Yesterday, I was having a discussion with one of my friends who happens to be a financial planner. This is one of my very few friends who actually knows that I invest in the sports markets and we started to talk about the similarities between his managing of 401K's, other retirement funds and general stock market investments to my investments in the sports markets. He also will make occasional sports wagers so he understands the business, but does not invest seriously in sports. Throughout our discussions the similarities between the two industries were striking and just reenforces my point that we should all approach this business as though we are trading stocks or as if we were our own financial advisor.

Both investment strategies require intelligence, discipline and money management to be successful. In addition, both the sports investor and financial specialist needs to understand market principles, including but not limited to the market efficiency concepts. If people operated their sports investments just like their financial advisor operates their other investments, most would be more successful in sports markets.

Throughout our discussion, it became clear that the main obstacle in sports "gamblers" as opposed to "investors" is the degeneracy in making "action" wagers and parlay wagers which are not correlated and have no positive expected value. I pride myself on not making a play unless I have distinct and discernible edge. Likewise, in financial markets, the stock trader or hedge fund manager only makes those trades that he has researched thoroughly and feels as though has has an edge on the rest of the market. Consequently, if most people approached sports investing with this mindset, they would be much more successful.

This conversation really confirmed my belief that we should all approach this business as though we were financial experts in the stock market or similar field. To that end, I started reading a few articles on the similarities and though I would share. Here are the links for your reading pleasure. Enjoy!

http://www.thinkingbettor.com/sports...icient-market/

http://beyondthebets.com/forum/showthread.php?tid=1959

http://www.betstarter.com/SportsBett...entArticle.asp

http://blogmaverick.com/2004/11/27/my-new-hedge-fund/ (see even Mark Cuban agrees LOL)

http://www.wired.com/magazine/2010/11/ff_midas/all/1