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#21
11-20-2007, 04:43 PM
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Re: Staking dilemma
I would just like to point out that this is the person I have to deal with every day :
thayer: your post makes no sense Shaun: lol Shaun: fu Shaun: how doesn't it? Shaun: as long as its clear all 3 are in on the staking deal Shaun: when the horse gets out of makeup he gets all Shaun: but if the deal ends and it's -$ Shaun: then A B and C just sqaure up Shaun: and all have an equal loss thayer: do you nont understand what the dilemma is Shaun: that theres 9k in makeup from A backing him Shaun: while B and C want the action Shaun: if A hadhad say 60% of the action Shaun: and then had 20% and we had 20% a piece Shaun: then if the horse gets up 20k we would spit that up normally Shaun: I dunno how this sitatuon is ever different thayer: so you think we should each give A 3k Shaun: no Shaun: nothing Shaun: when the horse gets out of makeup Shaun: A just gets 9k thayer: so you think we should assume all future risk equally, while me and you get shafted on the 1st 9k Shaun: to cover what he fronted Shaun: yah Shaun: it's bascalilly as if we were always there Shaun: and A just gave him 9k to use first thayer: so its basically me and you picking up a player at a loss thayer: so A is freerolling thayer: do you not see this Shaun: no Shaun: we all have equal equity Shaun: and he just sent more to the horse Shaun: just like with X Shaun: we had equal shares Shaun: but I got like 30k of his makeup Shaun: cuz I had sent it to him thayer: no its not just like X Shaun: how so? thayer: nobody joined in on us staking him thayer: we were equally sharing in X's losses from the start thayer: it wasnt like hey thayer want to absorb half my losses thayer: and i was like yah ok Shaun: but we aren't absorving half his losses thayer: dude thayer: lol thayer: me and you miss out on the 1st 9k he makes, while A gets it thayer: yet me and you assume equal risk on future losses Shaun: but it's as if we were there from the start thayer: just imagine if he was stuck 10 billion dollars thayer: why would we do that thayer: where we share future losses while A gets the 1st 10 billion thayer: in future winnings 
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#22
11-20-2007, 04:45 PM
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Re: Staking dilemma
[ QUOTE ]
There is no fair or correct solution to this problem. The player is worth a certain amount to a backer, in NPV terms, over the length of the backing period, call it X (obviously X is subject to a great amount of uncertainty, but ignore that for a second). B and C should be willing to pay any amount up to 1/3 X for the right to receive 1/3 of the player's profits over the backing period. Obviously, if the player were JC Tran live or Imper1um online, B and C should be willing to pay a lot more than they would for someone else. Essentially, A is giving up something of very uncertain value -- to wit, 2/3 of the profits of the player -- and how the parties value that something is dependent on the parties. [/ QUOTE ] I agree with what you are saying, but look at it from the viewpoint where if A's horse was not in makeup he would bring him onto the team at no charge.
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#23
11-20-2007, 05:01 PM
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Re: Staking dilemma
[ QUOTE ]
[ QUOTE ] There is no fair or correct solution to this problem. The player is worth a certain amount to a backer, in NPV terms, over the length of the backing period, call it X (obviously X is subject to a great amount of uncertainty, but ignore that for a second). B and C should be willing to pay any amount up to 1/3 X for the right to receive 1/3 of the player's profits over the backing period. Obviously, if the player were JC Tran live or Imper1um online, B and C should be willing to pay a lot more than they would for someone else. Essentially, A is giving up something of very uncertain value -- to wit, 2/3 of the profits of the player -- and how the parties value that something is dependent on the parties. [/ QUOTE ] I agree with what you are saying, but look at it from the viewpoint where if A's horse was not in makeup he would bring him onto the team at no charge. [/ QUOTE ] Assuming the backers are getting 50% of the profits after makeup, then something in the ballpark of A gets 66 2/3, B gets 16 2/3, C gets 16 2/3 of the first $18K in total profit (i.e., $13.5K in profit to the backers) of the player, then 1/3 1/3 1/3 split after that seems to make sense. This is with all backers contributing 1/3 of each buy-in going forward. This lets A get the major share while the player is in makeup, but still gives B and C an incentive to back the player while he's in makeup. In fact, B and C are getting the same return on the player for the first $9K that they would be if he wasn't in makeup, since they don't have to split anything with the player. Run a spreadsheet with this as a starting point against various scenarios and I'm sure this will be close to agreeable.
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#24
11-20-2007, 05:14 PM
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Re: Staking dilemma
B and C don't pay anything initially but are in on staking the player from that point, but A gets the first 9k for his makeup then the rest is split proportionally. If player is truly +EV its still a good deal for all the backers proportionally.
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#25
11-20-2007, 05:17 PM
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Re: Staking dilemma
That is only correct if the deal is for forever, and if he is truly +EV.
I guess we have to take the % of time he doesn't get out of makeup/isn't +EV and multiply it by 3000 and that's the amount I owe. What is the % though, and yes I realize now it's not something really quantifiable.
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#29
11-20-2007, 05:39 PM
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Re: Staking dilemma
[ QUOTE ]
thayer if he stays down we would just each give 9k first then after 27k in makeup do it even. [/ QUOTE ] that actually makes sense. Over the next 18k in staking you dont pay and then pay 50/50 and you split profits 33/33/33
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#30
11-20-2007, 05:40 PM
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Re: Staking dilemma
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Linear Mode
