help me explain something to a friend

[Spanners]

My friend is smart, but he cant grasp this one issue. I cant convince him that Im correct. Ive tried to see his side but as a poker player I just cant agree with it.
We were having an argument about sports betting. I bet $100 on a head to head match, and I bet on the underdog, who were paying $475 for a win. I made the bet because I thought the underdog had a better chance of winning than the odds they were getting.

Him: You should never bet on the underdog. I always bet on whichever team is the favourite.

Me: But I thought they were good odds man.

Him: Yea but theyre the underdog.

Me: Its all about long term.

Him: *picks up the losing ticket* - its not long term. You lost $100 right now.

Me: Ok so lets play a game, we roll a dice. If I get a 6 you give me 1000. If I get 1, 2, 3, 4, or 5 I will give you 100. Youre the favourite and Im the underdog.

He is willing to play this game once with me (giving me the 10
00 if I roll a 6), but will not play the game a million times. We calculated the EV and he understands that, and that it is negative expectation in the long run. However, he will still play this game once, and only once, because he is the favourite. He will not play the game twice or more, because "odds of me winning go down the more we play"

His argument is basically that you should never bet on the underdog in sports betting, even if it is a positive EV situation. "Because you can never play in the long term, each sports game is independent and unrelated, so you should always bet the favourite"

I tried to tell him that a lot of "favourite" but -EV bets will combine to make you a loser - you win lots of little bets but lose a big one. But he doesnt grasp the concept of long term. Maybe I couldnt phrase it in the right way. Can someone think of a good example or phrasing?

[UG]

Umm, no, you did a good job. Just say to yourself, "you're stupid," and move on.


P.S. The Rockers are awesome.

[Numbr2intheWorld]

I don't understand his logic at all.

[Spanners]

Lol george you meanie :P

Yea its hard to explain the way he thinks but he says I did the wrong thing in betting $100 on that underdog.
"Most of the time they lose, and wham you lose $100 and youll never get to bet on that exact game again to make the money back"

Yikes. Anyway I found this online:

Assume I engage in a gambling strategy that has 999 chances in 1,000 of making $1 (event A) and 1 chance in 1,000 of losing $10,000 (event B).

My expecation on this bet is a loss close to -9. The frequency or probability of the loss is totally irrelevant; it needs to be judged in connection with the magnitude of the outcome. Odds are that we would make money by betting for event A, but it is not a good idea to do so.

This mathematician guy Nikolas Taleb suggests that most people (including those with advanced degrees or MBAs) would be enticed to act on the winning odds (Event A) due to the inordinate focus on the frequency despite the understanding that an occurrence of a low probability event may affect a greater deal relative to the outcome than the combined wins.

So at least it seems like theres other people out there who cant grasp it.

[bigspenda73]

Underdogs never win

[midas06]

Tell him to do STAT112 in the second semester

[Pelion]

His argument is basically that you should never bet on the underdog in sports betting, even if it is a positive EV situation. "Because you can never play in the long term, each sports game is independent and unrelated, so you should always bet the favourite"

Play the dice game with him but let him use a different die each time. He should be happy with that.

[IowaSkinsFan]

tell him to go fuck himself.

[gabe]

bet sports with him. have him give u ridiculous odds on the underdog and make him bet the favorite each time and he will regret. if he rejects this then you can tell him your point is proven.

[drmcboy]

wow, nh gabe

[gabe]

ship it

[ensign_lee]

Underdogs never win?

Crap...I need to readjust my betting strategy.

http://www.sagestats.com/view.php?uid=322424978

M/L Underdogs: 12-7

[ensign_lee]

bet sports with him. have him give u ridiculous odds on the underdog and make him bet the favorite each time and he will regret. if he rejects this then you can tell him your point is proven.

wow. good idea.

[Numbr2intheWorld]

SHIP IT

[IowaSkinsFan]

I still like telling him to go fuck himself better.

[Galapogos]

Gabe is so cool.

[givememyleg]

Play the dice game with him but let him use a different die each time. He should be happy with that.

ha!

[Spanners]

Heh, thanks for the replies. Pelions and gabes arguments were easy ways to explain it..... thanks. He finally conceded defeat and admitted I was right. He always wins arguments with me so it was a good feeling to finally get one back

And yes Midas, hes already passed first year stats. Mind boggling

[Halv]

So did you tell him do go fuck himself?

[Spanners]

Nah, Im too nice for that...

[Lukie]

your friend is an idiot.

some people are so dumb that you can explain the most basic of things to them and they will never understand it. in all likelihood, your friend is one of these people.

[Spanners]

Yea, he gets lots of A+ and so on so its funny he couldnt grasp this one

[boost]

Yea, he gets lots of A+ and so on so its funny he couldnt grasp this one

good grades != smart