odds and percentages

20060415, 15

Odds can be misleading, and percentages do not tell the whole story. As an example, if one were to play at quarter poker and brought US$25 to the game, then leaving (after several hours) with US$42, the rate of return seems excellent–68%. Nevermind that my nephews could have poked holes in this scenario while yet in 2nd grade–the irritant for me are the unknowns, the variables, the chafing rub of beginners’ luck, luck of the draw or the desire to “make” money

This is where the odds become misleading. Given any scenario, with all the odds factored into a most nearly practical decision, the percentage can be calculated to create a choice-point. I–and probably you–are just not smart or dedicated enough to complete such factoring and calculations, so you had best be playing for the fun, and not with your college tuition, nor with your kids’ lunch money. Sa-ve?

Same goes for all the real estate flipping that seems to be going down in Atlanta. Go ahead with your real estate speculation, but hedge your bets. Buy only properties you would actually love to live in for twenty years. I–and probably you–are not nearly dedicated nor smart enough to factor in all the calculations that will justify the sort of home loans people are assuming each and every day in the ATL. Besides, if you buy what you truly love, maybe that will help improve the startling lack of quality and reduce the boring homogeneity of the housing product in the city.

Happy tax weekend?

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