Letters
credit Where credit’s due
Thank you very much for the kind words
about Bono and me that appeared in
“Inside Track” in the new (and, I must
say, beautifully redesigned) May/June
2009 issue of Contingencies.
However, we would be total jerks
if we didn’t share the credit with the
other fine designers in our studio.
Ken Ceccucci began working with us
in 1997 and has delivered many of the
most clever and creative spreads and
covers for Contingencies since then. We
also must give credit to Tom Heffner,
Paul Philpott, Roger Selvage, and
Abigail Noonan. We are fortunate to
have such a fine pool of talent.
How do you want to celebrate
in 2029?
Tom specht
Arlington, Va.
Editor’s Note: Ken Ceccucci’s design
for the cover of the March/April 2008
issue of Contingencies was recognized
last month with a silver EXCEL award
from the Society of National Association
Publications.
organizational déjà Vu
have been told that the reorganization
of the profession is being revisited by
the leadership of the various actuarial
organizations. This leaves me with a
sense of déjà vu since that was a much-debated subject when I was president of
the Society of Actuaries (SOA) a quarter
of a century ago. My thinking about the
matter has evolved much since then, and
I would like to share it with the current
leadership.
I don’t believe we need fewer organizations, as long as each organization has
a clearly articulated mission with little
overlap with the others. I don’t believe
that happy state of affairs exists now.
I believe that the SOA and the Casualty Actuarial Society (CAS) should
clearly define themselves as the research
AmericAn AcAdemy of ActuAries ■ m Ay|Jun ■ 2009
Horse Sense
using Applied mathematics
to Game the system
and educational degree-granting quasi-universities of the profession. I see a
clear analogy with the way the legal profession operates. Law schools grant J.D.
degrees to those who complete a fixed
educational program, but to practice as
a lawyer, one must still pass bar examinations. The latter equivalent function
appropriately would be housed at the
American Academy of Actuaries in the
U. S. and at the Canadian Institute of Actuaries (CIA) in Canada. The Academy
might choose to delegate this function
to the SOA and the CAS, but the responsibility for this function would remain
with the Academy and the CIA, as would
the disciplinary responsibility.
The Academy would continue to
speak on public policy issues, just as
the American Bar Association does, but
the societies and their members would
share their research with policymakers
and the general public, explaining its
relevance for public policy issues, just
as law schools do.
I hope these thoughts are useful to
our current actuarial organizational
leadership.
dwight Bartlett
Annapolis, Md.
Beating the house
Back in the days when I was doing
actuarial science, I wanted to develop
a large amounts/low incidence method
of credibility that would go a step further. What I came up with was a model
casino that simulated (among other
things) the blackjack table. From there,
I let the computer grind away through
millions of hands and print out the
actual distributions of numerical combinations. I also put in various degrees
of skill using rules of thumb taken from
a sampling of gambling handbooks.
Given that the computer already knew
the order of the deck, I could include
card counting as well. The result was a
margin against skilled players of around
1. 5 percent. The source of the margin
was determined to be the lack of a re-fund when the house breaks a hand
(goes over 21).
What casinos want everyone to think
is that you can beat the house. Outlawing
card counting is a perfect sucker’s play.
Don’t let all the security cameras fool
you. Why am I certain the card-counting
myth is baloney? Consider the following
typical house rule: Any time during the
game, the dealer is entitled to substitute a new deck or reshuffle the shoe.
Thus, once a table starts losing money,
the cards are going to be reshuffled and
redecked, wiping out any possibility of
card counting.
As regards horse racing, I suppose a
computer model could help identify the
obvious anomaly that results when a race
is fixed (“Horse Sense: Using Applied
Mathematics to Game the System,” May/
June 2009). Before I would accept that
the process was robust, I would have to
see it demonstrated in a less subjective
environment, like dog racing. That the
Woods methods were affected by venue
supports this possibility.
Tim cole
