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posted by janrinok on Thursday February 12 2015, @11:58PM   Printer-friendly
from the if-it-feels-good... dept.

Neil Irwin writes at the NYT that financially literate people like to complain that buying lottery tickets is among the silliest decisions a person could make but there are a couple of dimensions that these tut-tutted warnings miss, perhaps fueled by a class divide between those who commonly buy lottery tickets and those who choose to throw away money on other things like expensive wine or mansions. According to Irwin, as long as you think about the purchase of lottery tickets the right way — purely a consumption good, not an investment — it can be a completely rational decision. "Fantasizing about what you would do if you suddenly encountered great wealth is fun, and it is more fun if there some chance, however minuscule, that it could happen," says Irwin. "The $2 price for a ticket is a relatively small one to pay for the enjoyment of thinking through how you might organize your life differently if you had all those millions."

Right now the Multi-State Lottery Association estimates the chances of winning the grand prize at about 1 in 175 million, and the cash value of the prize at $337.8 million. The simplest math points to that $2 ticket having an expected value of about $1.93 so while you are still throwing away money when buying a lottery ticket, you are throwing away less in strictly economic terms when you buy into an unusually large Powerball jackpot. "I am the type of financial decision-maker who tracks bond and currency markets and builds elaborate spreadsheets to simulate outcomes of various retirement savings strategies," says Irwin. "I can easily afford to spend a few dollars on a Powerball ticket. Time to head to the convenience store and do just that."

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  • (Score: 0) by Anonymous Coward on Friday February 13 2015, @12:04AM

    by Anonymous Coward on Friday February 13 2015, @12:04AM (#144414)

    It's essentially a tax. Perhaps, socially, we subconsciously think of the loss as a tax that just goes to the general good ;) It's an interesting way to get people to voluntarily pay taxes.

    • (Score: 5, Insightful) by bob_super on Friday February 13 2015, @01:22AM

      by bob_super (1357) on Friday February 13 2015, @01:22AM (#144438)

      It's more than just a tax, according to the people who built a massive city in the desert.
      Whether it's an escape from reality, the need to see the other side of the ocean, or all these things that don't fit mathematical logic, humans have these "what if/why not me" cravings. Lotteries are a cheap legal way to open the pressure relief valve on reality and its unfairness.

      As a side-effect, many people who believe they will eventually win the lottery are nice enough to view economic policy as if they were already rich.

      TMYK: if you live in the US, the odds of the Megamillion are similar to the Powerball. Powerball costs twice as much ($2 vs $1). Considering that both grand prizes are instant-retirement events ($40M and up vs $12M and up), you've got to be amazingly greedy to pay twice as much for each chance.

      • (Score: 3, Interesting) by TheLink on Friday February 13 2015, @03:03AM

        by TheLink (332) on Friday February 13 2015, @03:03AM (#144473) Journal
        But I argue it's not that illogical or stupid. Many of the calculations used to show it's dumb don't take into account a _finite_ lifetime and low social mobility.

        If you're some poor person stuck in some minimum wage job, your odds of ending up with > $100 million are about as close to zero if not closer. Now if you started your own business there's a higher chance of you becoming a millionaire or multimillionaire but the odds of getting >$100 million are still low plus the effort involved is much higher. There are also other risks involved- there are lots of people with failed businesses, not many sell books or give interviews on how they failed and failed again and still haven't succeeded[1].

        There are people who won the "genetic lottery" and have the energy and endurance to work 2 or more jobs and NOT die/break (to build up capital etc), and have other things right, but for the rest - what really are their odds of going from burger flipper to having hundreds of millions?

        So if you're poor and wanted to be merely normal "rich" don't bother with lottery tickets - maybe try to invest what little you earn. But if you want to be swimming in hundreds of millions of dollars within your lifetime, buying a powerball ticket is a rational decision (especially when the jackpot gets big).

        [1] As for those "success" advice, I'm sure you've seen some that say "don't give up", whereas others that say "know when to cut your losses", some say "focus on one thing" others say "run multiple businesses, don't be a one legged stool". There are valid points behind the different ideas, but you have to figure out which are applicable for the scenarios you're in.
        • (Score: 3, Insightful) by linuxrocks123 on Friday February 13 2015, @07:21AM

          by linuxrocks123 (2557) on Friday February 13 2015, @07:21AM (#144512) Journal

          If you are intelligent and born in a developed country, and even some developing countries, you have a good chance at a middle-class lifestyle if you do well in schools. Even in the US, where college is very expensive relative to many other places, there are scholarships, Pell Grants, and, in some states, programs such as HOPE [gacollege411.org], which, together, can make college a real possibility.

          If, on the other hand, you are less intelligent, there are a variety of blue-collar jobs which pay quite a bit of money and do not require a college degree. These take some research to find, but are not a secret. [forbes.com] (Note: please do your own research before planning your life based on a single magazine article.)

          Finally, if you think you need tens to hundreds of millions of dollars to be happy in life, you are likely incorrect, and will likely be unhappy even after winning the lottery. You probably should seek psychological counseling and determine what the real cause of your unhappiness is. There are many stories [forbes.com] about lottery winners who actually end up wishing -- in all seriousness -- that they hadn't won the lottery. The people who think they need millions of dollars to be happy are probably the same ones with so little emotional maturity that they let having a truckload of cash dropped in their laps ruin their lives.

          They are probably also the same people who don't really understand odds well enough to realize that playing the lottery is not an "investment". They are probably the kind of people who let the temptation of the lottery lead to gambling addiction. They need help from the state, and, instead, the state takes advantage of their disorder. There are people right now taking out payday loans to buy lottery tickets. There is nothing rational about what they are doing.

          If you want to be swimming in hundreds of millions of dollars within your lifetime, that's an okay fantasy to have sometimes. But it should remain a fantasy, and not a life goal, and indulging the fantasy by actually buying lottery tickets might be a sign that you need to take a serious look at your life and figure out what's making you prefer that fantasy to real life. At least, if I noticed myself doing something that irrational, I'd want to at least sit down and think about why.

          • (Score: 1, Insightful) by Anonymous Coward on Friday February 13 2015, @08:32AM

            by Anonymous Coward on Friday February 13 2015, @08:32AM (#144527)
            Yeah, why would some minimum wage burger flipper prefer a fantasy where he has 100 million bucks vs real life.

            Real great insight and rational thinking there by you ;).
            • (Score: 0) by Anonymous Coward on Friday February 13 2015, @03:30PM

              by Anonymous Coward on Friday February 13 2015, @03:30PM (#144627)

              When that $2 is worth about 15 minutes of work time?
              $2 can get you: 12 eggs, two loafs of bread, a box of cereal, 13 bananas, three cans of corn, or three pounds of potatoes. I am lucky enough to have done well enough in the genetic lottery for intelligence that I can realize this. I know others are not as fortunate and I feel bad for them.

              • (Score: 2) by Freeman on Friday February 13 2015, @05:14PM

                by Freeman (732) on Friday February 13 2015, @05:14PM (#144675) Journal

                If you catch a sale, you can get 6 pounds of Potatoes or more, but that's usually a seasonal thing.

                --
                Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
                • (Score: 1) by Anonymous Coward on Friday February 13 2015, @07:38PM

                  by Anonymous Coward on Friday February 13 2015, @07:38PM (#144716)

                  Also, discount vegetables and fruit that are about to expire. I didn't mention those or sales because the poor often do not reliably have the luxury of waiting to take advantage of those offers. Bus fares also add up if you try to get things at different stores.

              • (Score: 1) by calzone on Tuesday February 17 2015, @05:14AM

                by calzone (2181) on Tuesday February 17 2015, @05:14AM (#146007) Journal

                Where are you finding any loaf of bread for $2? Let alone 2 of them? Let alone bread actually worth eating that won't destroy your health?

                --

                Time to leave Soylent News [soylentnews.org]

          • (Score: 4, Touché) by c0lo on Friday February 13 2015, @09:01AM

            by c0lo (156) Subscriber Badge on Friday February 13 2015, @09:01AM (#144534) Journal

            You probably should seek psychological counseling and determine what the real cause of your unhappiness is.

            Yea, yea... Look, I promise that's the first thing I'm gonna do after I win the lottery.

            (large grin)

            --
            https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
          • (Score: 0) by Anonymous Coward on Friday February 13 2015, @08:43PM

            by Anonymous Coward on Friday February 13 2015, @08:43PM (#144733)

            playing the lottery is not an "investment".

            Bullshit, it can be a very successful investment strategy. [youtube.com]

          • (Score: 2) by TheLink on Saturday February 14 2015, @08:22AM

            by TheLink (332) on Saturday February 14 2015, @08:22AM (#144899) Journal

            They are probably also the same people who don't really understand odds well enough to realize that playing the lottery is not an "investment".

            Then there are a lot of other people don't realize that it actually becomes an investment when the jackpot goes past a certain amount, and the conditions and terms are favourable.
            See: http://www.businessinsider.com/heres-when-math-says-you-should-start-to-care-about-powerball-2013-9?IR=T& [businessinsider.com]

            Of course if more people realize this and start buying, the higher the jackpot will have to be.

            See also:
            http://www.independent.co.uk/news/how-to-make-a-killing-on-the-lottery-1322272.html [independent.co.uk]
            http://www.nytimes.com/1992/02/25/us/group-invests-5-million-to-hedge-bets-in-lottery.html?pagewanted=all [nytimes.com]
            http://www.forbes.com/sites/joshbarro/2012/03/30/can-you-ever-guarantee-a-mega-millions-win/ [forbes.com]

    • (Score: 3, Insightful) by arashi no garou on Friday February 13 2015, @02:24AM

      by arashi no garou (2796) on Friday February 13 2015, @02:24AM (#144454)

      Bullshit. A tax is compulsory, the lottery is not. If it were a tax, I would be forced to buy a ticket on a schedule set by the state, and if I didn't buy a ticket I would be subject to sanctions. The lottery, on the other hand, is a voluntary donation that provides funding above and beyond tax money to support (in my state at least) education and environmental efforts.

      • (Score: 2) by aristarchus on Friday February 13 2015, @07:39AM

        by aristarchus (2645) on Friday February 13 2015, @07:39AM (#144515) Journal

        Bullshit. A tax is compulsory, the lottery is not. If it were a tax, I would be forced to buy a ticket on a schedule set by the state, and if I didn't buy a ticket I would be subject to sanctions.

        This is why you fail. It is a tax, a stupid tax. Sort of like a "sin tax" that is levied on things like alcohol. Don't want to pay the tax? Don't drink! Problem solved. Stupid tax, don't want to pay the tax? Don't buy lottery tickets! Problem solved, except that since you are stupid, you cannot help but buy the lottery ticket, you must buy the lottery ticket, because you are too stupid not to! Now isn't this great! We do not need any sanction, we just take advantage of stupid people, the ones really bad with math and particularly probability calculations, and they not only do not need the threat of sanctions, they flock to the scam and then vote for Republican policies of tax cuts for the wealthy because they are just waiting for their number to come up. Stupidity is coercion, of the most insidious kind.

        One interesting aside to this, is the the lumpenproletariat tend to be in favor of what the 1% call "tort reform", limiting the damages that can be awarded to individual citizens who are victims of Corporate malfeasance. We could talk about "Hot Coffee", but that would only make the point. So when I come across one of these Fox News watching, Republican-voting Einsteins, and they start telling me how outrageous some court settlement was, I just say: "Good for them, that citizen just won the lottery! They are fixed for life!" And suddenly all resistant to the high-money settlements vanishes into a total lack of understanding of numbers, justice, or humanity.

        • (Score: 1, Flamebait) by hemocyanin on Friday February 13 2015, @09:36AM

          by hemocyanin (186) on Friday February 13 2015, @09:36AM (#144544) Journal

          Did you read the part where it's noted that the EV was $1.93 on a $2 ticket? Seriously, at a 7 cent loss I'd hardly call it a "stupid" tax -- that's just you being smug. I've had enough money fall out of my pockets without me noticing that at a 7c loss, I could buy loads and loads of tickets. Just dropping a quarter is almost 4 tickets. Hell, I've dropped dimes, _noticed_ that I dropped them, and didn't even bother to pick them up. Worse, I've spent many thousands of dollars on total crap in aggregate over my life -- you know, you buy something you think will good or cool and it breaks just after the warranty ends, or it never works at all and you totally forget to return it. Then of course there is the totally frivolous stuff I've bought -- my boat gets 1.75 mpg -- add that up at the $4.50/gal price over the last few years. Talk about burning money ... approx 90c per minute.

          Secondly, a ticket is whole dollar, which in today's world just isn't much. The world isn't like Farmer Boy where Alonzo can buy a whole pig for 50c anymore. Even at $7.35/hr, a person is making over 12c per minute -- about 8 minutes to earn a dollar, 16 for two, and in my locale minimum wage is pushing $10/hr -- about $1 every 6 minutes. Most people probably have more than a buck (covered in sticky crap) under their car seats just from it slipping out of their pockets.

          And yes, whenever these lotteries get over $300m, I'll buy a ticket if I remember to. That works out to two or three per year. I have a post-grad degree, qualify for mensa, make 6 figures, and even I enjoy the fantasies of what I'd do with the winnings. I totally expect not to win, but we're talking a few pennies here for some nice entertainment. Oh, and I'm so liberal I think Democrats would make Nixon blush.

          I guess my point is that people get their joy in all kinds of different ways. Things I've bought, you'd think they were stupid. There are things you bought that I probably wouldn't take if I was paid to have them. And you know what? So what. Live and let live. Belittling people because they buy stuff you don't understand -- that's what's stupid here.

          • (Score: 2) by aristarchus on Friday February 13 2015, @09:59AM

            by aristarchus (2645) on Friday February 13 2015, @09:59AM (#144545) Journal

            Did you read the part where it's noted that the EV was $1.93 on a $2 ticket?

            Ah! Fun with statistics! EV may be 1.93, but the AV is 0, as in total loss. Now if only the winners would share.

          • (Score: 3, Insightful) by mechanicjay on Friday February 13 2015, @07:01PM

            I find the $200,000,000 jackpots to be extraordinarily cheap daydream fodder. More entertaining than the $40 bucks it costs to go to movies these days.

            --
            My VMS box beat up your Windows box.
        • (Score: 2) by arashi no garou on Friday February 13 2015, @12:48PM

          by arashi no garou (2796) on Friday February 13 2015, @12:48PM (#144575)

          So what I'm getting from your rambling, nearly incoherent comment is "Duh I say it's a tax so it's a tax and you're a doodoohead!"

          Sorry bud, you're going to have to elaborate, and my that I mean leave the neocon conspiracy stuff behind and tell me again how I'll go to jail and pay fines for not buying that lottery ticket.

          • (Score: 2) by aristarchus on Friday February 13 2015, @06:53PM

            by aristarchus (2645) on Friday February 13 2015, @06:53PM (#144704) Journal

            OK, I will use smaller words to help you understand. You see, you don't have to buy lottery tickets. Why is that? Because you are smart enough to understand the odds, and if you do buy them, it is the mindless entertainment the FA says it is. My point is that if you were more stupid than you are, it might not be a choice, since you would not even be aware of what you really were doing. I have known people who's financial plan was "when I win the lottery". There are enough other comments making this point here already. Remember, it is not just about you.

            • (Score: 2) by arashi no garou on Friday February 13 2015, @07:29PM

              by arashi no garou (2796) on Friday February 13 2015, @07:29PM (#144712)

              You see, you don't have to buy lottery tickets.

              Thank you, you just made my point. You don't have to buy tickets (it's not compulsory), therefore it's not a tax. So you agree with me.

              • (Score: 2) by aristarchus on Friday February 13 2015, @09:07PM

                by aristarchus (2645) on Friday February 13 2015, @09:07PM (#144739) Journal

                Your point is missing my point. It is not a tax on _you_, but it is a tax on stupid people. Lets say a tax on alcohol is not compulsory, you can always just not purchase alcohol. If you are an alcoholic, however, this is not an option, so the tax is compulsory. See the analogy? But lets not start blaming the victims of these selective taxes, we should criticize the nation that deploys them.

                • (Score: 2) by arashi no garou on Friday February 13 2015, @11:53PM

                  by arashi no garou (2796) on Friday February 13 2015, @11:53PM (#144798)

                  It's only a "tax" in your mind because you are calling it a tax. Just because you wish something to be true so you can prove a point, doesn't make it true. If you call up the state tax assessor's office to discuss the lottery tax, they will explain to you that no such thing exists, and possibly call your mental hospital and remind them of your phone call limit for the month.

                  Grab a dictionary or wikipedia and look up the definitions of "tax" and "lottery". Here, I'll save you the trouble, first hit on Google:

                  tax /taks/

                  noun

                  a compulsory contribution to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions.

                  lot·ter·y /ˈlädərē/

                  noun

                  a means of raising money by selling numbered tickets and giving prizes to the holders of numbers drawn at random

                  If you don't like the lottery that's fine, don't play it, vote against it. But making up baseless facts to support a nonexistent argument is folly on your part. But hey, don't let me stop you making a fool of yourself.

                  • (Score: 2) by aristarchus on Saturday February 14 2015, @12:15AM

                    by aristarchus (2645) on Saturday February 14 2015, @12:15AM (#144806) Journal

                    But hey, don't let me stop you making a fool of yourself.

                    Thank you, your concern is warmly received!

  • (Score: 5, Interesting) by Covalent on Friday February 13 2015, @12:20AM

    by Covalent (43) on Friday February 13 2015, @12:20AM (#144417) Journal

    I understand the math. I understand the odds. I understand it's just an idiot tax.

    But I have now wasted $2 of my hard-earned money on a useless piece of paper.

    Why? Chalk it up to a terrible day at work, living in brutally cold Michigan, and the fact that I had to buy something at a drug store anyway. My daughters were delighted to hear about the tutors they would have on our yacht. About how they would be studying ancient Egypt...IN Egypt. And about how there would be tickets to the space station waiting for them, whenever we get around to building one for tourists.

    In the end, it was worth the $2...once. Now I have to work just a little harder to make sure at least some of that fantasy can become a reality.

     

    --
    You can't rationally argue somebody out of a position they didn't rationally get into.
    • (Score: 2, Insightful) by Anonymous Coward on Friday February 13 2015, @12:59AM

      by Anonymous Coward on Friday February 13 2015, @12:59AM (#144429)

      So you rented some hope for a few days for $2. You could have spent it on a beer, or a cup of coffee (or part of a cup of coffee depending on your barista of choice), on a new pair of shoelaces, on part of a ream of printer paper, a candy bar or two, etc, etc. Sometimes some hope or a dream satisfies your needs better than many of the alternatives (not as much as a beer, of course, because we're not talking about a $2 bottle with a genie in it).

    • (Score: 5, Funny) by Anonymous Coward on Friday February 13 2015, @01:16AM

      by Anonymous Coward on Friday February 13 2015, @01:16AM (#144435)

      > the tutors they would have on our yacht

      You are part of the imaginary 1%. Torches and pitchforks everyone.

      • (Score: 2) by tangomargarine on Friday February 13 2015, @07:20AM

        by tangomargarine (667) on Friday February 13 2015, @07:20AM (#144510)

        .01+i

        --
        "Is that really true?" "I just spent the last hour telling you to think for yourself! Didn't you hear anything I said?"
        • (Score: 2) by maxwell demon on Friday February 13 2015, @07:46AM

          by maxwell demon (1608) on Friday February 13 2015, @07:46AM (#144518) Journal

          No, 0.01*i

          .01+i would be complex, but not imaginary (it has an imaginary part, though).

          --
          The Tao of math: The numbers you can count are not the real numbers.
    • (Score: 0) by Anonymous Coward on Friday February 13 2015, @02:28AM

      by Anonymous Coward on Friday February 13 2015, @02:28AM (#144460)

      Well I bought tickets, just like I do every time the amount gets high enough that someone at work recommends a pool. Its like my co worker said. Its cheap insurance that I wont be the only one here when the rest of you strike it rich.

    • (Score: 3, Funny) by c0lo on Friday February 13 2015, @09:06AM

      by c0lo (156) Subscriber Badge on Friday February 13 2015, @09:06AM (#144536) Journal

      Now I have to work just a little harder to make sure at least some of that fantasy can become a reality.

      (says somebody wasting her/his time posting on SN)
      (don't shoot, I'm just kidding)

      --
      https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
  • (Score: 5, Insightful) by Anonymous Coward on Friday February 13 2015, @01:27AM

    by Anonymous Coward on Friday February 13 2015, @01:27AM (#144439)

    Math? Economics you mean. Right out of a model.
    There are so many items that we purchase that does not have inherent value other than enjoyment, or satisfaction of an itch. When my kids waste a dollar getting plastic toys out of the dispenser at the pizza parlor, I know that these toys will not be played with ever again, cannot be turned into other products, eaten, or even sold again (realistically). I let them buy them anyway because they are having fun. Buying a lottery ticket might be fun. The expected utility is having some fun. Expected utility drives our whole economy.

    or in other words, it is rational to realize that one is human with human weaknesses and needs, so it can be rational to buy useless items.

    • (Score: 2) by c0lo on Friday February 13 2015, @09:09AM

      by c0lo (156) Subscriber Badge on Friday February 13 2015, @09:09AM (#144537) Journal

      There are so many items that we purchase that does not have inherent value other than enjoyment, or satisfaction of an itch.

      Mate, just a warning: no matter what you say, you're not gonna convince me to buy an iPhone.
      (large grin)

      --
      https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
  • (Score: 5, Informative) by SuperCharlie on Friday February 13 2015, @01:54AM

    by SuperCharlie (2939) on Friday February 13 2015, @01:54AM (#144446)

    For reasons I won't go in to, I had to work at a convenience store in my very recent past. We sold all manner of lottery and scratch off tickets. I sold the all every day. Many many of them. I saw people scraping their last dollar buy them. I saw people on their paydays buying 10, and even 20 dollar scratch offs winning just enough to keep them buying them until they ultimately left broke. In the six months I was there I can count on one hand the tickets and scratch offs I sold to anyone who seemed they could or should afford them. I spoke with a few regulars and across the board they had no idea what the odds meant. Across the board, they thought that they would win the big money, and this is what is advertised, engrained, pushed, and believed. In my opinion lottery tickets and scratch offs are a deceptive, brainwashed theft from the poor. I saw it first hand.

    • (Score: 0) by Anonymous Coward on Friday February 13 2015, @03:43AM

      by Anonymous Coward on Friday February 13 2015, @03:43AM (#144479)

      The odds are deliberately obfuscated but they are published.

      Powerball is a good one to teach people how odds work. It says on the website 1 in 31.85. What does that mean to most people? Nothing. As they do not understand the mathematical term 'in'. I teach people what it means is if you buy 100 tickets you will probably (not always) win about 3 times or 1 out of every 32 tries. Those 3 times will probably be the lowest prize. The cost is 200 dollars and you get back 12 dollars on average.

      Use that method to teach people. As it also demonstrates you do not improve your odds by buying extra tickets.

      http://www.powerball.com/powerball/pb_prizes.asp [powerball.com]

      I buy one every few months because its a bit of mindless fun. But even the infinitesimal possibility is possible. It is a wildly easy way to gamble for a low amount (usually 1-2 dollars depending on which one is bigger). 2 dollars means very little to me anymore. The odds stink (~3%). But the closest place to gamble with better odds is about a 5 hour drive away...

      • (Score: 2) by c0lo on Friday February 13 2015, @09:12AM

        by c0lo (156) Subscriber Badge on Friday February 13 2015, @09:12AM (#144538) Journal

        But the closest place to gamble with better odds is about a 5 hour drive away...

        Well, you can always set up a stock trading account online.

        --
        https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
        • (Score: 0) by Anonymous Coward on Friday February 13 2015, @04:15PM

          by Anonymous Coward on Friday February 13 2015, @04:15PM (#144640)

          I did :)

          Up ~400k on 150k investment because I do not gamble I pick companies and mutual funds that make money and have low or reasonable debt for what they do :)

          Gambling is gambling. Picking long term stocks takes research. Gambling the math on average never works in your favor. With stocks you can see ahead of time which will have a yield and on average you can do better. You will have losers and winners. For example staying away from oil may have cost me tons of opportunity but it is a purely manipulated market (as Saudi Arabia has shown) meaning you are at the whim of some .01%er.

    • (Score: 0) by Anonymous Coward on Friday February 13 2015, @03:47AM

      by Anonymous Coward on Friday February 13 2015, @03:47AM (#144481)

      I agree.

    • (Score: 0) by Anonymous Coward on Friday February 13 2015, @01:24PM

      by Anonymous Coward on Friday February 13 2015, @01:24PM (#144586)

      > theft from the poor

      Really interesting comment. However, there are plenty of poor people who are smart enough not to buy lotto tickets.

  • (Score: 1, Informative) by Anonymous Coward on Friday February 13 2015, @04:59AM

    by Anonymous Coward on Friday February 13 2015, @04:59AM (#144490)

    I happened to be reading a few days ago about Massachusetts' Cash WinFall game, where special rules actually made the lottery an objectively good investment. When the jackpot passed $2 million and nobody won outright, it would get redistributed to lower tiers. As such, payouts during a so-called "roll-down" would be about $1.15 for every dollar 'invested', plus free plays.

    http://www.mass.gov/ig/publications/reports-and-recommendations/2012/lottery-cash-winfall-letter-july-2012.pdf [mass.gov]

    It's a government report, but it's well-written. What ended up happening with the game is that smart people assembled betting pools, and the pools had to compete with each other. It's rather fascinating reading.

    • (Score: 1) by Beryllium Sphere (r) on Friday February 13 2015, @07:35AM

      by Beryllium Sphere (r) (5062) on Friday February 13 2015, @07:35AM (#144514)

      One is that when the prize is distributed over time, it's the net present value and not the headline amount that should be used to calculate expectation value.

      The other is that the prize is taxable income.

      • (Score: 2) by maxwell demon on Friday February 13 2015, @07:53AM

        by maxwell demon (1608) on Friday February 13 2015, @07:53AM (#144519) Journal

        The other is that the prize is taxable income.

        That's interesting. In Germany, one of the attractions of the lottery is that the win is tax-free (of course, in the end it isn't because the lottery itself is taxed, and quite heavily so; it's just that you don't see the taxes).

        --
        The Tao of math: The numbers you can count are not the real numbers.
        • (Score: 2, Insightful) by monster on Friday February 13 2015, @04:19PM

          by monster (1260) on Friday February 13 2015, @04:19PM (#144646) Journal

          That's the other illogical, funny part of the lottery: When people fantasize about so much money they would get (like, 100$ million) and discover how much would they have to pay in taxes (like, 40$ million), they get all incensed about how much taxes they would have to pay instead of keeping their fantasies with the real value of the prize (60$ million after taxes).

          • (Score: 2) by Joe Desertrat on Friday February 13 2015, @08:02PM

            by Joe Desertrat (2454) on Friday February 13 2015, @08:02PM (#144724)

            That's the other illogical, funny part of the lottery: When people fantasize about so much money they would get (like, 100$ million) and discover how much would they have to pay in taxes (like, 40$ million), they get all incensed about how much taxes they would have to pay instead of keeping their fantasies with the real value of the prize (60$ million after taxes).

            I'm a millionaire! Suddenly I have an opinion on the capital gains tax.

            • (Score: 1) by monster on Monday February 16 2015, @07:32AM

              by monster (1260) on Monday February 16 2015, @07:32AM (#145532) Journal

              I'm daydreaming about becoming a millionaire! Suddenly I have an opinion on the capital gains tax.

              FTFY

  • (Score: 0) by Anonymous Coward on Friday February 13 2015, @07:35AM

    by Anonymous Coward on Friday February 13 2015, @07:35AM (#144513)

    Old friend, Bobby Martin (http://www.nytimes.com/2001/03/13/sports/sports-of-the-times-the-legend-of-the-line-in-las-vegas.html), taught me that when you you can put up a small fraction of your stack into a huge pot, go for it.
    There is also this: You are the result of of one sperm out of 200,000,000 to 300,00,000 getting into the egg in your Moms ovaries. We are hardwired to go for the long shot.

    • (Score: 2) by umafuckitt on Friday February 13 2015, @08:22AM

      by umafuckitt (20) on Friday February 13 2015, @08:22AM (#144524)

      There is also this: You are the result of of one sperm out of 200,000,000 to 300,00,000 getting into the egg in your Moms ovaries. We are hardwired to go for the long shot.

      You misunderstand the probabilities. You're assuming that the goal of the process was to produce you specifically against all odds. It wasn't the goal, of course. The goal of the process was to produce baby and the odds of that happening are more like 99%. So you're not hardwired for anything, you're just the roll of the die. I'll give you another example (a paraphrassed Feynman quote): "I walked down the street today and saw the licence plate EFT 7942. Wow, imagine the odds of that!" That's basically the same as your sperm analogy.

      • (Score: 2) by NoMaster on Friday February 13 2015, @12:51PM

        by NoMaster (3543) on Friday February 13 2015, @12:51PM (#144577)

        There is also this: You are the result of of one sperm out of 200,000,000 to 300,00,000 getting into the egg in your Moms ovaries. We are hardwired to go for the long shot.

        You misunderstand the probabilities.

        That's OK, he misunderstands reproductive biology too...

        --
        Live free or fuck off and take your naïve Libertarian fantasies with you...
  • (Score: 2) by tomtomtom on Friday February 13 2015, @10:03AM

    by tomtomtom (340) on Friday February 13 2015, @10:03AM (#144547)

    Another reason it can sometimes be rational to play lotteries where the top prizes are life-changing, and especially where they are expected to be only marginally loss-making for the average player, is the outcome in terms of utility [wikipedia.org]. The utility (to some people) of the life-changing 1 in 10 million jackpot may well be more than 10 million times the lost utility of the small cost (expected loss) of the ticket if you account for only the non-"life changing" prizes. Of course, this does not mean it is sensible to spend all of your money on lottery tickets, since the lost utility per dollar of spending all your money is also a multiple of that when considering he small cost of one ticket.

  • (Score: 2) by PizzaRollPlinkett on Friday February 13 2015, @11:35AM

    by PizzaRollPlinkett (4512) on Friday February 13 2015, @11:35AM (#144563)

    The problem isn't the odds, it is the fact that our society allows state-sponsored gambling. That's a message that people get. The country in which they live stands for their exploitation and poverty. We value gambling, exploitation, and poverty so much that our government profits from it. Are we really no better than that? Guess not. When I was growing up, I never thought I'd see this day.

    Now I'll leave the implications of using gambling money to pay for education to you to think about. Why would an education system which depends on gambling money teach math skills?

    --
    (E-mail me if you want a pizza roll!)
  • (Score: 0) by Anonymous Coward on Friday February 13 2015, @01:42PM

    by Anonymous Coward on Friday February 13 2015, @01:42PM (#144593)

    If I play, for the cost of a hamburger today, perhaps on Tuesday, I get to

          —Quit my job I hate
          —Pay for surgery to allow me to correct the letter on my birth certificate from M to F
          —Never need to feel physical circumcision pain again
          —Get out of the (legal, at least) way of female supremacists
          —Never again need to “mansplain” what Ada Augusta Lovelace wrote 150 years ago about why the fuck the fucking computer can't pass the imitation game (despite Turing's optimism).
          —Have access to cannabis or perhaps p. cubensis to end my alcoholism. I'm sorry I'm not perfect.

    These things could happen with even a single million. Another factor of ten? I don't know. Why the hell would you want to help me get weed?

    You want me to die, and so I am moving closer to it.

    • (Score: 0) by Anonymous Coward on Friday February 13 2015, @01:55PM

      by Anonymous Coward on Friday February 13 2015, @01:55PM (#144598)

      Although, of course, I don't play, because the odds are astronomically against any of that happening.

      Just dying is easier. Working for somebody else busy “mansplaining” for a living? Fuck it.

    • (Score: 1) by FlatPepsi on Friday February 13 2015, @04:11PM

      by FlatPepsi (3546) on Friday February 13 2015, @04:11PM (#144637)

      I understand the value of buying a few hours of daydreaming for $2. Winning would solve a number of financial problems, including having to work a job that, at times, I don't like.

      The list you presented, I'm sorry to say, isn't an ideal candidate for money to fix. Looking at celebrities, I'm inclined to say that money just might make your life a whole lot worse.

      I wish you well, and hope you find solutions. I'd offer suggestions, but public forums aren't the best place for those conversations...

    • (Score: 2) by tangomargarine on Friday February 13 2015, @05:26PM

      by tangomargarine (667) on Friday February 13 2015, @05:26PM (#144680)

      Why the hell would you want to help me get weed?

      You want me to die, and so I am moving closer to it.

      Too bad you guys didn't add a WTF mod.

      --
      "Is that really true?" "I just spent the last hour telling you to think for yourself! Didn't you hear anything I said?"
  • (Score: 1) by GeorgeScuttles on Friday February 13 2015, @03:12PM

    by GeorgeScuttles (4499) on Friday February 13 2015, @03:12PM (#144623)

    To parallel the lottery's big win, consider a man in prison for 65 years, given an opportunity for a 1 in 282 million chance to get out tomorrow. All that man has to do to be eligible is to skip eating one meal. The worse the conditions of the prison, the more likely the man will take the offer. The better the conditions of the prison, the less likely. In fact, if prison is better than the outside world, a rational agent would never take the offer.

    Using this, it's no wonder that the poor and those in horrible jobs buy more lottery tickets than the rich (who depending upon richness may not even buy them at all).

  • (Score: 3, Insightful) by gidds on Friday February 13 2015, @03:25PM

    by gidds (589) on Friday February 13 2015, @03:25PM (#144625)

    "The $2 price for a ticket is a relatively small one to pay for the enjoyment of thinking through how you might organize your life differently if you had all those millions."

    And it's not possible to think that through without paying for the privilege???

    Blimey, I thought I had little imagination...

    --
    [sig redacted]
    • (Score: 0, Disagree) by Anonymous Coward on Friday February 13 2015, @05:07PM

      by Anonymous Coward on Friday February 13 2015, @05:07PM (#144672)

      Best sig ever!

    • (Score: 1) by twistedcubic on Friday February 13 2015, @07:32PM

      by twistedcubic (929) on Friday February 13 2015, @07:32PM (#144713)

      I disagree. Compare the group of students who pay an application fee to apply to Harvard, versus those who don't. If you don't apply, can you entertain the idea of being accepted?
       

      • (Score: 2) by gidds on Saturday February 14 2015, @11:42PM

        by gidds (589) on Saturday February 14 2015, @11:42PM (#145081)

        I don't know what the figures are like for entrance to Harvard, or Oxford or Cambridge, or whatever the elite institution is in your neck of the woods, but I bet they don't get tens or hundreds of applications for each place!

        And once the chance of winning becomes non-negligible, then the fee starts looking more rational.

        --
        [sig redacted]