Good news! You can win a billion dollars just by figuring out who’s going to win a bunch of basketball games in the upcoming March Madness tourney. That’s $1,000,000,000. A lot of zeroes.
A lot of bunk too. One way you can be sure is the fact that Warren Buffett, the sage of Omaha, is insuring the guy running the contest against the remote possibility somebody will actually win.
One of the wiliest investors in history doesn’t make stupid bets and this isn’t one of them . Insurance constitutes a bit over a third of Buffett’s Berkshire Hathaway, includes 70 companies and produced $6 billion in operating income last year and $2 billion in profits.
The odds of somebody picking the brackets perfectly has been calculated at one in 9.2 quintillion. So don’t lose any sleep about Buffett being on the wrong side of this deal. Especially since the number of entrants is limited to the first 15 million to go online and sign up. Sounds like a lot, but the odds still vastly favor the house or Buffett wouldn’t be risking even one fifty-eighth of his fortune.
With a characteristic twinkle in his eye and tongue in cheek Buffett said if anyone is perfect at the time of the final game he can sit with him to watch the finale (and the crushing of his dreams, of course). “But I will not be cheering for him or her to win. I may even give them a little investment advice.”
Optimists will interpret that to mean Buffett will tell them how to invest their billion, but it is more likely Buffett will teach them his two rules of investing. Rule One: Never lose money. Rule Two: Never forget Rule One. Don’t those rules suggest Warren is pretty sure he’s on the winning side?
This is clearly all in good fun for Buffett and Dan Gilbert of QuickenLoans, the actual sponsor of this promotional stunt. Quicken is actually on the hook for prizes to the top 20 imperfect brackets, each of which will win $100,000 for a total of $2 million. But that’s peanuts and is less than it would cost to advertise during the tournament. The immense publicity has already paid off. And the gimmick promises to be even more valuable.
How? To sign up to play you give the QuickenLoans personal information and answer a questionnaire about home ownership. You can then look forward to a future without a billion dollars in the bank but with an endless stream of spam and other pitches for on-line mortgages.
In short, QuickenLoans is prospecting for loan customers from a pool likely to be rich in the kind of people who a) need money and b) think they can solve their financial problems by winning the lottery or picking basketball winners.
That’s a trifle sleazy if you think about it, perhaps even predatory since shooting the weakest members of the herd is hardly sporting. We all remember what happened the last time the gullible fell for fabulous deals on mortgages. And isn’t this a tad beneath the dignity of Buffett? But, hey, this is America. Let the Hunger Games begin.