No interest in the theory of interest

I have a mathematical and IT background but I was already interested in Finance even when I was younger. I was already watching the Business Channels back when I was 9 years old (particularly Bloomberg and Asia Business News-now a part of CNBC). I just love watching the stock market indices and the currencies going up or down. I know that it is about people making money if they do the right trade but I never really knew anything more about it. I even read the business section first of online news portals. I wanted to major in Mathematical Finance back then but I lost interest after taking up a Theory of Interest class. I just decided to major in the abstract world of Pure Mathematics and functional analysis.

I actually lost interest in the financial world after college since I entered the academe. After obtaining my Master’s degree in Pure Mathematics, I decided to get a breather and join the Corporate world first to be sure if the academic life is for me. I was accepted in an IT Company and worked there from 2008-2011. I transferred to a Financial Institution’s IT company in 2011 and I was assigned at the Securities Group. I learned a lot about trading and understood a lot of things because of the less bookish and formal approach to concepts though I quit that job after 11 months since I really do not like the IT stuff that I am doing there. I transferred to another IT firm and enrolled at the PhD Mathematics program of my University. I still watch CNBC and Bloomberg everyday and I now have a better understanding of how the financial world works.

I now have the tools and knowledge on how to play the finance game for my money grow. I don’t think I would pursue Financial Math even if I were given the choice to go back in time. I would still prefer Pure Mathematics.  There are some things that you can learn even outside the classroom if you really are interested.

 

Sic Bo Strategy Small/Big and Odd/Even – Game Theory at Work

Sic Bo is a chinese dice game wherein you have three dice and you have to place your bet on the board and you will win if whatever combination you place your bet on appears (odd,even, big, small, triple etc.).

(photo courtesy of letstalkwinning.com)

This reminds me of the game beto-beto every fiesta. When I went to Resort’s World a couple of months ago to go to Opus, I saw this game with a big dice in the middle and computers everywhere where you can bet. The minimum bet is PhP25 and the maximum bet is PhP2,500.  I thought to myself how can someone win this game and what betting strategy should they use? I will just look at the Odd/Even and Small/Big

Looking at the Small (sum is 4 to 10 with no triple) / Big(sum is 11 to 17 with no triple) or Odd/Even bets, the best way still is to use the Martingale Method wherein one has to double their initial bet if they lose and they go back on betting the original bet. The reason behind this is that you will win the same amount as your bet and doubling it every time you lose then by the time that you win, you will win your original bet.

Example: You bet on Odd for PhP25 but the result was even, you bet again on Odd for PhP50 then a triple appears. On your third bet, you placed PhP100 on Odd and the result was odd then you win PhP100. So now, you have PhP200, your total bet was PhP175, so you won PhP25. Every time you win, you are guaranteed PhP25.

I suggest that someone who wants to play this should have at least PhP3,175 pesos and must be willing to lose that money. It would have been great if there was no PhP2,500 maximum bet limit because if someone let’s say has PhP25,175 then they could bet at least ten time before losing all their money. With the limit someone could bet PhP1,600 at the maximum with PhP25 base bet. There is a possibility that your bet might not be the result after 7 attempts. If you are winning then tell yourself that you will quit after winning a certain amount of money so that you will not lose say PhP1,000 or PhP2,000.

This Martingale method is not fool proof but is the best of all the methods for Odd/Even and Big/Small bets. There is still a possibility that you will still lose your money but at least this method increases your chances of winning.

As they say, the house always wins. Always be prepared to lose. I have yet to meet someone who became a millionaire without losing it all at the Casinos. And finally, do not borrow money to feed your addiction. At the end of the day your money is better off in your savings account or mutual fund account.

I know this post is contradictory to my previous posts about personal finance but hey this is Mathematics at work. Can you blame this math student for trying to solve this problem?