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Lottery Dream


Always be nice to the people who play Lotto 6/49. You never know.

Although I’m not a frequent lottery player myself, the story is always the same. Like a regular Joe, I put off my will planning, tax filing, oil change, dentist visits, and etcetera. You name it. Yet, whenever I buy lottery tickets, I immediately kick off a fresh spreadsheet in my head planning how much to spend, how much to invest, how much goes to my parents, in-laws, siblings, relatives and friends. That’s right, my friends. You know the jackpot that I didn’t win? I was going to share it with you. How about that poker game, eh?

Not all investments must return tangible dollar figures. The odds of holding a winning ticket is 1 in 13,983,816, or 0.000007%. Why do people keep buying them when the odds are enormously low? Because it’s fun to dream, it creates excitement around the office, and it promotes positive thinking:

Ahhh, I stepped on dog poop! It must be my lucky day. I must buy Lotto 6/49.

Who says money can’t buy you (short-term) happiness? Don’t get me wrong, as I’m not a compulsive gambler. There is a propeller hat on my rationales. I usually wait for the big jackpots with these two theories in mind.

Theory One: Better Odds Without Paying More

Assuming a two-dollar ticket has a 1 in 13,983,816 chance of winning an initial jackpot of, say, $4 millions. If I wait for the jackpot to reach $28 millions, I can pool $14 with 7 friends to buy 7 tickets. Now I have a 7 in 13,983,816 chance of winning the same $4 millions for the same price.

Theory Two: Better Expected Return On The Dollar

7 in 13,983,816 is the same as 1 in 1,997,688. If you divide $28 million by 1,997,688, your expected return on a ticket is $14. Since each ticket costs $2, your expected return on a dollar is $14/2 = $7, or a little less if someone else holds the same numbers as you.

Boy. I’m such a nerd.

TSX Group


Just a quick update on my portfolio. I accumulated more shares to my existing TSX Group position today. The stock is down recently, because first-quarter profits of $0.53/share miss the consensus estimate by 3 cents.

I don’t mind it as long as revenues are up 15% on stronger listing and market data revenues. The drop in profits is attributed to raising costs, but it is not wasted money:

Expenses jumped 29 percent to C$47 million, due in part to additional employees taken on after the acquisitions of Shorcan Brokers Ltd. and certain fixed income assets from Scotia Capital last year.

Also boosting costs were advisory fees related to joint ventures TSX entered into with the International Securities Exchange Holdings Inc. and IntercontinentalExchange Inc. during the first quarter.

“While we continue to aggressively manage our cost base, we’re not going to hesitate to invest in initiatives that we believe will grow the business over the long term,” TSX Chief Financial Officer Michael Ptasznik said on a conference call.

TSX Group is the operator of Toronto Stock Exchange and TSX Venture Exchange. TSX Group has a consistent history of rising dividends, and is one of the few non-financial companies with 3+% yield.