The Theory of Stock Exchange SpeculationCrump, Arthur
General
The Theory of Stock Exchange Speculation
Crump, Arthur
Speculation
“A friend of mine who was not with us, but who had had many
weeks’ experience at Monaco, had communicated a little plan
for an all but moral certainty of winning, which was founded
on the most scientific principles, but the only defect of
which was that the banks gave one no conceivable means of
carrying it into practice—a defect, indeed, which I believe he
himself had verified by leaving Monaco a loser, in spite of his
scientific plan. His idea was this:—It is obvious that even
where,—say at roulette,—the chance of the next ‘odd’ or ‘even’
is precisely one in two, or one-half, the chance of a run of
any given eight results in a _specified_ order,—such as odd,
odd, even, odd, odd, even, even, even,—will be only one in 2 ×
2 × 2 × 2 × 2 × 2 × 2 × 2, or one in 256. If, then, my friend
bethought himself, you could but steadily stake your money so
as to stake it against the arrival of this highly improbable
compound event, you would be sure to win. I quite agreed
in this extremely sagacious principle, but the difficulty,
unfortunately, was in the application of the theory. The bank
gives you no chance at all of staking your money against any
complex event. It admits only of your staking it in favour of
or against the simple elements of this compound event. And,
unfortunately, though it always remains highly improbable
that any specified run of eight will take place, as you can
only stake your money time by time on each single one of the
eight component elements of the event, and as, in each of them
separately, the chance is one in two, and not one in 256, it
is simply impossible by the rules of the game so to play as
to have the chances in your favour. I did, indeed, think of
requesting the bank to let me stake on the result of two or
three successive twirls of the roulette table, instead of on
one at a time, but since my French was extremely bad, hardly
adequate to protesting against the accidental raking up of my
money when I had actually won, and since, had it been better,
I had no hope that the authorities would comply with a request
so very unsafe for themselves,—the drift of which, indeed, the
croupiers might hardly have caught at the first suggestion,
but would certainly have suspected,—I reluctantly abandoned my
friend’s scientific receipt for winning, and was contented to
lose.
Public-domain text, read in full here on John Shaqi.
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