Originally Posted by
Balance
Let me share with you all the rationale behind why I was so keen and confident to take the bet he wanted to make with you, Daytr :
The bet with SailorRob is a no brainer - subject to one buying $50,000 worth of OCA stock as a hedge.
Why there is no downside and only upside with the bet :
1. SR bets OCA will be at least $3.22 in 2040. So he is betting that OCA (sp now 70c) will put on at least 360% in the next 16 years.
2. He has underwritten any downside for you by betting the $50k - so worse case scenario, you get your $50k back if OCA goes belly up.
3. In the event of OCA hitting $3.22 or more in 2040, your return will still be 260% or 16.25% a year (non-compounding).
4. In the event of OCA being less than $3.22, he is guaranteeing you an additional 100% return ($50k) on top of any return you make on your $50k of OCA hedge.
It was so obvious how ever that SR had no intention of going ahead with the bet - all bluff and bluster.