If you invest in multiple investments, in amounts inversely proportional to the level of risk, then in the long run you can expect a particular return (and, assuming you calculated the risk correctly, any difference is variance). If you assumed the investments never matured, it would make financial planning difficult.
A bet is not an investment. Especially one such as this. This is 100% risk. You're offering to pay out with only someone's word that they will pay. Reference my reply to Joel. One of those bets you can make reasonable assumptions on. One you cannot. Guess which one is which.
Every investment is a bet. Your estimation of this one is that it has 100% risk, meaning it is impossible that it will pay off. From your point of view there's no point investing at all and there is guaranteed to be no return.
No. 100% risk means nothing is guaranteed. You're right that every investment is a bet, but not every bet is an investment. In this case, especially, it can't be called an investment, except on Matt's end. He is investing a very large amount of money in his reputation (and Pirate's). Everyone else is risking smaller amounts of money, but no less their reputation.For what possible return? Double their money?
If Matt's reputation doesn't tank, that is.
Matt loses his bet and pays out: He loses money, but gains reputation.
Matt loses his bet and
doesn't pay out: He loses his reputation, but keeps his money.
Matt wins his bet: He gains money,
and reputation
Seems a pretty good deal, if he has the money to lose.
Matt loses his bet and pays out: Everyone else gains a little money.
Matt loses his bet and
doesn't pay out: Everyone else gains nothing, loses nothing. (Malinvestment based on this bet notwithstanding)
Matt wins his bet: Everyone else loses money
or reputation
Yeah. I know a sucker bet when I see one. Matt's a frigging genius.
