Continuous Productivity

Oil Lottery

North Dakotans are becoming instant millionaires because of oil:

Landowners in western North Dakota have a much better chance of striking it rich from oil than they do playing the lottery, say the Stohlers. Some of their neighbors in the town of about 120, from bar tenders to Tupperware salespeople, have become "overnight millionaires" from oil royalty payments. "It's the easiest money we've ever made," said Lorene Stohler, who worked for decades as a sales clerk at a small department store. State and industry officials say North Dakota is on pace to set a state oil-production record this year, surpassing the 52.6 million barrels produced in 1984. A record number of drill rigs are piercing the prairie and North Dakota has nearly 4,000 active oil wells.

I wonder if this money lasts longer than the typical lottery winnings.

How Wise are Crowds?

The Wisdom of Crowds has been touted as panacea for the prediction markets. The criticisms, though, of late are coming fast and furious. WSJ gets on the wagon:

The problem with these markets, Mr. Plott says, isn't that they are thinly traded, a common complaint, but that they are often plagued by bad information. That leads to bubbles, head-fakes and manipulation -- just like in the stock markets.

The people who bought Rudy Giuliani presidential futures had no better insight than the people who bought Yahoo at $100 a share.

I happen to agree. I think the bulk of these markets, just like any market, are driven by misinformed and under-informed traders that parse the same information from the same news sources. So, you have people trading on information from the media that has been proven wrong time and again.

Pleasant Surprise

"He placed five more 50p bets for Saturday's racing, then asked staff to check his betting slip from the day before. When they told him he had £1 million to come but would have to collect it from the Thirsk shop, he went visibly pale before saying that he would have to go and tell his wife."

That's a nice turn of luck for a gentleman that seems to be doing this as casual recreation.  He was using an accumulator bet and got all 8 horses in a row correct:

The bet allows the punter to choose four or more selections. If the first selection wins, all the money from the original bet and the winnings goes on to the next selection. If that too wins, all the money again goes on the next selection and so on.

Now that's what you call compound interest.

Risk is a Drug

In news that shouldn't surprise anybody that has ever traded or gambled:

A small group of scientists, including some psychologists, say they are starting to discover what many Wall Street professionals have long suspected — that people are hard-wired for money. The human brain, these researchers say, responds to high-stakes trading just as it does to the lure of sex. And the riskier the trades get, the more the brain craves them.

I don't know quite how I feel about brain images as data, but it is interesting to note that:

One of his findings was that brain images of drug addicts who are about to take another hit are indistinguishable from those of traders who are making money and about to place another trade. “That tells us pretty confidently that if you make money and make money again,” Mr. Zweig said, “it is very similar to a chemical addiction and it becomes very hard to let go.”