Business
Casino Math Can Power Your Portfolio: How Investors Can Win The Risk–Reward Game
Last Updated:
Winning more trades doesn’t mean winning more money. Alok Jain says long-term success comes from casino math—small losses, big winners
Casino Math
Investors often fixate on being “right” in the stock market by chasing the highest possible number of winning trades. But according to Alok Jain, founder of Weekend Investing, true long-term success in the markets comes from a counterintuitive principle: casino math. Addressing investors, Jain said the same probability-driven logic that enables casinos to earn billions can also help individuals build stronger and more profitable portfolios.
To explain the idea, Jain began with how casinos operate despite occasionally paying out massive jackpots. “A 25-year-old software engineer wins $39 million after betting just $100. Someone else wins $3 million on a $3 bet. Yet casinos continue to thrive because they focus on managing risk and reward—not on win rates,” he said.
In a typical setup, a casino might allow players to win seven out of 10 games. Even with that apparent disadvantage, the casino still profits because its losses are small while its gains are large. For instance, if the casino wins three rounds earning ₹100 each (₹300 total) but loses seven rounds losing ₹30 per round (₹210), it still makes a profit of ₹90. “The math defies intuition,” Jain explained, “but this is the essence of risk–reward.”
He then translated this concept into personal investing using a comparison between two investors—Ram and Sham. Ram wins 75% of his trades but settles for small gains while suffering large losses. Sham, in contrast, wins only 25% of his trades, but his winners are large and his losses are tightly controlled. At the end of the year, Ram ends up with just a 5% return, while Sham earns 13%. “The investor with more losing trades actually makes more money. That’s the power of reward overpowering risk,” Jain noted.
Jain said many investors behave like Ram because of loss aversion, a behavioural bias where losses hurt far more than equivalent gains feel good. This leads people to hold on to losing stocks in the hope of recovery, while booking profits too early on winning positions. “We deceive ourselves,” he said. “A stock falling from ₹100 to ₹60 is treated as temporary. Investors convince themselves it will bounce back, even as the damage keeps increasing.”
The impact of deep losses can be severe, Jain warned. A 50% fall requires a 100% gain just to recover. Falling another 30–40% pushes investors into an almost unrecoverable “ditch.” The core principle, he stressed, is simple: cut losses early and let winners run.
Jain also shared real data from a 242-trade systematic momentum strategy. Even though losing trades were higher than winning ones (52% losers versus 48% winners), the average winning trade delivered 25% returns, while average losses were capped at 9%. A handful of multi-bagger stocks—posting gains of 144%, 219% and even 298%—accounted for most of the portfolio’s overall performance. “Just like the Pareto principle, 20% of trades generate 80% of the returns,” he said.
The central takeaway, Jain emphasized, is that a high win rate does not guarantee profitability—risk–reward discipline does. “Don’t cling to losing stocks. Don’t fear rising stocks. Use stop-losses, churn smartly and allow the math to work in your favour,” he advised.
He urged investors to introspect on their behavioural biases and adopt systematic investing approaches that prioritise survival, consistency and large winners—rather than chasing bragging rights based on hit rates alone.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
November 30, 2025, 10:58 IST
Read More
The government on Thursday kept petrol and high-speed diesel (HSD) prices unchanged at Rs253.17 per litre and Rs257.08 per litre respectively, for the coming fortnight, starting from January 16.
This decision was notified in a press release issued by the Petroleum Division.
Earlier, it was expected that the prices of all petroleum products would go down by up to Rs4.50 per litre (over 1pc each) today in view of variation in the international market.
Petrol is primarily used in private transport, small vehicles, rickshaws, and two-wheelers, and directly impacts the budgets of the middle and lower-middle classes.
Meanwhile, most of the transport sector runs on HSD. Its price is considered inflationary, as it is mostly used in heavy transport vehicles, trains, and agricultural engines such as trucks, buses, tractors, tube wells, and threshers, and particularly adds to the prices of vegetables and other eatables.
The government is currently charging about Rs100 per litre on petrol and about Rs97 per litre on diesel.
One of Britain’s most prolific rail fare dodgers could face jail after admitting dozens of travel offences.
Charles Brohiri, 29, pleaded guilty to travelling without buying a ticket a total of 112 times over a two-year period, Westminster Magistrates’ Court heard.
He could be ordered to pay more than £18,000 in unpaid fares and legal costs, the court was told.
He will be sentenced next month.
District Judge Nina Tempia warned Brohiri “could face a custodial sentence because of the number of offences he has committed”.
He pleaded guilty to 76 offences on Thursday.
It came after he was convicted in his absence of 36 charges at a previous hearing.
During Thursday’s hearing, Judge Tempia dismissed a bid by Brohiri’s lawyers to have the 36 convictions overturned.
They had argued the prosecutions were unlawful because they had not been brought by a qualified legal professional.
But Judge Tempia rejected the argument, saying there had been “no abuse of this court’s process”.
JSW Jetour T2 Launch: JSW Motors Limited, the passenger vehicle arm of the JSW Group, is reportedly preparing to enter the Indian car market this year. It has partnered with Jetour, a China-based automotive brand owned by Chery Automobile, and the Jetour T2 SUV could be the company’s first product, according to the reports.
Media reports suggest that the launch will happen independently and not under the JSW MG Motor India joint venture. The SUV will wear a JSW badge and name, instead of the Jetour branding. The upcoming SUV will be assembled at JSW’s upcoming greenfield manufacturing facility in Chhatrapati Sambhaji Nagar, Maharashtra.
According to the reports, the company plans to have the vehicle on sale by the third quarter of this year. With this move, JSW aims to establish itself as a standalone carmaker in India.
Expected Powertrain
The SUV is likely to arrive with a 1.5-litre plug-in hybrid setup. Internationally, this hybrid powertrain is offered with both front-wheel drive and all-wheel drive options. It is still unclear which version will be introduced in India.
Design
In terms of design, the T2 is a large and rugged-looking SUV. It has a boxy and upright stance, similar to vehicles like the Land Rover Defender. Despite its tough appearance, it uses a monocoque chassis instead of a ladder-frame construction.
Size
The SUV measures around 4.7 metres in length and nearly 2 metres in width. This makes it larger than the Tata Safari, even though it is a five-seater. A longer 7-seat version is also sold in some markets.
Price
Pricing details for India are yet to be announced. For reference, the front-wheel-drive five-seat T2 i-DM is priced at AED 1,44,000 (around Rs 35 lakh) in the UAE.
Jetour
Jetour is a brand owned by Chinese automaker Chery. Launched in 2018, it focuses mainly on SUVs and is present in markets across China, the Middle East, Africa, Southeast Asia and Latin America.
Xreal files patent suit against rival smart glasses maker Viture
Princess Kate crowned England’s Great with fiery Lioness spirit
Soshiotsuki wows with international debut at Pitti Uomo 109
-
Politics1 week agoUK says provided assistance in US-led tanker seizure
-
Entertainment1 week agoDoes new US food pyramid put too much steak on your plate?
-
Entertainment1 week agoWhy did Nick Reiner’s lawyer Alan Jackson withdraw from case?
-
Business1 week agoTrump moves to ban home purchases by institutional investors
-
Sports5 days agoClock is ticking for Frank at Spurs, with dwindling evidence he deserves extra time
-
Sports1 week agoPGA of America CEO steps down after one year to take care of mother and mother-in-law
-
Business1 week agoBulls dominate as KSE-100 breaks past 186,000 mark – SUCH TV
-
Sports6 days ago
Commanders go young, promote David Blough to be offensive coordinator