While it does seem that Ballmer doesn't have an understanding of the deepness of the problem, in his defence, he outscored BillG on the math SAT with a perfect score of 800, and graduated Harvard with a degree in applied mathematics.
Which makes me wonder if it's related to another 'simple' game theory problem that came up in Matt Levine's money stuff:
"They made me do the math on 1000 coin flips. EV(heads) (easy), standard deviation (slightly harder), then they offered me a +EV bet on the outcome. I said “let’s go.”
They said “Wrong. If we’re offering it to you, you shouldn’t take it.”
I said “We just did the math.”
They said “We have a guy on the floor of the Amex who can flip 55% heads.”"
I like that anecdote and the takeaway, especially with regards to trading: if someone's offering you what seems obviously a +EV trade, why are they offering it to you and what are you missing? Whether that was Ballmer's intended lesson is another matter..
[0]https://www.bloomberg.com/opinion/articles/2024-05-14/amc-is...
Which makes me wonder if it's related to another 'simple' game theory problem that came up in Matt Levine's money stuff:
"They made me do the math on 1000 coin flips. EV(heads) (easy), standard deviation (slightly harder), then they offered me a +EV bet on the outcome. I said “let’s go.”
They said “Wrong. If we’re offering it to you, you shouldn’t take it.”
I said “We just did the math.”
They said “We have a guy on the floor of the Amex who can flip 55% heads.”"
I like that anecdote and the takeaway, especially with regards to trading: if someone's offering you what seems obviously a +EV trade, why are they offering it to you and what are you missing? Whether that was Ballmer's intended lesson is another matter..
[0]https://www.bloomberg.com/opinion/articles/2024-05-14/amc-is...