First of all, some people do play games like that. But put that aside for a moment because it’s immaterial. Look at what Taleb is essentially saying: if there is a chance you will be ruined, and you play long enough, you will eventually be ruined. Even if that chance is 1%, probabilities add over time. 1.0170 = 2. If the chance of ruin is 1% then after 70 plays the chance of ruin is 100%.
What kind of math is that? In your contrived example it should be 1 - .99^70. It's hard not to question your background in probability when you're involving 1.01 and 2..
Nice ad hominem attempt, but even though I accidentally switched a minus for a plus, the point the math teaches is the same: risk of ruin accumulates with the number of bets.
You are assuming people are betting their whole bankroll on one bet. No one remotely sane does that. If you do something like betting constant amount then risk of ruin is often very close to 0 (and always less than 1 if you have an edge).
You are wrong twice there... sane people make that bet every day by smoking (limited upside gain, risk of ruin loss) and by taking many prescription medicines that have side effects including death.
Using a cell phone is taking that bet. You are betting that 50 years of cell phone exposure won't cause brain cancer. Nobody knows for sure yet, nobody has had cell phones for 50 years. I'm not saying it will or it won't cause cancer. I don't know. But it has the possibility of risk of ruin.
Second, constant amount betting does have risk of ruin even with an edge. Take a fair coin flip where you start with $500 and get $51 for heads and lose $50 for tails. A clear edge with a constant betting amount. In 100 flips, you have a 27.23% chance of ruin.
