.

But not wanting to risk money is endemic within the human psyche. We all love the thought of being able to make large amounts of money without incurring risk. But there are inherent risk/reward ratios in all forms of speculation and gambling and the overwhelming law of the jungle is that in order to achieve huge returns, you must accept considerable risk.

If you are a tight poker player who basically sits there waiting for weaker players to make a mistake against you then the chances are that if you have the discipline then you will make money. But just how much money will you make? In many types of poker game, it is the more loose aggressive players who rake in the big bucks.

With this of course comes greater fluctuation and if you are going to open up and go for greater returns be it in poker, the stock market or sports betting then you are going to have to accept far greater risk. This kind of philosophy was drummed into all of the leading Swiss investors and the Swiss have been noted for their investment and betting acumen.

If you are going to chase big bucks without incurring any risk then your chances of making big money are almost non-existent. Like with national lotteries for instance…..small outlay…..massive return…..but just look at your chances of winning something meaningful!

There is of course a world of difference between pushing the boat out and taking on more risk and being reckless and tossing money away. Successful city traders make the process of managing risk their number one priority. Speculation is almost an art form and is why people like John Paul Getty became one of the richest people in the world.

George Soros is another name that springs to mind and his record in the financial markets is so revered that he has been known to move markets with just his single opinion. But Soros too was a risk taker, but they are calculated educated risks and also risks that are underpinned by years of experience in the world of speculation and investing. But the most successful professional sports bettors risk huge sums of money every single day of the week.

So what is the point of this article? Well I hope that it points to one very important factor in life, this is that if you want to make it big…..I mean really big…..or you want to win big or win a lot of money in an area where the odds against you are not millions to one then you have to accept substantial risk.

The Swiss speculators believed in it and they believed that cash assets were limited in value. But there are plenty of people who simply cannot go beyond their own individual barriers when it comes to risking money. They crave the safe option, well I think that what the current economic global financial situation has taught us is that there are no safe options. So maybe its time to come out of your shell and accept a little risk for once in your life and who knows…..you may just enjoy it.

This article was produced by Carl “The Dean” Sampson.