Are stock trading and betting just two sides of the same coin?

Investing in the stock market successfully can be a way to make a lot of money by leveraging your knowledge, but as the rule of thumb goes, the value of your investment can always go down as well as up. Betting on sports and casinos, on the other hand, can also be a way of using strategy and knowledge to make a profit, and it also comes with an element of risk. Putting these facts side by side, many people will be tempted to say that there is not much difference between stock trading and betting. The question therefore deserves at least to be asked. Are they so different? Or are these methods of speculation just two sides of the same coin?

If you forgive this unfortunate and accidental pun, it’s time to apply some analysis to the argument. While one of the two is considered more respectable than the other, we have seen over the years that a respectable reputation is absolutely no guarantee of respectable behavior or success. So we won’t compare the two on this metric, because conventional wisdom often isn’t worth the paper it’s written on. Instead, we’ll look at what elements they share and see if they resemble anything other than at the surface level.

There is always an element of risk

While it’s comforting to know that your stock investment is worth more than a sports bettor, who uses bonuses and offers on sites listed on to place a sports bet, the truth is that it is a difficult argument to justify on numbers. . Your stock trade has the potential to gain in value only because it may also lose value. Market forces that drive up value can also act in the opposite direction. And although some investors make enough money to retire in their late twenties with their financial independence assured, they are in the minority. Some traders are also seeing their children’s college funds wiped out during a weekend of market turbulence.

Sports betting is more subject to emotion

One of the ways markets and gambling are diversifying is that sports betting isn’t just about numbers going up and down. These are people on a court, field or any other playing surface, sweating and bleeding until they win or lose. And if you’re a sports bettor, you’re probably also a sports fan, which makes it hard to separate the emotion from the process.

Even if your team isn’t involved, it’s hard not to play bias when you bet long enough. You may be a fan of Barcelona, ​​and decide never to bet on it because emotion and investment should not go hand in hand. But how far does this go? Don’t you bet on Real Madrid either, because you hate them? Or Manchester City, whose coach once coached your team? Betting without emotion is a tricky thing to do.

Analysis and prediction tools exist for both

It’s easy to point to the charts and tables that make up the market analysis and say that the investment is based on real, verifiable data. It’s harder to keep making that argument after ten minutes of talking with a sports fan about the stats. They can tell you how many games their quarterback has won in road games during the month of December in each of the last five years. And usually they can tell you what the weather was like in those games. The existence of the value bet is based in its entirety on the analysis of where the bookmakers have misstepped. There can be many differences between betting and investing, but these differences are usually much shallower than we like to tell ourselves.

Comments are closed.