deleted user 436632456
Member
Does anyone ever work out their risk vs reward in ag?
So I buy a cow/calf pair for £2500, with the potential reward of £800 for the calf as a weaning -
First Year
(Reward/Risk) 800/2500 = 0.32 i.e. £1 risk for potential 0.32p gain or 1.32 in odds format
Buy 10 = £25000
100% Strike Rate Reward = £33000
95% Strike Rate Reward = £31350
90% Strike Rate Reward = £29700
85% Strike Rate Reward = £28050
80% Strike Rate Reward = £26400
75% Strike Rate Reward = £24750 - Loss Point
Average 6 Weaning's achieved over lifetime
(Reward/Risk) 4800/2500 = 1.92 i.e. £1 risk for potential £1.92 gain or 2.92 in odds format
Buy 10 = £25000
100% Strike Rate Reward = £73000
90% Strike Rate Reward = £65700
80% Strike Rate Reward = £58400
70% Strike Rate Reward = £51100
60% Strike Rate Reward = £43800
50% Strike Rate Reward = £36500
40% Strike Rate Reward = £29200
30% Strike Rate Reward = £21900 - Loss Point
I personally think the Suckler cow has a 60% chance of reaching the 6 weaning's sold over a lifetime, So it basically turns into a £25000 bet at a true odd price of 1.66 = £41,500 = £1650 return each from the 10 cows purchased over their lifetime
ROI = ((41500-25000)/25000)*100 = 66% ROI - Quite a good investment!!
Obviously these figures does not factor costs and market variables into it, I'm trying to figure out a base price to offset the costs to find the true market value (If you know what I mean)
So I buy a cow/calf pair for £2500, with the potential reward of £800 for the calf as a weaning -
First Year
(Reward/Risk) 800/2500 = 0.32 i.e. £1 risk for potential 0.32p gain or 1.32 in odds format
Buy 10 = £25000
100% Strike Rate Reward = £33000
95% Strike Rate Reward = £31350
90% Strike Rate Reward = £29700
85% Strike Rate Reward = £28050
80% Strike Rate Reward = £26400
75% Strike Rate Reward = £24750 - Loss Point
Average 6 Weaning's achieved over lifetime
(Reward/Risk) 4800/2500 = 1.92 i.e. £1 risk for potential £1.92 gain or 2.92 in odds format
Buy 10 = £25000
100% Strike Rate Reward = £73000
90% Strike Rate Reward = £65700
80% Strike Rate Reward = £58400
70% Strike Rate Reward = £51100
60% Strike Rate Reward = £43800
50% Strike Rate Reward = £36500
40% Strike Rate Reward = £29200
30% Strike Rate Reward = £21900 - Loss Point
I personally think the Suckler cow has a 60% chance of reaching the 6 weaning's sold over a lifetime, So it basically turns into a £25000 bet at a true odd price of 1.66 = £41,500 = £1650 return each from the 10 cows purchased over their lifetime
ROI = ((41500-25000)/25000)*100 = 66% ROI - Quite a good investment!!
Obviously these figures does not factor costs and market variables into it, I'm trying to figure out a base price to offset the costs to find the true market value (If you know what I mean)
