Has the stock market peaked?

cisamcgu

N1AK wrote: »

And people would be more inclined to believe the story if that's what they said they did. Anyone can come on a forum and say their investment strategy has gotten an amazing/good/mediocre/poor result, it doesn't make it true or credible. Even if it was true, it gives no indication of whether it was sheer dumb luck or expert strategy.

I know someone whose father's gambling strategy is to bet red on roulette and keep doubling his bet "because as soon as he wins once he'll be up on where he started". He's probably gambled dozens or hundreds of times, and hasn't ever lost yet, but that doesn't make him a gambling expert; in fact there's a tiny chance of financial disaster every time he bets (if he keeps losing until he can no longer finance a bet at double his previous bet).

I find this startlingly unlikely. The table wins on a "0" or "00" - and therefore the doubling up will always fail in the end.

Also, even doing this 15 times with a £1 starting bet would cost 2^15 which is over £32,000 (I think ) !

Eco_Miser

Betting on red wins double the stake 18 out of 37 times. However, doubling his bet every time he loses will quickly bring him to the table limit, and he won't be able to double up again, and so lose all his stake.

Malthusian

N1AK's friend's dad's strategy is known as the Martingale system and is at least 200 years old. It is pretty much the only gambling system in existence that actually works. The catch is that to make it work, you need to start with an infinite amount of money.

Of course, if you have an infinite amount of money I don't know what the point of gambling is.

chucknorris

Malthusian wrote: »

N1AK's friend's dad's strategy is known as the Martingale system and is at least 200 years old. It is pretty much the only gambling system in existence that actually works. The catch is that to make it work, you need to start with an infinite amount of money.

Of course, if you have an infinite amount of money I don't know what the point of gambling is.

That isn't the catch, the catch is the table limit kicks in too quickly, which limits the number of times that you can double up.

N1AK

Malthusian wrote: »

N1AK's friend's dad's strategy is known as the Martingale system and is at least 200 years old. It is pretty much the only gambling system in existence that actually works. The catch is that to make it work, you need to start with an infinite amount of money.

I'm glad someone else got it, rather than thinking I was proposing it as a sound strategy :rotfl:

I've got no idea how table minimums and maximums work, it was obvious to me it was a flawed strategy when I heard it. That doesn't mean it isn't one that doesn't have a decent chance of meaning a irregular gambler could never lose a penny, and even if it worked it wouldn't make them an expert gambler. Thus my point: The results of your actions, especially when random factors have a major influence, don't in themselves prove the actions were smart.

N1AK

Eco_Miser wrote: »

Betting on red wins double the stake 18 out of 37 times. However, doubling his bet every time he loses will quickly bring him to the table limit, and he won't be able to double up again, and so lose all his stake.

If you are able to double up 9 times then there's a 1/403 chance of losing. Thus someone who bets that way 100 times has a 75% chance of never coming away with a loss.

It's basically the exact opposite of the lottery where you have a huge chance of making a tiny loss and a tiny chance of making a huge profit.

N1AK

cisamcgu wrote: »

I find this startlingly unlikely.

Also, even doing this 15 times with a £1 starting bet would cost 2^15 which is over £32,000 (I think ) !

It says rather more about your creativity deficit than the truth of the story; as others have said it's not actually a new concept, though the person I am talking about may have come up with it independently.

Consider that the odds of losing often enough in succession to reach that £32k bet is 1/21,965. If you bet once every day you're 50% likely to lose once in the first 15 years, and would lose once every 30 years on average.

It's a poor strategy, in my opinion, but that doesn't stop it being one with a low chance of failure.

coastline

We've gone from a SIPP to a Self Taught Roulette Investment Plan....STRIP.

Malthusian

That isn't the catch, the catch is the table limit kicks in too quickly, which limits the number of times that you can double up.

There are casinos that cater for high-rollers and will take very large bets. If the Martingale strategy dictates that you bet £32,000 and the casino refuses to take it, find another one. Practically speaking, you will run out of money long before you run out of casinos willing to take it off your hands.

The other problem with Martingale (apart from needing infinite money to make it work) is that gambling is supposed to be fun. (Allegedly. That's what the adverts at half-time try to tell me.) What's fun about gambling £32,000 after a string of blacks and only winning £1? The Martingale strategy has worked - as it always does - but it seems a bit of an anti-climax.

racing_blue

I'd really like to hear the specifics of Kittie's plan. He/she was happy to share that they had sold at point X. It would be helpful if they could share their plan for buying back in at point Y - how they arrived at that point, and what their contingencies are. Otherwise the post feels far less helpful for people like me who are weighing our own strategies. Also, it is possible that Kittie has blind spots which others can point out, so a win:win if he/she can take criticism constructively (and posts so far suggest this is the case)

For what it is worth I have shared my own approach including every investment decision made up until September 30th this year, its in a thread called "take a peek at my hand". The feedback has been extremely helpful & I'm grateful for it.