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WalterL comments on A hypothetical question for investors - Less Wrong
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Sure, but I think if you look into the crystal ball and see that XYZ has a 50% chance of UTTER RUIN and a 50% chance of business as usual you turn around and ask Omega to let you go back to the real world now.
That's 50% chance of going to zero and 50% chance of doubling, not business as usual. I don't see what's so unusual about it. For example, if you buy an option (a financial instrument, a call or a put) and it expires out of the money, it's worth goes to zero. That happens all the time and no one calls it UTTER RUIN. Of course you may not want to invest your entire worth into one...
Or if you want a stock example, imagine a small biotech company with a single drug going through FDA trials. If the drug fails, the company is basically worthless, if it passes, the company is rich. That's a double-or-nothing scenario and again, not particularly uncommon in real life.
By your hypothesis the stock has a 50% chance of utter ruin and a 50% chance of doubling every day. That is very unusual.
Well, the OP hypothetical is very unusual by the same criteria :-P