Codie SanchezFounder @ Contrarian Thinking

He LOST $9,000,000 Sports Betting as a Hedge?! #shorts

12 Oct 2022 · 1 min

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Short YouTube video by Codie Sanchez explaining that 'Mattress Mac' (a furniture store owner) places very large sports bets not as pure gambling but as hedges against promotional guarantees at his store. The host cites examples: a $9.5M loss betting on the Bengals (February, year implied prior to upload) and about $13M lost on the Houston Astros in 2019, and describes a promotion refunding customers who spent over $3,000 if the Astros won — exposing him to a potential $25M downside, which he hedged by betting the opposite side.

Questions this video answers

About $9.5 million (last February).

Approximately $13 million (2019).

Purchases over $3,000.

About $25 million.

Chapters

This guy makes multimillion dollar bets, but actually profits on them pretty much every time. He's called Mattress Mac. And everybody says he's a gambler, but he's actually the opposite. This furniture mogul is famous for placing these huge bets. He lost, like, $9.5 million last February betting on the Bengals to win the Super Bowl. I think he lost 13 million on the Houston Astros in 2019. But the truth is, his huge bets are just a hedge against his furniture store promotions to reduce his downside. Hedging means that you reduce risk by betting the opposite side of a wager. But Mattress Ma Long promotions at his furniture store that refund all his customers with purchases over 3k if the Astros won the World Series. So he had a downside of $25 million for this promotion if he didn't hedge against it. So he said, I'm gonna make a bet on the opposite side. The bed actually protects Mattress Max. And then he gets a ton of free press from him being a crazy gambler. He's not that crazy. What do you think? How can you take some gambles that basically have no risk?