We have a stock which returns 50% or −40%. If we put all our money in this stock, we are going to lose it over time since (1+.5)⋅(1−.4)=1+.1−.2<1 but on any given day, this stock has a positive expected return.
I like this example as a way of thinking about the problem.
I like this example as a way of thinking about the problem.