Shagatola wrote: "Would you bet on a coin flip with a 10% edge (pays -1
or +1.2 for heads or tails) if you could only make the bet a
few times?"
The variance is .5(-1-0.1)^2 + .5(1.2-0.1)^2 = 1.21
The N0 is 1.21/.1/.1= 121
If I could do it at least 121 times per tax year, I'd consider it. A few times would be out of the question, unless I knew I had other gambling winnings that I could offset it with. I wouldn't want to pay taxes on the variance. Even at N0 you still have a 16% chance of losing, meaning about 1 year in 6. With one coin flip you have a 50% chance of losing. With one coin flip per tax year you pay taxes on 1.2 in the good years when your true win is only 0.1 per tax year. Between one and N0 you can extrapolate.
Shagatola wrote: "Would you play FPDW if you could only play 5,000
hands?"
Per tax year and no offsetting gambling winnings? No. You'd be paying taxes on the deuces and royals you hit in the good years with no carry forward of the losses incurred in bad years. If you don't see how that impacts your true EV, well then go for it!
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Posted by: nightoftheiguana2000@yahoo.com
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