Why would u invest in the stock market when u can bet on sports?
seriously, the best traders make about 15% return a year,
while some people make the same return on a 3 hours tennis match betting on the favorite (federer)!!
besides, you pay no taxes on betting winnings and you really understand what you’re putting your money into, and the crowd expectations have no effect on the outcome (contrarily to the stock market where a rumor can make you lose money)
My question: why many people still invest on stock markets? how much do they really make? and do their return outweigh the brokerage fees???
n.b: while arbitrage opportunities on stock are almost inexistent (may last for a few seconds), they may occur on sports betting once in a while!!
thanks for your professional answers,
n.b: i have a great knowledge about options trading strategies and forex markets, so feel free to go technical!
by the way , I’m from France and lately, sports betting has become legal and there is no taxation on your gains!
Extra tags:
- can you make money with the sports stock market yahoo answers,easier to make money sports betting or stock market,when can u invest
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Tagged with: arbitrage • arbitrage opportunities • brokerage • brokerage fees • federer • forex markets • outcome • professional answers • return • stock markets
Filed under: Forex Systems
Good question. I think skill and knowledge play a much larger roll in success in trading stocks than in sports betting. I view the stock market as having maybe 90% perfect information. The Western countries public companies are highly transparent – the more research you do and the more you know, you have a good chance to succeed. On the other hand, I think sports has about 50% perfect information. Since there are human beings involved, you don’t know if Roger Federer had a late night the evening before a big match, or in the US if Terrell Owens took his anti-depression medication that morning. Put it another way – when the Yankees and Rays place a baseball game, it is very difficult to predict the outcome – the exact same players on the field in four games may have four entirely different outcomes. In stocks that would not be the case.
I like the no tax on betting wins. In the US, you must declare winnings and can only offset that income with gambling losses.
Investing in stocks and betting on sports are essentially the same thing. The only difference is that one bet is legal and the other is not. What I would like to ask you, is why would people bet any money at all in this new age of the internet? It is soooooo easy to make money now-a-days. All you have to do is buy crap at yard sales, post it on the internet, and you are literally guarunteed more than your initial investment.
after reading your n.b – i’m a bit scared!!
i suspect the word "great knowledge" now!!
the least complicated points i can say is that they are not regulated, counterparty risk, illegal in many countries, its also taxable!!
i like the question.
Okay let’s take a technical approach…what does a great sports analyst/bettor make short term….let’s say betting games of his choice for 30 days? Well at that short term of a range it wouldn’t be impossible to find someone that could get it right 60, 70 or even 80% of the time! Okay let’s go with him the guy batting .800 (or girl).
So let’s say out of 10,000 sports analysts you found the cream of the crop the guy/girl batting 80% and your money is up…if you pressed you’re bets up HUGE but if not then well up 80% which is still an amazing gain. You did that in 30 days….wow!
Let’s see what the next 30 days hold…you think he/she can bat 80% again? Well probably not but still 60% or 70% right?
Well let’s play that forward…what happens week in and out game after game in a year? In two years? In five years? Well if you come out after five years at even 51% winners you have a great guy and I’d say screw the stock market…BUT reality is that out of 1,000 bettors only maybe 200 are winners after a month….100 after six months (at best) and 5 or 10 after a year. Here is the issue you are betting week after week and have chance of double your money or nothing. Hey Vegas was built on this principle….eventually the odds DO catch up with you.
So a stock broker yeah boring…BUT if he can return an average investment (10.1% using S&P index of reinvested dividends year over year). Again this is an AVERAGE stock broker (by the way I’m not one) but okay so in seven years you double your money and again in seven years…again using AVERAGE return on investment numbers here. You can see in five ten and fifteen years well your sports guy is going to get his ass kicked on returns.
Can you guy beat a broker short term…hell yes…do you have the balls to bet half a million on a game at 51% chance where with a broker it’s about 93% he can get it doubled in seven years? Well if you have the balls do it…and double it again and again….you will either have 4 mil or be on suicide watch at a local hospital…..
a stock broker or just owning stocks (DRIP or DSPP) is proven better for safety long term for slow and steady growth…is the investment broker a genius…hell no. But he doesn’t have to be to earn 10% return year over year and have tax laws help you reinvest your gains.
A sports broker/picker…whatever you call him has to be incredibly skilled OR lucky and if you want to go that route why not just put your money on black or red on the roulette table? C’mon that’s just as good of odds.
Love the question, but if you know finance and compound interest etc you should know what the answer is.
Bookmakers make money, so somebody must be losing it, as no (or not much) wealth is created by gambling. They don’t run a "fair book", but skim off a little for their profit, so any odds are below the actual probabilities of a result. The risk/return calculation favours the bookmaker.
The economy however is (usually) growing. So risks in investments tend to favour the investor.
There is a huge difference between betting and investing, and the 2 cannot be compared. If you bet on a horse race, go to a casino, or buy a lottery ticket, within moments you either win or lose, that’s it. If you put money into the markets, and what you bought goes down, you do not lose until you actually sell. And there is always the chance the stock, bond, or fund will rise again.
Brokerage fees with the advent of the internet have drastically been reduced, so it is not a factor in purchases. True, professional investors may only make 15% yearly, but this is only an average. Some do great, and some fail.
If you invest for the long haul, meaning years even decades, your chances assuming you put money into A-rated stocks, will appreciate. Look at Warren Buffet for example. Buy when all is down, put it away, then when life is grand, sell some.
Because investing in the market, is akin to a sure thing (if you do your research).
Where-as betting on sports is gambling.
Because the more diverse your investments are the less chance you’ll lose everything. Whether is betting sports, the stock market, or trading baseball cards, the more, the merrier.
http://GoldenSportsBettingSystems.com
Stocks are for the long term gain, while betting is short term, thus short lived. It’s more advisable to go into stocks if you want security for the future, as government pensions are getting screwed over