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MegaMillions rolls to $1.6 Billion, $904 mil cash option

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MegaMillions rolls to $1.6 Billion, $904 mil cash option

 
Old 10-21-2018, 03:44 PM
  #41  
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Originally Posted by PKguitar View Post
What part of what I wrote is it that you don't understand?

One BILLION dollars of Tuesday's jackpot are NOT coming from ticket sales for this upcoming drawing. They are coming from prior ticket sales, so if you have never bought a ticket before, and buy one for this drawing, previous players have donated ONE BILLION dollars to the payout you just took a chance on. How could this NOT increase the expected value of your ticket?
Easy. Come Wednesday morning, I don't expect my ticket to be worth jack chit.

Last edited by 05c6silververt; 10-21-2018 at 03:45 PM.
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Old 10-21-2018, 04:19 PM
  #42  
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I can't even imagine what I'd do with that kind of cash. I got a ticket for one of our national draws on Friday, I think it was $55M CDN lol
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Old 10-21-2018, 04:26 PM
  #43  
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MM 1.6B
PB 630M

Both jackpots combine over 2 billion!

Getting 1 ticket for both. I mean there is a chance......right?!
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Old 10-21-2018, 08:34 PM
  #44  
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Just checked my ticket...I won $4 on powerball.
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Old 10-21-2018, 08:50 PM
  #45  
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Originally Posted by Voytek View Post
Worth playing to dream for a few hours.

Where are are all these credible psychics?! I need numbers.
Originally Posted by TCracingCA View Post
39 tickets!!! Havenít checked yet, but wondering if I am eating Top Ramen next week to stay in my cash budget!
I will have to tell my wife to buy a ticket or two. If I won that might affect my post count on CF.
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Old 10-22-2018, 11:34 AM
  #46  
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Guy who worked for us a couple of years ago hit for 250 million...holy canoli.
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Old 10-22-2018, 02:21 PM
  #47  
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Originally Posted by PKguitar View Post
Actually, the larger the jackpot, the higher expected return on the purchase of one ticket. This is fact.

The difference between a "speculation" and an "investment" is that an investment has a positive expected return, where a speculation has a negative one.

When the jackpot starts out at about $40,000,000, the expected value of a ticket is about $0.29, so clearly a speculation. As the jackpot grows, your odds of winning it don't change, so the expected value of the ticket rises, basically on the backs of those other losers who bought tickets in previous drawings that didn't win. Once the expected value of the ticket exceeds the $2 you spend on it, it can properly be deemed an "investment".
In poker it's called getting the right price on your money.

The odds of picking the correct numbers are 1 in 302,575,350.

So to risk $2 you need a potential return of $605,150,703 to be getting the right price on your money.

I plan on buying 1 ticket
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Old 10-22-2018, 06:26 PM
  #48  
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Originally Posted by Z'ha'dum View Post
In poker it's called getting the right price on your money.

The odds of picking the correct numbers are 1 in 302,575,350.

So to risk $2 you need a potential return of $605,150,703 to be getting the right price on your money.

I plan on buying 1 ticket
Pot odds
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Old 10-22-2018, 07:11 PM
  #49  
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Originally Posted by Z'ha'dum View Post
In poker it's called getting the right price on your money.

The odds of picking the correct numbers are 1 in 302,575,350.

So to risk $2 you need a potential return of $605,150,703 to be getting the right price on your money.

I plan on buying 1 ticket
You are heading down the right road.

If the ONLY win on a given ticket was the jackpot, and you were guaranteed to be the ONLY winner if you won, then yes, your analysis is correct. You would have to get greater than $605 million after the reduction for lump sum, AND the taxes you will pay on the win. So, if the ONLY payoff were the jackpot, and you were guaranteed to not share the pot, and our best estimate of the reduction for the lump sum and taxes on the lump sum would result in collecting about 1/3 of the gross sum (an OK estimate, but it varies a lot depending on where you buy the winning ticket), if the gross prize was more than about $1.9 billion, a ticket could be classified as an "investment".

But obviously, BOTH of the assumptions made above are untrue. It is actually statistically trivial to adjust for the chances of winning the smaller prizes on any given ticket. In fact, the lottery commission does most of the math for you if you aren't into playing with probabilities in a spreadsheet. Looking at the website, the expected return on a ticket for all prizes OTHER THAN the jackpot is about $0.25. I can provide the spreadsheet if someone actually needs to see the math, but like I said, it's pretty straight forward.

So, in order for the expected value of a ticket to be equal to the purchase price, we would have to have an expected value of the jackpot equal to $1.75. If we use the rough estimate of the correction for the jackpot from the annuity to the lump sum and a tax effected amount mentioned above as about one third of the gross jackpot, the math is straight forward from there as follows:

(Jackpot/3) / 302,575,350 = 1.75 (302,575,350 is the odds of winning the jackpot)

Some minimal algebra yields a Jackpot of $1.592 billion that would provide an expected value of a ticket of $2.

So, that sounds good. But we have to remember that we started with TWO assumptions above, and we have only relieved ourselves of one of them. The above ASSUMES that IF we win the jackpot, we will be the ONLY winner. With large drawings like this, that is a very bad assumption.

Years ago, when I worked in a finance shop at a major corporation, we played with this analysis quite a bit since we were all finance geeks and would do an office pool when the jackpot got really big. As it turns out , the adjustment for the probability of multiple winners is NOT trivial. Over the years, we came up with a few methods that we thought were as valid as the statistical methods we used to forecast all kinds of stuff (which is what we did for a living), but no consensus ever emerged on one particular methodology. Suffice it to say that when folks in the pool would ask what level the jackpot would have to get to for it to be an investment, our answer was generally "higher than it has ever been so far".

As shown above, that we are at investment level if and only if we don't share the jackpot, we still aren't there.
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Old 10-22-2018, 08:04 PM
  #50  
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Im buying a 18 Wheeler and will have it converted with 6 showers, Dressing Rooms and lots of clothes to go help the homeless all over the country.

Then Im moving to an island in the Caribbean so everyone leaves me along.
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Old 10-23-2018, 07:11 PM
  #51  
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Originally Posted by 05c6silververt View Post
Originally Posted by jfb View Post
Did you receive a blow to the head recently?
Originally Posted by PKguitar View Post
You are heading down the right road.

If the ONLY win on a given ticket was the jackpot, and you were guaranteed to be the ONLY winner if you won, then yes, your analysis is correct. You would have to get greater than $605 million after the reduction for lump sum, AND the taxes you will pay on the win. So, if the ONLY payoff were the jackpot, and you were guaranteed to not share the pot, and our best estimate of the reduction for the lump sum and taxes on the lump sum would result in collecting about 1/3 of the gross sum (an OK estimate, but it varies a lot depending on where you buy the winning ticket), if the gross prize was more than about $1.9 billion, a ticket could be classified as an "investment".

But obviously, BOTH of the assumptions made above are untrue. It is actually statistically trivial to adjust for the chances of winning the smaller prizes on any given ticket. In fact, the lottery commission does most of the math for you if you aren't into playing with probabilities in a spreadsheet. Looking at the website, the expected return on a ticket for all prizes OTHER THAN the jackpot is about $0.25. I can provide the spreadsheet if someone actually needs to see the math, but like I said, it's pretty straight forward.

So, in order for the expected value of a ticket to be equal to the purchase price, we would have to have an expected value of the jackpot equal to $1.75. If we use the rough estimate of the correction for the jackpot from the annuity to the lump sum and a tax effected amount mentioned above as about one third of the gross jackpot, the math is straight forward from there as follows:

(Jackpot/3) / 302,575,350 = 1.75 (302,575,350 is the odds of winning the jackpot)

Some minimal algebra yields a Jackpot of $1.592 billion that would provide an expected value of a ticket of $2.

So, that sounds good. But we have to remember that we started with TWO assumptions above, and we have only relieved ourselves of one of them. The above ASSUMES that IF we win the jackpot, we will be the ONLY winner. With large drawings like this, that is a very bad assumption.

Years ago, when I worked in a finance shop at a major corporation, we played with this analysis quite a bit since we were all finance geeks and would do an office pool when the jackpot got really big. As it turns out , the adjustment for the probability of multiple winners is NOT trivial. Over the years, we came up with a few methods that we thought were as valid as the statistical methods we used to forecast all kinds of stuff (which is what we did for a living), but no consensus ever emerged on one particular methodology. Suffice it to say that when folks in the pool would ask what level the jackpot would have to get to for it to be an investment, our answer was generally "higher than it has ever been so far".

As shown above, that we are at investment level if and only if we don't share the jackpot, we still aren't there.
Wow, 2 of the board's financial "experts" suddenly get quiet when I post some actual math to support my position. I'm so surprised, you could knock me over with a bulldozer.
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Old 10-23-2018, 07:22 PM
  #52  
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Originally Posted by PKguitar View Post
Wow, 2 of the board's financial "experts" suddenly get quiet when I post some actual math to support my position. I'm so surprised, you could knock me over with a bulldozer.
It's a $2 lottery ticket, numb-nuts.






(In other words, I don't necessarily want to know how the hot dogs are made.)

Last edited by 05c6silververt; 10-23-2018 at 07:25 PM.
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Old 10-23-2018, 07:23 PM
  #53  
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Originally Posted by jfb View Post
Did you receive a blow to the head recently?
Stop stealing my material.
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Old 10-23-2018, 07:24 PM
  #54  
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I'm in for 10 tickets.
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Old 10-23-2018, 07:27 PM
  #55  
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Originally Posted by Blue Lion View Post
I'm in for 10 tickets.
Tightwad!

If nobody hits tonight I wanna see that pot over $2B!
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Old 10-23-2018, 07:34 PM
  #56  
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$24 spent. lets see what happens. I can't imagine the guilt people will give if a win. I would just give my close friends and family members $500k each. Help the animal rescues with building better conditions for the animals.
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Old 10-23-2018, 07:34 PM
  #57  
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Not that any of us would ever win but.......

pay the extra buck for the multiplier or extra etc.

guy hit mega for 1 million at my local 7 11 and DIDN'T get the multiplier... his 1 million would have been FIVE MILLION.... ie the difference between never worrying about money again (5 after taxes being roughly 3 so living a decent life off the interest but not rich) and just paying off your house as maybe you end up with 650k. lol.
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Old 10-23-2018, 07:46 PM
  #58  
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Originally Posted by 05c6silververt View Post
Tightwad!

If nobody hits tonight I wanna see that pot over $2B!
dude...if no one hits tonight? GUARANTEED it will go over 2B. It's gonna be a mass frenzy if that happens......
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Old 10-23-2018, 08:36 PM
  #59  
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https://www.yahoo.com/entertainment/...212138825.html


America will be holding its breath until Tuesday nightís Mega Millions drawing. If you hit the $1.6 billion jackpot, youíll be able to buy 40 amazing apartments inside an NYC high-rise. That mind-blowing jackpot is a blessing, but it can also be a curse. Attorney Ann-Margaret Carrozza told Inside Edition of the risks when becoming an overnight billionaire. Rhoda Toth and her husband blew her entire $13 million Florida lottery jackpot she won in 1990. She also ended up in prison for tax fraud.
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Old 10-23-2018, 08:40 PM
  #60  
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13M ?! Dang, that's almost 25M in today's money. And they blew it all? tsk tsk.....

With that much money you are set for generations to come if you smartly manage that sum but alas......
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