Binary Event Investment Style
I like to invest in binary events. That means go or no-go and nothing in between. That's what I liked about the ERHC concept, heads you lose what you put in, tails you make many many times what you put in. Either there's oil/condensate or there is not. Binary. No in-between. A 50/50 chance.
Same goes for things that are legislated: Either some activity is legal or it is not. Place a bet on that binary event.
What I like about binary events is that you can use the Monte Carlo Double Down Method on them. If you lose on a binary event, you double down each time until you win. When you finally do win you get all your money that you lost back plus a profit. If you don't believe me, you can run a spreadsheet on that theory. Heads you lose, tails you win.
So let's say you randomly got a terrible: H H H H T. So you place a $1 bet, and on the first heads you lose it. Then you place $2, and you lose that, then $4 and you lose that, then $8 and you lose that. Then $16 and you win $16 on tails. As you can see the $16 that you won is greater than what you lost ($1 + $2 + $4 + $8 = $15) or a profit of a dollar. This is always true no matter what random sequence you come up with, even with the worst case demonstrated here. Just make sure you double down when you lose.
The reason the Monte Carlo Double Down Method does NOT work on Roulette, black vs. red, is that first of all, there's the 00, which no longer makes the game binary, there are three outcomes, black, red, and 00. Second, you can't double down past the limit on the Roulette table.
That said, ERHC, internet gambling, and the like all have this "binary" aspect to them. If I lose on one of the investments, then I double down on another. They do not have to be related, no more than heads on one coin toss is dependent on tails on the other, there is no dependency or relation coin tosses.
But what you are suggesting is that there's an in between of "inconclusive" and that once again no longer makes this ERHC game binary. And so you are throwing the theory out the window. Boo. LOL.
Krombacher
