Probability Of Ruin

Much of betting is about risk management and I consider myself more of an analyst than a gambler.

It does mean that, sometimes without me being aware that I’m even doing it, I will carry this risk assessment into my everyday life and I venture to suggest that we all do so, possibly not noticing that’s what we’re doing.

There is a rule that I run with and I know it as the probability of ruin.

If my life savings were £100 and placed it all on black at a casino I might win and double my money but if I lose then I lose everything.

A more enduring strategy would be to place only a part of that money on the risk. Granted I couldn’t double my money straight away but I’d know that come the next risk I’d still be able to play.

And so I look at many life events in a similar manner.

Which brings me on to the coronavirus. I know it’s difficult for a government to manage a risk such as this but their thinking strikes me as extremely muddled.

In my opinion they should have held the lockdown for a while longer because of a situation I regard as similar to the probability of ruin.

A strategy was in place. Lockdown existed throughout the country. The economy was hurting, people were hurting.

However, the virus is not under control. The number of cases and deaths has dropped but it hasn’t gone away.

There’s talk about the reproduction rate and that if it starts to rise then lockdown will need to be re-established. Good luck with that. People are out and about and won’t want to hear that, so you’ve got to feel you have the edge over the virus before you let people go about their daily routines.

A track and trace app is being trialled. There are many considerations about how and whether this will work but you know that if the virus gets another grip on us then track and trace will become useless because too many people will be infected. You simply won’t be able to use it.

So that’s another reason why the government should have delayed any announcement about relaxing lockdown. Even another week would have ensured that the number of cases was lower and given track and trace a greater chance of being successful and coincided with its introduction.

I know many are climbing up the walls and other illnesses and diseases are more prominent even if not being seen by the NHS. Having a further reduction in cases would also give the NHS more chance of getting somewhere back to normal a lot quicker. The infection rate is still high and so many people will continue to stay away from hospitals. If they could look at the risks and feel they have a good chance of survival by going to hospital, then many of the other illnesses have a chance of being treated.

As regards the broken economy, we have borrowed so much already -  another week would be painful but not inflict too much more of a dent in what’s already a horror story. If we try to get the economy back on track without due diligence a second spike could occur and a second spike would be even more disastrous than what we have experienced to date.

So, I believe we are running high risk for small benefit right now and should remember the original slogan.

Stay Home – Protect the NHS – Save Lives

The nearest thing to probability of ruin – a resurgence of the virus - is significant and would be a disaster for all of us.