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Incomplete or inaccurate analysis
Posted By: NA In Response To: Real-World Businesses (MathProf)
Date: 22 Dec 01, 5:36 pm
In Response To: Real-World Businesses (MathProf)
"I believe the failure rate for start-up small business is very high. I forget the statistic, but I think it was something like 90%. That is, most people who start their own business fail. People who start with a high RoR may actually be at less risk than those who start conventional business."
You're comparing AMATEUR entrepreneurs with PROFESSIONAL Bj players. The rational expectation theory applies to neither, not all players and business guys are equal. There specialty is different too, put an oil tycoon to run casinos and ev changes. You cannot calculate ROR without a confident ev estimation.
"BTW, I like you suggestion of increasing your bets as your bank increases, but at a slower rate, so that your betting fraction decreases."
I suggested this before with by combining CAPM model in finance with the life cycle investment theory. Reference is my debate about Markovs chains and Brownian diffusion with "The Mayor", post titled "Graduating from Blackjack". Maybe nobody understood me. I have the paper with the mathematical proofs to show that increase ROR/a declining Utility function.
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