Lone Ranger Economics
"If It’s Broke, Capitalize Before It Gets Fixed!"
In the winter of 1983, I won a trip (well, half of a trip) in a contest selling Cutco knives. Yes, Collin Manning, the same ones your sister sold! The trip was to Lake Tahoe and included a dinner show with Bill Cosby and the Temptations. I vividly remember the Dinner Show, vaguely remember the run I had through town on partially icy sidewalks, yet I do not remember the room I stayed in. But here is the most profound memory I had from the trip...
I was walking through the hotel lobby where the slot machines were. I did not have any inclination to play them as I knew they were rigged against the user. However, I did observe and chat with an older guy in his sixties that was having much success. I noticed that there was something wrong with the machine, which gave him a huge advantage...
There was an oscillating dial that rotated through “Single,” “Double,” and “Triple.” Any winnings would be multiplied by that factor. This dial was moving so slowly that it was easy to “choose” the right time to release to always hit the “Triple.” BINGO! We can always have a winner – well, almost.
Let’s assume that the slot machine was geared such that the normal payout was 45%. But the Double and Triple would increase that. Check out the chart, and the “Factor” was to be very random:
|
Factor |
Standard Payout % |
Effective Payout % (times Factor) |
Occurences |
Effective Payout (times occurence |
|
1 |
45% |
45% |
1 |
45% |
|
2 |
45% |
90% |
1 |
90% |
|
3 |
45% |
135% |
1 |
135% |
|
Total |
|
270% |
3 |
90% Avg. |
Therefore, on the average, the person at the slot machine would get back 90% of the money put into the system.
|
Factor |
Standard Payout % |
Effective Payout % (times Factor) |
Occurences |
Effective Payout (times occurence |
|
1 |
45% |
45% |
0 |
--- |
|
2 |
45% |
90% |
0 |
--- |
|
3 |
45% |
135% |
3 |
405% |
|
Total |
|
405% |
3 |
135% Avg. |
Being able to always nail the “Triple” factor will now provide a 135% payout to the one pulling the handle! Instead of losing 10% on the average, he was now profiting 35%. I believe the guy told me that he was making $200 or more a night! That would translate to a grand or two in 2021. BTW, the slot machine was a Silver Dollar slot machine – how ironic!!!
The system was broken. He capitalized on it, for at least several days. When a stock or commodity price drops for no apparent reason, such that it is under its value, then the system is “broken” and it is time to jump in and capitalize. In March of 2020, the price of Silver went way down when we had the "Lockdown Market Crash," which was just the opposite of what it was supposed to do! The pricing was "broken" then, and those that bought that month saw a 30% increase in one month when it rebounded back!
For those that have seen the movie "21," the concept is the same. While counting cards is not illegal, the casinos treat you like a criminal if you do. Card counters will identify when the ratio between good cards and bad cards get out of whack, thus determining that many more good cards are on the way. Basically, they know when the system is "statistically broken" and then go "all in" to make a killing.
This month, Silver is broken in a pricing way: The COMEX price has been manipulated downward when the demand is high (which are incongruous), so the silver dealers are actually buying above the current price on the COMEX rather than below it. The system is broken, and there are people out there that don’t realize it. Therefore, I have been getting some very good prices from those that are unaware that the current price is broken.
However, the whole system has been broken for decades, and the process is starting to get fixed (repaired is probably a better term). The longer something is broken, the more you can capitalize on it. When this system gets repaired, we will see triple digit, maybe 4 digit Silver prices. JUMP IN BEFORE IT GETS REPAIRED! I AM PLAYING THIS BROKEN SLOT MACHINE UNTIL IT IS REPAIRED!
It is a bit like what we talked about when Damian Lillard had excessive turnovers in a single game and missed an uncharacteristic number of free throws in our Champions! Fix What They Break talk. You can bet on him fixing things and that he will out-perform his "average self."
Don't try to
Hi Ho Silver, AWAY!