Talish Girwarna was having a shower one morning not long ago. “I was unemployed then,” he told me this week, “and I was wondering to myself how entrepreneurs get rich. Then I got this idea.”
“I asked myself, ‘what does everyone need?’ and the answer was simple. Everybody needs money. So, yes, this was the obvious thing.”
For background, Talish is 33, has a young family, lives in semi-rural SW Ontario and now has a gig working in a metal fabrication shop. He has no experience or training as a financial guy. He has no investments. No income other than the factory job. Well, until now…
The big idea was crowdfunding. Talish figured that if people took all the money they piddle away on lottery tickets and, well, gave it to him that he could not only look after his own future but help to make some people into millionaires. And so was born The Retirement Fund.
This is the pitch
People helping people to become millionaires.
At The Retirement Fund our goal is to harness the power of selflessness. People are generally kind, giving, and not afraid to help others. We’ve all seen this in many different areas all around the world. An average person becomes a local hero, someone donates a large amount of money to a good cause, or strangers helping strangers in times of need, distress, or disasters. These represent just a few out of the many, many examples of the kindheartedness of people.
For the average income person, living life could sometimes feel like an unending chore. The same routine day in and day out to maintain what they have, keep food on the table and a roof over their heads. The Retirement Fund wants to help people take control of their lives, at least financially.
The way we can accomplish this is through technology. Before there were crowdfunding websites there were fund raisers and donation events. But it’s easier now more than ever to get and give people money. It can happen in an instant, and we at The Retirement Fund want to be the catalyst for that.
At The Retirement Fund we put a few things together to make this possible. Simply put, we are a crowdfunding Website that collects money from all subscribers, and everyone who invests gets paid.
It’s a compelling message: People helping people. Kindheartedness. Selflessness. Everyone benefits. How could this not be a good thing? Talish the local hero.
He wants you to give him at least $5 which goes into a PayPal account (in his own name, not an incorporation or trust). Multiple ‘investments’ and recurring deposits are encouraged. Then your name goes on a list. After 200,000 people pony up their five bucks (less 5% commission) the first person on that roster gets a big pot of money. It’s a classic pyramid scheme. Here’s his explanation of how you get your million:
“Your fund grows the same way that a lottery does. Your investment along with everyone else’s goes into a pool and once $1,000,000 is reached, the person at the top of the list is paid out and everyone moves up one spot. The more people that invest, the faster the $1,000,000 goal is reached. That also applies to the amount of money people invest. Meaning the more money one invests, be it one time or over a period of time, the faster the $1,000,000 goal is reached. There is an option to re-invest on a monthly bases automatically if you like as well. It’s like playing the lottery and knowing that you will win.”
Talish equivocated when I asked how many people had signed up in the few weeks his site’s been operational. He’s been promoting it hard – on Facebook, Twitter and even posting free ads on Kijiji. What about the money collected so far? No answer. And how about regulatory oversight or protections for the ‘investors’? “From my research,” he says, “all I needed was a PayPal account and then to build a site.”
Not so fast. The Retirement Fund sounds institutional, but isn’t. It’s his sole proprietorship, without any responsibility to people forwarding payments. And while that’s not uncommon with crowdfunding sites helping people out of tragedies or raising money for charitable causes, it’s different when the donation is called an ‘investment’ with the promise that ‘everyone who invests gets paid’. The factory guy may have strayed onto regulated turf.
There are rules for crowdfunding when it comes to financial products, Instrument 45-108 allows it, but the issuer needs to adhere to strict limits, plus provide every investor with an offering document, “that contains, among other items, the aggregate minimum proceeds of the offering, and a certificate stating that there are no untrue material statements in the Offering Document.” And this, too:
- It must file a Report of Exempt Distribution on Form 45-106F1, together with the Offering Document and any additional materials within 10 days after closing of the applicable distribution; and
- It may not close any distribution unless it has: (i) raised the aggregate minimum proceeds described in the Offering Document, and (ii) received from each purchaser a risk acknowledgement form which confirms the purchaser’s understanding of the risks disclosed in the Offering Document.
- In addition, in Ontario only, non-accredited investors may not invest more than $10,000, and accredited investors may not invest more than $50,000, in all securities offered under MI 45-108 during any calendar year. Ontario requires each purchaser to confirm compliance with these investment limit rules on Form 45-108F3.
Hmm, and how would the CRA deal with someone at the top of the list being sent a cheque for a million? After all, it’s not inside an RRSP. So the funds would be taxable income. Fintrac might also be interested, since crowdfunding can be a dandy way to wash cash.
“There’s a caste system everywhere,” Talish argues, “and all I want to do is make a level playing field. I’m an ideas guy. All I want to go is get people to invest so I can make them richer, and me, too.”
What if he raises $900,000, not enough to send a million to anyone topping his list?
“The site says there are no refunds. My model is a lottery, so it’s the same as when people buy tickets. I just put it into a retirement fund.”
So, Talish, I ask, how is your own retirement plan going?
“Not so good. Because I’m busting my ass working, and I’d like to be home in my house with my family.”
Five bucks at a time.
127 comments ↓
This idea will die before it’s first birthday. It’s a horrible plan fraught with potential legal challenges. Plus, good luck finding 200k people willing to trust you with $5.
No thanks. God only helps those who help themselves. I’m not religious, just think there is a valid point in the quote. Also, is Talish at the top of that list? Wonder wonder. Hmmm…
I suppose his name is first on the list. Nice Try Talish.
Crowdfunding campaigns that I’ve read on this blog:
– Vancouver kid wants your money to repair his investment condo
– Calgary couple’s house lottery
But I think this one takes the cake.
Garth, you left out the most galling part. His website lists management fees of 5%, plus transaction fees of 2.9% + $0.30 per transaction. In your first year under “management”, you’d be paying 13.9%(!) in fees on a $5.00 contribution. Or, if the transaction fees are captured as an up-front charge, 12.75% on $5.45 of capital. I hope the regulators give this bozo what for.
At least with those stay-at-home mom pyramid schemes, you get some snake oil cosmetics or cleaning products in return.
C’mon Garth, where do you find such idiots?
This is so ^%&&& ed-up. Anyone contributing to this gets a premium membership in a greaterfool club. This is not what crowdfunding should be used for.
There’s a sucker born every minute; Talish isn’t even claiming to be an influencer and promising to let you watch as your contribution er investment is used…
https://www.cosmopolitan.com/uk/entertainment/travel/a28113945/two-instagram-influencers-gofundme-holiday/
So if you’re 2nd on the list, you need to wait for 400,000 people to signup.
But, if you’re the 40,000th person to sign up, you need to wait for 8,000,000,000 people to signup, or greater than the entire population of Earth. So nobody
Something tells me this guy has his wife as #1 since the only person who has a chance of seeing any money. And that’s only if the first 200,000 people are oblivious.
UNREAL – Talish needs to get REAL before life passes him by. Here is one idea – stop thinking up dumb ideas in the shower!
No doubt Mr. Girwarna-Ponzi’s got a mitt full of 45-106F1 forms and he’s busy filling them out as we doubting Thomas’s crap all over another brilliant idea.
Just another day of slamming the door in the face of financial progress here at greaterfool.
back in the day this was called a pyramid scheme.
Well actually Talish’s deal is probably more sound and less risky than investing in the stock market and ETFs right now
I like the selfless aspect of the plan, and am always encouraged when someone leads by example.
I wonder if Talish will send me $20 cash to demonstrate his own selflessness? I’ll use it to buy myself something frivolous.
Talish, if you’re reading this, what do you say? Thanks.
People will believe what they want to believe. How many people think they are financial wizards because their portfolios have risen 10% in the same time the market has gone up 20%? Like most Canadians I doubt Talish owns a calculator.
This guy is a true capitalist.
Rather than going on welfare, he goes out and makes things happen.
But it’s not for everyone.
Gotta be creative and willing to take your lumps.
Some would claim Talish is a brilliant ideator; others would argue that he’s conceptualizing nothing of use to anyone but himself, and is just another arrogant, self-serving, selfish and lazy parasite feeding off the large pool of single-cell organisms in today’s society.
Guess he’s got luck on his side though, cause they say there’s a sucker born every single minute.
LOL, talk about a pyramid scheme. Some people are just ridiculous.
Retire a millionaire!!
How do we do it?
VOLUME!!!
#10 Highlander on 08.09.19 at 1:01 pm
UNREAL – Talish needs to get REAL before life passes him by. Here is one idea – stop thinking up dumb ideas in the shower!
///////////////
Yeah! What he said.
I can think of better things to do in the shower.
Sounds to me like Talish is the reincarnation of George C. Parker.
$5 huh, and if you believe that, I have a bridge to sell you.
#13 Dog Breath on 08.09.19 at 1:09 pm
Well actually Talish’s deal is probably more sound and less risky than investing in the stock market and ETFs right now
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Haha- if you are Talish, then yes, definitely less risky. His only risk (aside from regulatory) is a bruised ego from ridicule.
I’ll contribute: Talish, you’re an idiot.
Aside from the obvious scammy parts, how does investing more than $5 make any sense?
If you invest $5 once, then you are on the list, but any subsequent investments don’t change your position relative to anyone else on the list so it’s completely useless, right?
I’m actually a little disappointed that this is legal. IMO there needs to be a little more “common sense” in law so that even if you find a loophole that allows for legal theft you can still be shut down.
It is not crowdfunding.
It is a classic pyramid scheme, i.e fraud.
Considering the average intelligence of the ‘investors’ who see their most likely retirement coming from a lotto win, it/the arrival of such schemes was way overdue.
It is so typical for poor, undeveloped countries.
Of course no regulator will address it. They are busy chasing doctors and small businesses.
Have you seen the lotto sales skyrocketing lately? It is pretty much the same thing without the ‘guaranteed’ part.
Fun in the mental institution.
.
If he advertise his scheme on Lower Brainland, he might get quite a few followers….
At least Talish isn’t Sock Boy’s finance minister. Yet.
Maybe Talish should read this:
https://www.ctvnews.ca/canada/alberta-police-say-gifting-circles-were-a-pyramid-scheme-1.4411044
Hey Talish, you want my change?
Real change comes from within!
I hope he understands how to sell short once the 2020 election is over. Granted the last 10 years the dumbest of the dumb have made a lot of money as most of the “smart money” in the hedge funds went insolvent.
Ah the dream of getting wealthy for nothing. Sometimes I think it’s the only thing that keeps most people from going full Manson.
Re: #13 Dog Breath on 08.09.19 at 1:09 pm
All you have to do is short gold at the start of May next year. Unless Trump is impeached before then it’ll be like stealing money. Do what you want but I’m betting the farm and then some. I’ve heard about one world currency taking place around the end of 2019 (sdr’s) but I think the world’s elites will wait to see who wins the 2020 election first. I’ll be covering around the end of September next year.
The Plunge-O-Meter is up
http://www.chpc.biz/plunge-o-meter.html
It remains interesting to note that the combined average sum price of a Vancouver, Calgary & Toronto condo is currently 42% (no typo) more expensive than a median priced Montreal SFD.
Ex-Calgary, the sum is 73% more expensive.
Meanwhile, Montreal’s median priced SF Detached house price reached a new peak price (2nd month in a row)
Sounds like a Ponzie without the Pilates….
Just makes me wanna kiss that beautiful face forver
#32 Brian Ripley on 08.09.19 at 3:10 pm
Pretty much summary of the intellectual level of the herd living in GTA/Vancouver.
Like this ‘advice’:
https://ca.finance.yahoo.com/news/2-top-high-yield-tsx-190038214.html
This puts the 12-month trailing price-to-earnings ratio at roughly 8.7, which is pretty cheap considering the strength of the Canadian economy and the country’s strong employment level.
the whole strength of the economy – the whole 1 % NOMINAL growth with understated inflation, in reality shrinkage of 4 + % when considering real inflation/M2 growth + something
As for the country ‘strong employment market’ we just lost 69 k full time jobs in a single month, that with ’emergency’ close to zero rates!
Buy up sheeeeeeeeeeeeeeeeeeeeple.
I went for a leisurely dinner with a friend…we had a few appy’s and a few drinks. We were about to order our dinner and our waitress informs us that her shift is ending and if we an settle our bill.
She passes our bill and a credit card machine on the spot – found it rude and disruptive to our evening. Give me give me give me my Tip.
Ruined the flow of the evening – we decided to just have dinner elsewhere.
One of the larger pyramids was hatched by a lady in Barrie, Ontario back in the 1990’s. It quickly spread into SW Ontario with operatives, and knew a leader there. I told her it was all a fraud, and to get out, but these women all live in denial. There was about $1 million outstanding, and one lady wanted her money back, and most of them were professionals. The money never came, so she went to the cops. This is when all hit the fan. My lady friend worked for a high level profession, and her boss arranged for employment in Switzerland to lie low for 6 months, and then come back.
Hopefully Talish will keep us posted as the CRA just got an anonymous message with a link to his site.
Stats Can job losses
Wait for Dolce to give his view of the real figures adn trend.
Remember, the jobs number is always a statistical estimate. Seasonally adjusted. Not a count. Subject to statistical random errors plus other errors if the sample is not representative and if the questions sort of invite lies or are just confusing.
This is just a revised Ponzie designed to minimize the risk of ending up in jail.
He hopes because it’s only 5.00, that many will say “what the hell” and send him a fin. When his website suddenly disappears and no one ever gets paid, he hopes (because again, only 5 bux) no one will bother complaining to the authorities, and he’ll ride off into the sunset with the proceeds.
That’s it in a nutshell. How can I defraud people of a pile of cash without them giving a rip when I take off with their “investment”.
One thing is for sure, not a single one of his math challenged “investors” will ever see a dime from this douchebag.
Think of the nice pile of identities he will accumulate in the process…
#99 Smoking Man on 07.31.19 at 1:46 am
I liked the link and I am not a C&W type of guy – https://youtu.be/avyZ5V2YjwI y – I am several days behind on reading comments.
Today’s announcement of jobs – I am struck by the loss of private sector jobs offset by gains in the public service yet salaries rise by a lot. It makes me wonder about the public service sector of our economy. Just what are those public servants contributing? I see a hoard of taxes being levelled on “wealth”.
We pulled life support on my mother when the doctors declared she was brain dead from her stroke. They said she would die within a few days so I took a leave to sit by her bedside hoping for a miracle. She lived for 4 weeks in a coma. When I needed a break, I would go outside for a smoke and watch the ambulance deliveries. On weekend nights it was mainly guys hurt but then the rest of the time it was old, overweight women – sometimes they called a few guys to lift the gurney. Small wonder that health care costs are going through the roof. I noted that many seniors in Alberta downsized to live near a hospital.
Alas, I soldier on. NGD announced a public offering and I decided to buy on the open market instead – prospects look good for a short term hold. CEE is still my favorite though there is nothing wrong with the big boys. I am still looking for more preferreds – I see stagflation coming so I am hesitant. I think my best course of action is to buy down debt to use later.
I’d rather have a small ownership stake in the Royal Bank of Canada.
They’re a much more honest and open outfit and people are happy to pay them money because they actually provide a valuable service to people who give them money (namely banking services).
They earn about $33 million a day (last I checked anyways) and I’m happy to get a small piece of $33 million a day.
I’ll keep on buying RBC shares over my lifetime.
Hopefully, by the time I’m 60 or so, I’ve got enough RBC shares that I make $20,000 or so quarterly and I can just retire.
No guarantees in life of course, but this is a better and more legal approach than what this snake oil salesman is selling.
I’m pretty sure about that.
Very interesting post & a learning experience as always. About the crowdfunding investing rules, would they apply to situations like the home ‘lottery’ scenarios I’ve read about?
#18 Cici on 08.09.19 at 1:36 pm
Some would claim Talish is a brilliant ideator; others would argue that he’s conceptualizing nothing of use to anyone but himself, and is just another arrogant, self-serving, selfish and lazy parasite feeding off the large pool of single-cell organisms in today’s society.
===================================
I’m leaning towards “parasite”. He’s producing nothing of value or use. At best he’s running a private lottery, which the government also frowns on (since it would eat into their monopoly on gambling – I remember when gambling was considered immoral and we had laws against it). At worst he’s an outright con artist, scammer, and pyramid scheme operator. A transparent Bernie Madoff, if you will.
Government Bond Supply and Demand
The general rule of supply and demand would suggest that as governments supply more bonds (borrow more) the price would fall meaning the interest rate paid would rise. With a given pot of bond investors, a bigger supply of bonds flooding the market should mean the rates have to rise to attract investors.
Not happening.
In part because a huge portion of the bond investors have to allocate funds to fixed income so they invest just as much even as the yield declines. They want the stability etc.
But they could shift to shorter and demand higher rates for longer terms?
Possibly there is also massively more money in investor hands that is easily sopping up the governments larger supply of bonds issued?
In part it is of course central banks becoming bond buyers sopping up supply. This is money printing, central banks lending money to government by printing electronic money to buy bonds from banks and investment dealers. This is supposed to cause inflation fears which ought to make other bond buyers demand higher yields.
I am perplexed by this.
We all thought rates would finally rise. Instead they look to sink possibly even to record lows.
Why no long term bond investor strike (even if they just move to shorter?)
#37 Dave on 08.09.19 at 3:26 pm
I went for a leisurely dinner with a friend…we had a few appy’s and a few drinks. We were about to order our dinner and our waitress informs us that her shift is ending and if we an settle our bill.
She passes our bill and a credit card machine on the spot – found it rude and disruptive to our evening. Give me give me give me my Tip.
Ruined the flow of the evening – we decided to just have dinner elsewhere.
==================================
You’re right, that’s a ridiculous system. Why should the staffing of the restaurant become the customer’s concern or issue? I don’t blame the waitress, but I do blame outfits that operate that way. Was it a big chain place?
Had the great pleasure of visiting sunny Lunenburg today, and managed to find Garth’s new digs. Garth, you are a lucky guy!
Why give a criminal free advertising? You could warn against this crap without naming him or his fund.
Well if the guy is such an idiot why everyday in media is a story about people get swindled for money.
All of you are like literate so how come this is happening.
Greed is blinding people at any age and greed is larger than God on this shores.
No collies in that picture! And you call this a dog blog.
F72ON
Homer Simpson: “Son, if you really want something in this life, you have to work for it. Now quiet! They’re about to announce the lottery numbers.”
Labour Force Survey June –> July 2019. Again, 1 data point does not make a trend (well, 2 so far).
Make conclusions on your own, just the data follows.
Whether Seasonally Adjusted or Unadjusted, the overall Canadian EMPLOYMENT numbers were NOT GOOD overall. Only GOOD NEWS was that Full-Time went up (Unadjusted numbers).
-All Numbers are x 1,000
-Unadjusted is the raw data gathered & not the statistically “massaged” Seasonally Adjusted data which StatCan quote and the MSM parrots, any rounding errors blame StatCan:
EMPLOYMENT (Full-Time + Part-Time)
Seasonally Adjusted -24.2
Unadjusted -109.10
FULL-TIME EMPLOYMENT:
Seasonally Adjusted -11.6
Unadjusted +138.1
PART-TIME EMPLOYMENT:
Seasonally Adjusted -12.6
Unadjusted -247.2
Here is the above along with the monthly data, unemployment, population and labour force size:
https://i.imgur.com/sa64dTC.jpg
The above, worse than May –> June 2019:
https://i.imgur.com/7IzjxE4.jpg
————————————————
I imagine some of you are wondering how the Provinces did.
These Provinces LOST jobs:
Nova Scotia, New Brunswick, Ontario, Saskatchewan, Alberta and BC.
Manitoba was slightly negative (call it break even).
The only “star” here was PQ with a +16.6 Employment gain.
Here are the detailed numbers (Employment, Full-Time, Part-Time & Unemployment):
Nfld, PEI, NS, NB
https://i.imgur.com/tnCiui1.jpg
PQ, ON, MN, SK
https://i.imgur.com/eCCBebe.jpg
AB, BC
https://i.imgur.com/wmcbElZ.jpg
————————————————
To replicate/verify the above on your own, slice and dice at:
https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=1410028701
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#40 Shawn Allen
Thanks for reminding me.
Go get em Talish – don’t listen to the stoggie crowd here – their boring as hell – life is short so go for it
Garth, he told you this story so that you would share it. No such thing as bad publicty. “As seen on the greaterfool website”.
If CBC calls you for comments, please decline.
$5 for a chance to retire rich? I’ll let a Mr. Burns quote reflect my thoughts on this….
“One dollar for eternal happiness? Mmmm … I’d be happier with the dollar.”
Where’s that barbaric cultural practices tip line number?
HAHAHA! How…who…wha….huh?
If I can quote the doped up kid after oral surgery “ Is this real life?”
He’d be a lot smarter if he also offered $100 for every 50th person. Then again, that would probably get the regulator’s attention a lot more quickly.
#7 Millennial on 08.09.19 at 12:43 pm
C’mon Garth, where do you find such idiots?
*************
The Internet of course! Hopefully not our neighbours.
In general, (real estate, house poor, retirement) we must be passed the denial stage and right into despair.
The toothless tiger, aka FINTRAC, will be all over this just like all the money laundering arrests/convictions they have amassed in the Lower Mainland LOL
There are more than enough millenials out there schooled by yuppies with million dollar mortgages for htis to actually work..
How is this different than voting for “he who shall not be named” in Ottawa
“Scientists will eventually stop flailing around with solar power and focus their efforts on harnessing the only truly unlimited source of energy on the planet: stupidity.
I predict that in the future, scientists will learn how to convert stupidity into clean fuel.” – Scott Adams
This is one example of why real esate at late cycle after 10 years of zero bound and a stupid federal government is a horrible idea.
Broke cities…..
Calgary just voted to buld a new rink and give 275 million to to the owners after jacking small business commerical property rates by 200-300% YOY to offset a billion dollar shortfall in revenue.
Pure crooked politician greed.
House are illiquid in a declining market as citys go broke and jack your property taxes
https://business.financialpost.com/entrepreneur/small-business/horrible-optics-tax-burdened-business-owners-fume-after-calgary-chips-in-275-million-for-new-flames-arena?video_autoplay=true
#24 SoggyShorts on 08.09.19 at 2:05 pm
Aside from the obvious scammy parts, how does investing more than $5 make any sense?
—————————————————-
It doesn’t, except for hastening the queen bee’s opportunity to get out – plays off a lack of understanding of general math similar to buying more than one lotto ticket for a particular draw; while odds of winning are 0 with no ticket (and you get to keep your $5), there is no appreciable improvement between having one or two or ten tickets… Similarly, the psychology at play is that each extra $5 is one more step up the old $1M ladder, thereby reducing the time until your own payoff. What’s $15 compared to an earlier million? This type of scheme is as old as the hills – internet just adds reach to more suckers er I meant investors and is cheaper than stamped envelopes with a copy of the “offer” mailed out across entire postal codes like the old days…
In regards to laws, not a lawyer but mayhap the legalities haven’t caught up yet – what’s on the books seems to mostly apply to actual merchandise as this was classically a pyramid sales from home scheme, try walking into your local constabulary to complain about a $5 investment club… Though I’ve just seen on CTV that the City of Toronto is hot on the trail of a floating Senior’s Euchre club with a $1.25 buy-in that is sullying community centres with unlicensed gambling, so you never know…
As others have noted, the CRA is likely interested in what’s been claimed from the pot at the end of this particular rainbow as much as anyone…
For general reference I’ll add a link rather than copy it wholesale for some related info…
http://www.canadianadvertisinglaw.com/pyramid-selling/
Boy, good thing Talish isn’t based in Toronto – the cracker-jack agents at Gaming Services would see to him!
DELETED
Sad part is $1MM bucks doesn’t go very far these days. Maybe a nice townhouse in Barrie and a Kia.
#64 Yanniel on 08.09.19 at 6:38 pm
“Scientists will eventually stop flailing around with solar power and focus their efforts on harnessing the only truly unlimited source of energy on the planet: stupidity.
I predict that in the future, scientists will learn how to convert stupidity into clean fuel.” – Scott Adams
==========================
They could start by hooking up all the exercise equipment in gyms to generators and store the energy in batteries or feed it back into the grid.
ponzi….. jail….next
That scheme is not legal. It’s both a pyramid scheme which is illegal, and a “lottery” for which he’d need charitable status and a license and I’m sure he has neither of those.
Updated version of the book Dando Shaft written by Don Calhoun. Written in 1974 when the people’s millionaire could live it up. Humorous book you should read. Talish’s idea is very old.
#47 Shawn Allen on 08.09.19 at 4:50 pm
Government Bond Supply and Demand
Possibly there is also massively more money in investor hands that is easily sopping up the governments larger supply of bonds issued?
The ONLY reasons for some investors to be interested in bonds is the expectation for rates to go down further to zero and negative.
If you loaded on Japanese with 1.3 % 10 years ago you would look like genius as you get ‘capital gains’.
The bond demand is driven otherwise strictly by central banks and institutions, the 1st with made up money, the 2nd with the sucker retirees money.
So basically the expectation is that central banks will open the floodgate in the future and ‘purchase’ bonds on massive scale after the rates have hit zero. THAT drives the decline in 5 years bond yields.
If you believe that somebody is interested in the yield alone with current inflation level, you need some professional help.
In market conditions we would have 8 % + rates currently as we did in the 80-es.
The dangerously delusional idiots in monetary power believe that ‘hidden’ inflation combined with zero rates for a decade or two will solve the debt issue.
Smart money is pretty much in the stock market, gold and real (non debt related real estate) assets.
If you like ‘stability’, load on the underlying bond asset – loonies. Buffett is backing up the truck and loading on T2 bonds….Not.
BoC is already purchasing bonds, of course silently, this will only accelerate.
The very premise of that is very, very scary for people on fixed income and pretty much for the majority of the population with the current open borders and capped wages (despite the statistical lie of wage growth).
Inflation will destroy (and is currently destroying) the standard of living.
Brainwashed individuals like MF and his off springs/if any will only envy Italians for their birth rate
Why do we need zero rates and 300 k + immigrants a year when economy is so great (1 % nominal growth as of lately) and there is no problem with the shepple’s reproduction?
Ha, like the old days; send me two dollars and I will tell you how to make millions. Unbelievable on how many suckers out there. How many years spent in jail for this ponzi scheme? Beats me! I know of one; scam artist uncle (40 yrs back that tried this) he is never allowed back in the U.S.; hiding out, last I heard in Spain. :)
#66 Remembrancer
…there is no appreciable improvement between having one or two or ten tickets…
——————————–
“Appreciable” is the operative word. In fact, if you buy ten tickets (all different) in a 6/49 draw your odds of winning (or sharing) a jackpot go from a mind numbing 14 million to one to a more tempting 1.4 million to one. Better, yes… but not appreciably better.
I had a friend who was being coaxed into joining the office pool for 6/49. He said “fine, but I want to pick the numbers 1,2,3,4,5 and 6”. They wouldn’t let him in. They figured he was being a poor sport for choosing a sequence that had no chance to win.
sorry me again….but wut??? then Y???
https://www.theguardian.com/world/2019/aug/09/chase-bank-cancels-all-credit-card-debt-for-canadian-customers
#47 Shawn Allen
Why no long term bond investor strike (even if they just move to shorter?)
———————————-
Only thing I could find regarding this is from 2010.
“What happened is that an interest rate derivatives edifice was created that had stealth bond demand built into it.” ~Rob Kirby
https://www.financialsense.com/contributors/rob-kirby/the-extinction-of-the-bond-vigilantes
If you don`t buy it or are not forced to buy it through regulations the Central Banks buy it with their printing press. Like Ponzi Poloz just did with 500 million in Mortgage securities. What about15 trillion in whatever it takes negative bonds? Who in their right mind is lining up for that dog-shit ?
The Giant Sucking Sound of Financial Repression
https://wolfstreet.com/2019/07/31/the-giant-sucking-sound-of-financial-repression/
Poor people are hilarious!
Creative, but hilarious! Lol!
ha ha ha ha ha ha ha ha now that is funny. The old classic pyramid scheme. Every once in a while it rears it’s ugly head. For the desperate and dumb. Should be a cop knocking on his door anytime now.
Stan Brooks Bond comment
If you loaded on Japanese with 1.3 % 10 years ago you would look like genius as you get ‘capital gains’.
*************************
Just on that point, are you talking about they bought 30 year bonds?
The capital gain on a 10 year bond bought ten years ago that has now just matured is zero.
Any capital gain on a bond after it is issued is temporary as it matures at par.
The capital gains on a stock (I mean on an equity ETF) are often permanent and represent a flow of money from customers of businesses to investors via profits. That is a positive sum game. On top of that are trading capital gains where some investors make gains at the expense of others who make capital losses.
Capital gains over the life of a bond are always temporary. But that’s a zero sum game like on trading stocks some can make gains at the expense of others who make capital losses.
Bonds do provide a way to speculate on interest rates and can add stability to a portfolio by sometimes moving opposite to equities and by being generally more stable than stocks (short bonds).
Great posting Garth. You often tell us about staying away from cryptos, metals and GIC’s to preserve our money and make sensible balanced investments instead. You should post more articles about fraudsters because they are out there victimizing innocent folks out of their money.
Why institutions buy long bonds at very low yields
Sure for stability bad diversification and hoped for negative correlation to equities. Point taken.
But, part of the reason might be that “all the other guys are doing it”. And right, as Stan alludes there may even be regulations that almost force some institutions to buy long bonds, no matter what the yield.
About 50 years ago, Buffett started writing about the herd like behavior of companies and institutions. He calls it “the institutional imperative”.
Bond Vigilantes Gone?
#78 Doghouse Dweller on 08.09.19 at 8:24 pm
#47 Shawn Allen
Why no long term bond investor strike (even if they just move to shorter?)
———————————-
Only thing I could find regarding this is from 2010.
“What happened is that an interest rate derivatives edifice was created that had stealth bond demand built into it.” ~Rob Kirby
https://www.financialsense.com/contributors/rob-kirby/the-extinction-of-the-bond-vigilantes
*********************************
Interesting read but not enough there to convince me. Perhaps I fail to understand his linking of derivatives. But if the guy was betting rates would stay low, he sure got that right.
I await Buffett to explain it some day.
Buffett wrote many many years ago about investors foolishly buying long municipal bonds at an “abominable” 1% in the mid or late 1940’s when equities were available at around book value and earning far higher returns. It did not work out well in that case as rates and inflation soon soared. Maybe this time…
Hi Garth,
Chase bank has forgiven all outstanding credit card debt for its Canadian customers. Any idea what the total amount would be ? And why they couldn’t find any buyer for this debt, or the creditor was indeed generous to its customers?
Vancouver condo info: House prices in Vancouver continue to edge lower- CBC news August 2/2019
The 200,000th person would need to wait 547 years to get their million! Brilliant plan Einstein. Go back to work and don’t quit your day job.
#34 crowdedelevatorfartz on 08.09.19 at 3:18 pm
Sounds like a Ponzie without the Pilates….
———-
Good one.
Did you hear about Transit Executives getting a 30% increase?
I guess that the dogs from the back row are Netherlands, Germany, Sweden, Zimbabwe, France, Merkel, Norway?
Sounds like a con to me. I think will go back to the picture and look at it for a while and try to forget about Talish.
I give you deplorables.
Who in there right mind will go to the other side.
https://youtu.be/iMaJyUQfwv4
The CBC and butts hate me.
https://youtu.be/uuDCUEyQJmc
Not afraid . I’m a gambler.
#83 Shawn Allen on 08.09.19 at 9:48 pm
Why institutions buy long bonds at very low yields
————————————–
During this year’s Berkshire AGM, a pension fund manager had some questions about returns, and Charlie Munger asked him why he would bother chasing anything even slightly risky when a 1% fee (the fund manager’s take) on $1B equalled $10M.
Managers of large pension funds have nearly nothing to gain from risk for higher returns, so why not buy bonds? At least they won’t lose money and make the manager look bad.
#76 Damifino on 08.09.19 at 8:20 pm
“Appreciable” is the operative word. In fact, if you buy ten tickets (all different) in a 6/49 draw your odds of winning (or sharing) a jackpot go from a mind numbing 14 million to one to a more tempting 1.4 million to one. Better, yes… but not appreciably better.
———————————————-
Thanks for making my point.
Sorry, if the odds of one ticket winning the jackpot is 1 in 13,983,816 (according to quick google of OLG site) then buying 10 doesn’t make it 1 in 1,398,381. the same as buying 100 doesn’t make it 1 in 139,838.. or 1000 making it 1 in 13,983. Yes, for statistics pedants out there, not 100% correct for probability but close enough for government work…
#77 bellend on 08.09.19 at 8:24 pm
sorry me again….but wut??? then Y???
https://www.theguardian.com/world/2019/aug/09/chase-bank-cancels-all-credit-card-debt-for-canadian-customers
————————————————————
Obviously somebody got out a calculator and figured out the cost of collecting outstanding debt vs. cost of writing off said outstanding debt along with whatever other costs are incurred and regulations required to be met when you exit an affinity credit card business with your tail between your legs… (e.g. no one is talking about the Marriott or Amazon contracts here…)
If the sample of customers in the article are in any way representative of their clientele overall then may have been a no-brainer easy out with some good publicity…
94 Remembrancer
Thanks for sharing your mathematical innumeracy here.
Did you you drop out of school after Grade 4? Or just skip the classes about division?
Buying multiple tickets for lottery draws with lower ticket float numbers has worked very well for me :)
Basic math.
Duhhhhhhhhhhhhhhh……
Oh, so you’re a lottery investor. And you came here to help us? – Garth
Who’s to argue with billionaire Mark Zuckerberg buying rental property.
https://www.wsj.com/articles/wealth-manager-iconiq-known-for-silicon-valley-ties-widens-real-estate-holdings-11565089200
It’s called ‘diversification’. – Garth
#84 Shawn Allen on 08.09.19 at 10:01 pm
Bond Vigilantes Gone?
#78 Doghouse Dweller on 08.09.19 at 8:24 pm
#47 Shawn Allen
Why no long term bond investor strike (even if they just move to shorter?)
——————————-
Regarding financial Sense.
I’ve been reading and listening to Jim Puplava for about 15 years or so. He has great heavy hitter guest and is the first one to say something if he’s made an incorrect call.
He’s a very smart guy. He’s let’s the other person say there view even in disagreement hint hint.
That was a funny post.
Money for nuthin’ and your chicks for free!
https://www.youtube.com/watch?v=qVRcjmgxJEQ
….”Because I’m busting my ass working, and I’d like to be home in my house with my family.”
Are you $$#@ kidding?!! Talk about unclear on the concept. You don’t get to stay home until you’ve busted your a$$ to save and accumulate just like most everyone else.
When you’ve done that, then maybe you get to “be home in my house with my family.”
(Oh, so you’re a lottery investor. And you came here to help us? – Garth)
Hee, hee, Garth, whatever works, eh!
Seriously, though, I am not saying I recommend lottery playing to most people. However, it can be done in a professional and consistent way that mitigates risk and enhances payback while maintaining better odds of winning larger prizes over time. But know your limit, play within it.
The comments here show, sadly, that a big cohort of your reader population still gambles recklessly on individual stocks, penny stocks, gold and bitcoin and forex.
On balance, lotteries are a better, more predictable game to play than any of these. At least lotteries actually have a draw date and payouts that must happen by law – some stocks or other financial gambits just get delisted or the companies change their plans or split and devalue shares so expectations are never even tested, or you possibly can’t even redeem your e-currencies. How rational is that? Lotteries are much more black and white by comparison to most high risk investing, other than of course your sensible, balanced approach to 60/40, ETFs etc… (In some countries you can also claim lottery losses as business expenses.)
But most still don’t follow your smarter lead, just look at the real estate bubble, as well as all the greater fools here relentlessly promoting bitcoin, forex, stock-trading/futures etc…
Check the OLG winners lists sometimes. There are some very regular names that show up there all the time, reaping in big bucks on lotteries and sports games. Do they know something about math and probability that others don’t?
You bet ;)
#84 Shawn Allen
I await Buffett to explain it some day.
——————————————–
If he was going to explain it to you he would have done it by now !
USA- munies are tax advantaged. That might have had something to do with it, and you got your cash back at maturity plus the 1% interest.
Its simple Shawn . They are printing money, tons of it. Clandestinely at first and now with the flood gates wide open. Inflate away the debt and impoverish the population .The oldest trick in Emperor Nero`s book.
Never happened before on a global co-ordinated Central Banker scale.
The results are in the news most every day , Mayhem !
“In Theroy, there is not difference between theory and practice, but in practice, there is.”
Breaking news this weekend
Report: Banks Turn Over Documents On Russians Possibly Tied To Donald Trump | The Last Word | MSNBC
The Wall Street Journal reports that several major banks, including Deutsche Bank, have turned over documents related to Russians who may have dealt with Trump, his family or his business to congressional investigators. Lawrence O’Donnell discusses what comes next in the investigations into Trump’s finances with Tim O’Brien and Berit Berger.
https://www.youtube.com/watch?v=vc_-ReUdu9c
Looks like the PPT or Fraud Squad will have their hands full this Monday.
The records from Deutsche Bank will be the killer blow to the entire Trump family.
Hey Gallery,
Can someone point me to the first Frankenumber post, when the RE boards introduced the HPI and Garth explained how flawed it it? I search it here in Garth’s search and it returns 2 most recent posts, and when I google I went pages back and it’s not there because it’s so often referenced in posts and comments. I don’t know when the post was made and I admit it, I’m too damn lazy to go month by month clicking.
Someone have the post link by chance?
SOUNDS LIKE every other government or corporate pension fund out there.
Dont they all run this way?
Aren’t they all Ponzi Schemed?
DELETED
I believe Talish may have ‘held in’ too many farts. When too many are held in, they creep up your spine into your brain… and this is how you get these $hitty ideas!
#96 Lottery Winner on 08.10.19 at 7:17 am
94 Remembrancer
Thanks for sharing your mathematical innumeracy here.
————————————————-
Hey, you wanna Chase the Ace have at it bro, Damifino was talking 6/49 where the difference in odds between 1 unique ticket in 14M and 10 unique tickets in 14M is not the same as 1 in 1.4M…
Besides, basic probability (not division) starts in Grade 2 in Ontario, don’t need my Grade 4…
#65 Expat “small business commerical property rates by 200-300% YOY”
Right. Same here in Toronto where they’re being charged theoretical tax rates based on a giant condo perhaps being there. Take everything our elite rulers like the UN say, and flip it.
They do not want communities or self sustainability.
The goal is…making us dependent on their front companies. You know those Supra-National ones, they swoop in and ignore or magically change laws?
Amazon, Uber, Air B&B and most large tech companies are mere Fronts. Sure they have charasmatic leaders.
But they know more about us than we and almost run out lives. Siri, Alexa, Apps.
Hey Siri get me an Uber and make it a Tesla. Alexa order my stuff from Amazon.
All, front companies for what’s to come. Google’s “Smart” cities is a hint.
Btw, I quite agree with our host’s assessment of this crowdsucking pyramid scheme. It so clearly preys upon the financial illiteracy of the masses, it’s like the worst possible lottery scheme you could think of, combined with a lack of transparency about the internal process and the hierarchy/ordering of winners.
I’m happy to share some tips for those who might consider lotteries and related games. Here’s a few:
1. This is a serious part-time job. You don’t just ‘wing it’, or go to Vegas for a drunken weekend. You need to spend time researching, verifying game status, contacting lottery providers occasionally, documenting and comparing different games and results. A couple hours daily to start is a good benchmark, not including time spent out buying retail tickets or sending in orders.
2. Look for games that have a ‘raffle’ not ‘lottery’ format. Basically this means that prize winners are guaranteed, no matter how few tickets are sold. (Think tickets in a barrel at your company picnic) For example, last week’s Lotto Max draw only had 4.8 million tickets sold, costing almost $25 million to buyers. That equates to only a 14.5% probability of anyone actually winning the jackpot, as well as lower values for secondary prizes. The total prize payout that day was under $1.5 million. Terrible payback. That’s like buying penny shares in a miner, ‘hoping’ that they might drill a hole somewhere in the Yukon, only to see them close up shop and not even fire up the drill. There is good transparency amongst regulated lotteries about such things, and you should look especially close at charity lotteries with guaranteed prizes and low ticket float sizes. I have had very good luck buying into mismanaged and under-promoted charity lotteries across Canada that have only sold 20-60% of their tickets by the draw date, but must by law give away all prizes to actual ticket holders.
3. Also, don’t ignore scratch games that have lower numbers of tickets and decent prizes. You can monitor these easily to determine when probabilities of winning larger prizes can increase substantially due to redemption and sales levels that are not in sync, a predictable statistical anomaly that happens due to chance all the time. And generally stay away from these same games when all major prizes have been claimed.
4. It’s all about mitigation of losses while you stay in the game looking for a bigger prize payout later. SPPB (small prize pay back) is what will keep you in the game. Most lotteries suck at this. A $100 purchase of 649 or Max tickets might get you back $15-20 in cash and a few free tickets. Lousy. But, well-chosen scratch tickets can predictably return about 60% of the purchase cost, while continuing to give you a chance at higher prizes. (ie, purchase $1000 of scratch tickets and you will likely be able to buy another $1500 simply with the repeating small prize pay back, so you get about $2500 worth of chances before your money disappears) On any decent tranche of scratch tickets ($500 and up), I have never earned back less than 45% in SPPB, and often above 80%.
(And puhleaasse, for Gawd’s sake, do NOT hog the counter space at your lottery retailer feverishly scratching your tickets – those people are such lonely losers! Take your tickets home, scratch the bar codes only and check back at a ticket counter, anything more is a waste of time)
5. Sports games are about math, not how well you know the Broncos. (But for those who don’t get this, please keep playing, you make the float bigger for the winners – thanks!) More later on this….maybe. ;)
Once you have developed a winning habit, invest all proceeds in a balanced and diversified portfolio. Listen to Garth.
Buffett on Bonds that pay 1%
It was in his 1984 annual letter that Buffett talked about the poor choice investors made buying municipal bonds at less than 1% yield in 1946. The fact the bonds were tax exempt is a bit laugaghable, not a lot of tax on 1% in cany case. And yes, they would have been bought for stability.
For more see that 1984 letter. It is of course pure Gold.
http://www.berkshirehathaway.com/letters/1984.html
Buffett:
Our approach to bond investment – treating it as an unusual
sort of “business” with special advantages and disadvantages –
may strike you as a bit quirky. However, we believe that many
staggering errors by investors could have been avoided if they
had viewed bond investment with a businessman’s perspective. For
example, in 1946, 20-year AAA tax-exempt bonds traded at slightly
below a 1% yield. In effect, the buyer of those bonds at that
time bought a “business” that earned about 1% on “book value”
(and that, moreover, could never earn a dime more than 1% on
book), and paid 100 cents on the dollar for that abominable
business.
If an investor had been business-minded enough to think in
those terms – and that was the precise reality of the bargain
struck – he would have laughed at the proposition and walked
away. For, at the same time, businesses with excellent future
prospects could have been bought at, or close to, book value
while earning 10%, 12%, or 15% after tax on book. Probably no
business in America changed hands in 1946 at book value that the
buyer believed lacked the ability to earn more than 1% on book.
But investors with bond-buying habits eagerly made economic
commitments throughout the year on just that basis.
“There’s a caste system everywhere,” Talish argues, “and all I want to do is make a level playing field. I’m an ideas guy. All I want to go is get people to invest so I can make them richer, and me, too.”
======
isle of sark
the tax haven twins 2012
https://www.bbc.com/news/uk-20729430
Panorama confronts the Barclay brothers with tax revelations | Media …
https://www.theguardian.com/media/greenslade/2012/dec/17/barclay-brothers-bbc
Dec 16, 2012 – In 2005, they went to court in France to sue The Times over a series of articles about their business deals (eventually dropping the action).
Barclay brothers lose £1.25bn tax case against HMRC. The billionaire Barclay brothers have lost a legal battle with HM Revenue & Customs, after the supreme court ruled that they are not owed £1.25bn related to tax overpayments.Nov 1, 2017
Barclay brothers lose £1.25bn tax case against HMRC | Media | The …
https://www.theguardian.com/media/2017/…/barclay-brothers-lose-tax-case-against-hmr…
————————————–
how bout these tax suckers!
branding /treaty shopping/ resident certificates
exploited offshore vehicles for everything from management fees to the right to use logos
….Advisors, routed payments to and from 53 spas and hotels on every continent except Antarctica, according to documents…..
https://www.icij.org/investigations/mauritius-
leaks/luxury-spas-and-hotels-lavish-guests-while-depriving-tax-collectors/
https://twitter.com/icijorg
#94 Remembrancer
Then explain this: If you buy 13,983,816 tickets (all different, thus covering every possible combination) you are guaranteed a jackpot winner, not to mention all the (much) lesser prizes too. Even though you’ll probably be a money loser with total winnings less than $14M.
But regardless of that, defend your assertion that holding more (different) tickets does not increase the odds since we know that buying all the possible tickets gives a 100% probability of a winning six number combination.
Or, if you happen to have 1.3 million dollars already, and you want to earn $52,000 per year at 4% return, and pay no income tax at all, you can do that instead:
https://www.theglobeandmail.com/investing/education/article-how-to-earn-52000-tax-free-no-offshore-account-required/
#112 Shawn Allen
You might consider that this was just after the great depression and the end of World War II . Perhaps those traumatized survivors were more interested in keeping their meager savings than loading up on alleged book value boiler room shares.
114 Damifino
#94 Remembrancer
Then explain this: If you buy 13,983,816 tickets (all different, thus covering every possible combination) you are guaranteed a jackpot winner, not to mention all the (much) lesser prizes too. Even though you’ll probably be a money loser with total winnings less than $14M.
But regardless of that, defend your assertion that holding more (different) tickets does not increase the odds since we know that buying all the possible tickets gives a 100% probability of a winning six number combination.
________________________________________
Damifino……….Shhhhhhhhh! Quiet.
Those of us who have done well in lotteries and gaming as well as other business ventures rely on innumerate and emotional people like Remembrancer to fund the capital pool from which we can draw so enjoyably.
Just pat him on the head and praise him for his imperfect but charming Grade 1 math.
And tell him that with his math skills he might have an excellent future as a TREB publicist ;)
Why they bought bonds at 1%
#116 Doghouse Dweller on 08.10.19 at 1:13 pm
#112 Shawn Allen
You might consider that this was just after the great depression and the end of World War II . Perhaps those traumatized survivors were more interested in keeping their meager savings than loading up on alleged book value boiler room shares.
**************************
Well, exactly. They were scared of stocks and could not see the good businesses underneath most of the large cap stock symbols. They did not understand the math. They did not understand the risk of inflation. Return on equity??? Read Buffett.
What was that about history repeating? It won’t exactly repeat but investors make similar mistakes.
#117 Lottery Winner
Sorry…. I shall hold my tongue, forthwith.
#115 Ace Goodheart that link is for subscribers. It helpfully brought me to their main page. Top headline..once again persuading 1st world countries not to have kids.
(quiz: there’s one entire continent where abortion is not legal. Guess which one or check Wiki)
‘Love and hopelessness: as protests sweep Hong Kong, one couple decides against kids’
https://www.theglobeandmail.com/world/article-love-and-hopelessness-as-protests-sweep-hong-kong-one-couple-decides/#comments
Hmmm… I believe Remembrancer’s assertion is correct if the ticket numbers are chosen randomly (“quick pick”). However, given the very large population of combinations, even for ten tickets, the difference probably doesn’t appear for several decimal places.
But the population is not infinite, so the winning combination can systematically created.
Now the odds of a ticket winning the jackpot are a simple calculation. You have a 6 in 49 chance of having that first number drawn. Then a 5 in 48 of the second and so on. As all numbers picked must be drawn, then the factors are just multiplied together.
#121 Vampire Studies (doctoral thesis) on 08.10.19 at 5:37 pm
This is more fun than I thought it would be.
Vampire Studies there’s a formula for working this out: (n!) divided by (r! times (n-r)!) where in this case n = 49 and r = 6. That reads as 49 factorial (49 x 48 x 47… x 2 x 1) and 6 factorial (6 x 5 x 4 x 3 x 2 x 1) not FORTY-NINE! and SIX! as we in Grade 1 would say seeing the exclamation mark and just having had a grammar lesson before math. Nap time comes after math, naps are the best, but I’m digressing. Anyway, that’s where the 1 in just shy of 14M-ish odds comes from as the probability of any one set of 6 numbers winning the 6/49 jackpot.
Now, as Damifino noted about his friend triggering his workplace lotto pool investors, 1,2,3,4,5,6 is as legit a pick as 49,48,47,46,45,44 or 2,7,17,29,37,47 – though in fact, according to the 6/49 website the best they’ve matched is 4 #s a grand total of 3 times, 3 times and 4 times respectively, in the history of 6/49, never winning the jackpot…
Getting back to the actual discussion, it was indeed 6/49 and the jackpot we we’re discussing not whatever scheme Lottery Winner thinks he’s tapped into: where two discrete sets of numbers on two tickets doesn’t double your odds of winning the jackpot, its now 2 in 14M-ish, which is not appreciably different n’est pas? Not sure what that means yet, as around the same time naps are taken out of the schedule, french language classes are added I’m not there yet…
#121 Vampire Studies (doctoral thesis) on 08.10.19 at 5:37 pm
“[…] Now the odds of a ticket winning the jackpot are a simple calculation. You have a 6 in 49 chance of having that first number drawn. Then a 5 in 48 of the second and so on. As all numbers picked must be drawn, then the factors are just multiplied together.” No, your calculation is incorrect. The discrete probability distribution that best describes the Lotto 6/49 draw is the hypergeometric probability distribution. Read up.
https://en.m.wikipedia.org/wiki/Hypergeometric_distribution
122 R – Yes, it is fun
My engineering studies taught me if you cant recall the formula you can just derive it from first principles. Not
too hard in this case. You’ll see that the 49! over the
(49-6)! just leaves you with (49X48X47X46X45X44). Divide that by (6X5X4X3X2) and you get your number.
Yes all those combinations have the same odds of winning. And 2X is always twice X even as X tends to
zero, though the difference is miniscule.
Can you remember (pun??) the puzzle about the size of
the group of people needed so that the probability of
two people in that group having the same birthday is more than 50%? The number is quite low, 20-something I believe. I did sit down and figure it out at one time.
The math proves why pyramid scheme are illegal fraud. This guy should be arrested.
https://www.techzim.co.zw/2016/08/pyramid-schemes-doomed-fail-mathematical-proof/
‘two tickets doesn’t double your odds of winning the jackpot, its now 2 in 14M-ish, which is not appreciably different n’est pas? ‘
So in ‘2 in 14M’ isn’t double ‘1 in 14M’ in your world?
And ’10/14M’ isn’t the same as ’10 times 1/14M’ either?
I am with Lottery Winner, if you are going to play do some homework, look into rolldowns ( the UK lotto does this occasionally)check the payout percentages, dont buy that dusty scratch ticket thats been at the gas station for months until you check the winners list., etc, etc.
And learn some math….
#121 Vampire Studies (doctoral thesis) on 08.10.19 at 5:37 pm
“[…] Now the odds of a ticket winning the jackpot are a simple calculation.[…]” Retraction: Your calculation does accurately show the chances of drawing 6 winning numbers without replacement from 49 different numbers. My apologies. :)