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Nine Moons » Blog Archive : The Ethical Implications of Gambling as a Time Traveler » The Ethical Implications of Gambling as a Time Traveler

The Ethical Implications of Gambling as a Time Traveler

Rusty - May 8, 2009

The latest episode of Lost raises an interesting ethical question for time travelers who gamble. Upon entering the submarine to go back to the mainland in 1977 Sawyer suggests that he and Juliet would buy Microsoft stock and bet on the Cowboys in the Super Bowl. They were from the year 2007 so they knew the outcomes of those “gambles” (as did Biff know the outcome of sporting events in Back to the Future II). As long as they were sure that their betting on those events wouldn’t alter the events themselves, they could be sure to profit substantially from their bet. Removing risk. One of time traveling’s biggest perks.

While my opinions on (what we mean when we say) gambling are probably not in-line with most members of the Church, I don’t really ever engage in it. Not because I have conflicting morals, but because I suck at it. I’m a terrible blackjack player, worse at poker and my odds for winning the other games only deteriorate from there. My dismal record for “taking the pot” is only matched by my terrifyingly bad luck at choosing stocks. Which leads me to my view that the only difference between the poker player and stock broker is the word “Community” in his alma matter’s name. I’ve always felt that the professional poker player has eliminated much more risk in his investment choices than I do when I try to figure out if I should sell that Apple stock at $80/share two months ago (I did. See here for where it’s at today).

Of course the aversion to losing my moderately-hard-earned money makes it easy for me to act within Church orthodoxy. No, I would NEVER gamble, Bishop. That’s just not a part of who I am.

Now I must say, if I had the money I’d buy a house right now to fix up and flip, the housing market be damned. I know what I’m doing, I understand the market, I understand the buyer (here in Brooklyn), I know when the numbers stop making sense. In effect I have eliminated the controllable risks. Just like my friend who is a day-trader. And the professional poker player.

So anyway, back to Lost. So if Sawyer and Juliet do indeed go back to the mainland in 1977 and live out their lives in the past, buying Microsoft stock, betting on the Cowboys (a scenario which I would feel comfortable betting every penny that I have won’t happen on the show, btw), is it dishonest for them to do so? If a time traveler came to you today and said they have been to the future and that the Lakers were going to win the NBA finals in a couple weeks, would you bet on them? Is it simply a matter of “doing your homework”? It seems that President Hinckley’s counsel against gambling was in part due to the desire to get “something for nothing”. Would this fall into that category? And finally, do you ever wonder if guys like Warren Buffett aren’t as smart as they put on, but are just time travelers?

12 Comments »

  1. “Which leads me to my view that the only difference between the poker player and stock broker is the word “Community” in his alma matter’s name.”

    There might be little difference in the motivation, but there is substantial difference in the action. The stock picker is buying a real (at least legally real) thing. The gambler has a hand. Further, the stock purchaser is not or at least should not be, individually influencing the performance of the equity. The poker player, is manipulating the other players, at least as much as he is “doing his homework”.

    One other difference. Although the fine gambling establishments will thank you for your contribution to their revenue, a poker player’s activities don’t contribute to economic development. The stock picker – yes yes – bubbles – but she is putting money into companies.

    As to the time traveler – First of all I would never bet on the Lakers as a matter of principle. Second, I wouldn’t bet because, as you know, bets are not simply win loss bets – but based upon the spread – and although the outcome may not change – with the vagaries of time travel there are enough variations that the lakers may not be the spread in the universe. Third, even if we could be assured the spread, then although the time traveler and I won’t technically be gambling we will be encouraging people to gamble so as to match our bet because of the money we are putting up will change the spread or the payout. This will thus lead people to sin which is a bad thing, and further it will lead to a paradox and destroy the universe, And last – there is no such thing as time travel, I won’t waste time on this question.

    One last point – according to economist Nassim Taleb – investing in bonds is bad and led to the recession. On NPR’s Planet Money a few weeks ago – he talked about how debt is bad. Because people who lend money underestimate the risk – thus they tend to take too much risk, which is what caused the housing crisis. See http://www.npr.org/blogs/money/2009/04/hear_nassim_taleb_checks_in.html

    Comment by Jay S — May 8, 2009 @ 4:06 pm

  2. It is morally worse to gamble and win than to gamble and lose.

    In the second instance, you are only wasting your own money.

    In the first instance, you are enriching yourself at the expense of all the poor suckers who lost money they could not afford to lose.

    Comment by Matthew Chapman — May 9, 2009 @ 3:24 am

  3. I am just finishing up Season Two and am glad to know that at least two of the original cast members are still on the show! So far, it just seems that the writers plant to kill everyone off and it’s getting on my nerves.

    I know this isn’t really the topic but I just had to throw that in there.

    Comment by AJ — May 9, 2009 @ 8:41 am

  4. #2 – why do you assume that the other players have money they can’t afford to lose? Perhaps that is their money they have set aside for playing. I do agree that many times stupid people bet money they can’t afford to lose. Last year I saw one guy blow his entire paycheck at a blackjack table. I will never forget the fear in his eyes when he lost his last chips.

    On the other hand, blackjack and poker are games of skill (with an element of chance). Skillful play, especially in blackjack, can result in an advantage for the player. I have learned a card-counting system that allows me, under certain conditions, to have about a 2% advantage over the house. Not enough to live on, but enough to occasionally make a nice little profit.

    Now, slot machines, roulette, the lottery – those you might as well just flush your money down the toilet.

    Comment by Phouchg — May 9, 2009 @ 9:36 am

  5. Would time travel stock picking count as an inside trading violation? Seems to be the sort of thing that should result in felony prosecution.

    Comment by Stephen M (Ethesis) — May 9, 2009 @ 10:08 am

  6. Seems to be the sort of thing that should result in felony prosecution.

    No sweat. You just time travel back to a point in the future when your sentence is over.

    Comment by Last Lemming — May 9, 2009 @ 11:41 am

  7. Jay,

    That’s the first real, coherent argument I’ve heard for stocks as not being gambling. Thank you.

    However, I still do have NO idea what “getting something for nothing” really means. Thank goodness I’m a boardgame geek and not into gambler:)

    “So what’s it gonna be, McFly?! Are you in, or out?!”

    Comment by Bret — May 9, 2009 @ 3:00 pm

  8. I think the “get something for nothing” phrase is overused. My inheritance falls pretty much under that category and I don’t have a problem accepting it. Gifts are too. I always thought the main problem with gambling is that it’s addictive and can wind up ruining a person financially.

    Comment by AJ — May 9, 2009 @ 3:21 pm

  9. The stock investor is buying something real, but the stock trader, using leverage and holding positions for minutes at a time, while theoretically dealing with pieces of real assets, is really functioning more like a speculator or gambler. But the investor would have no way to sell into a liquid market without the activities of the traders.

    Comment by Bill — May 9, 2009 @ 4:58 pm

  10. Pres. Hinckley sited “get something for nothing” in his 2005 talk. His official definition is “Gambling is simply a process that takes money and does not offer a fair return in goods or services.” Which certainly makes more sense but I still don’t fully understand. What does that really mean?

    Anyway, like I said, thank goodness I play boardgames and not these chance games:)

    Comment by Bret — May 10, 2009 @ 3:31 pm

  11. Bill

    The motivations of the stock trader aside, he is generally buying and selling things with at least some grounding in a legal reality. I say generally because there are those who purchase options, which are even further removed from an actual investment. That aside, the stock picker certainly can act like a “speculator”, but not necessarily like a gambler. But giving money in exchange for something you think will be worth more in the future is not necessarily gambling. But if dealing with risk is gambling, then every profession which can be affected by randomness is one. See the California citrus farmers in the late freeze…

    Comment by jay s — May 10, 2009 @ 11:43 pm

  12. Yes, a stock trader is almost a naif and an innocent in a world of credit default swaps and collateralized debt obligations. Ironically, the sophisticated options arrangements that brought down hedge funds and banks were originally devised to mitigate risk.

    Options allowed the commodities markets to hedge risk so that, for example, citrus growers would not be financially ruined by an unpredictable weather year. But options can be used conservatively, or (with the outrageous leverage some banks were using) recklessly. Another problem is when the size of the market is distorted as with a stock with a very small float (% of outstanding shares), or as we saw last summer, when big institional investors and pension funds started to pile into the oil market, without ever having any intention of taking delivery on their contracts.

    Comment by Bill — May 11, 2009 @ 2:19 pm

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