Quote:
Originally Posted by tirtep
Excellent idea. If you're serious about it, go for it, Mr Mason. It's going to attract large audiences. Doesn't everybody gamble?
Hi tritep:
In my book
Gambling Theory and Other Topics, the last section is called "Gambling Fantasy" and, if you're interested, some of this type of material appears there, and here's one of the chapters.
Self-Weighting Disasters
One of the themes of this book is that correct non-self-weighting strategies are the way to success. Does this mean that self-weighting strategies are the path to disaster? Well, sometimes this is certainly the case. This essay provides some examples from history of disasters that were caused by self-weighting strategies. You should notice that all of these disasters could have been avoided if appropriate non-self-weighting strategies had been followed.
Disaster No. 1: The Spanish Armada. In 1588, Philip II of Spain decided to do something about England, which had become an irritant to Spain in the Atlantic Ocean and in the New World. Consequently, Spain sent a great fleet to England for the purpose of destroying the English fleet and then invading the British Isles. This fleet, known as the Armada, was to be defeated in one of the most one-sided battles in naval history.
Up until the battle, the Spanish had been successful by fighting at close range with large, slow-moving ships, and they planned to continue this tactic. Notice that this was a self weighting strategy. The Spanish planned to engage the English ships and slowly, mainly by force of numbers, devastate their opponents.
Unfortunately for the Spanish, the English adopted a different strategy, one that was non-self-weighting. They built smaller, faster ships with long-range guns. Their plan was to maneuver into position out of range of the Spanish guns, to take a few shots, and then as the Spanish fleet came toward them, to quickly move out of range and take some more shots.
Notice that the Spanish were playing every hand, while the English were playing only when they had an advantage. Needless to say, the battle was one-sided, and when the great Armada tried to take refuge off the coast of France, the English changed tactics. They set fire to many small boats and allowed them to drift into the harbor where the Spanish fleet had moved, causing much of the Armada, in its effort to escape, to be destroyed first by fire and later by bad weather.
The result was a dramatic victory for Sir Francis Drake and the English. Spain would now go into decline, while Britain would slowly become the dominant power in the world.
Disaster No. 2: The 1929 stock market crash. The market was going up, and everyone was buying stock. The typical investor didn’t care what stock he bought. The idea was just to accumulate stocks, and the more he had, the better. In addition, ways were created, such as buying on margin, that allowed the typical investor to accumulate even more stocks. Of course, this was done at tremendous leverage. Needless to say, this type of self-weighting approach doomed the typical investor to disaster, and in the fall of 1929, the market crashed and the country was plunged into depression.
Disaster No. 3: World War I trench warfare. Most of World War I was fought in the trenches, due to the fact that the machine gun had become such a potent weapon. Each side had adopted the same strategy. They bombarded their opponent’s lines, and when the shelling stopped, the next step was an attempt to move forward. Of course, the soldiers in the trenches were protected from the bombardment, and when the enemy tried to move forward, the side remaining in the trenches would again demonstrate how effective the machine gun was.
This pattern of shelling, trying to move forward, and being machine-gunned down continued for several years. Notice that each side was playing many hands with similar size bets. That is, self-weighting strategies were followed, and millions of soldiers were killed and wounded.
A correct non-self-weighting strategy would have been to stay in the trenches (not play so many hands) and wait for some development that would finally allow penetration of the enemy’s defensive lines. Eventually, something like this did happen. The British developed crude tanks (allowing them to move forward), the United States joined the war effort, and Germany became exhausted.
Disaster No. 4: The Battle of Fredericksburg. The year was 1863, and this was one of the major battles of the American Civil War. The Union Army of the Potomac, under the leadership of General Ambrose Burnside, met the Confederate Army of Northern Virginia, under the command of Robert E. Lee, at the town of Fredericksburg. Lee had his army well entrenched in excellent defensive positions on high ground. Burnside, in his desire to be on the offensive, launched many repeated attacks, but each attack easily was beaten back by the Confederate forces.
Instead of stopping the attacks after the first one failed, General Burnside adopted a self-weighting strategy and kept up the attacks for a full day, suffering almost ten times the number of casualties as the Confederates. In fact, Confederate General Peter Longstreet announced during the battle, “We can kill them all.” Finally, after a full day of fighting, Burnside had endured enough, and he called off the self-weighting massacre.
Disaster No. 5: George Foreman versus Mohammed Ali. In 1973, George Foreman appeared to be the most devastating boxer there ever had been. Not only had he knocked out almost all of his opponents, but he also had destroyed such formidable adversaries as Joe Frazier and Ken Norton. Foreman literally hit too hard for anyone to stay with him. It seemed that after a few punches, his opposition would just fall. Now it appeared that in Zaire, Africa, he also would destroy Mohammed Ali, who was trying to regain his title.
The fight began as expected. Foreman threw the punches, and his opponent seemed helpless as he just covered up. But Ali did a better job of covering up than anyone who was watching the fight realized. After a few rounds, Foreman was too tired to keep punching, and the former champion was not only unhurt, but fresh as well. Notice that Foreman had followed a self-weighting strategy. Constantly throwing punches led to his defeat. Ali, on the other hand, had followed a correct non-self-weighting strategy. He fought only when it was to his advantage, mainly at the end of each round when Foreman was most tired, and stayed out of trouble when fighting would have been to his detriment. This strategy, coupled with Foreman’s incorrect self-weighting approach, produced a stunning victory for Mohammed Ali.
Best wishes,
Mason
