Sports betting v. stock investing

[mdemps9190]

"Theoretically, any stock can go to zero, since prices are a function of investor demand. If no one wants to own a stock, you can't sell it at any price."

http://news.google.com/newspapers?nid=2482&dat=20020630&id=WaJbAAAAIBAJ&sjid=x1ENAAAAIBAJ&pg=1907,6767963

I won this argument hands down but I won't gloat because it wasn't a big deal really.

Dude it's unbelievable the lack of grasp you have on the markets. I do this for a living as well, and can say first hand, nobody half-smart would basically bet all their money on an IPO. That along with the liquidity factors would make it very difficult for your point to be correct.

Also any stock really couldn't go to zero. Regardless of demand, even when a company files bankruptcy their value of revenue alone would keep the stock from going to zero because PE buyers would vulture anything that came close to zero. So no matter how much anyone hates Intel, their intellectual property alone is worth more than that, and the stock price would never actually touch zero in a real world. Thats like saying that the efficient market hypothesis is real. Yes, theoretically stocks should have all information priced in at any given time, but that obviously isn't the case in practice.

You need to study a massive amount on how the market works if you think its as simple as that. Sports betting is somewhat similar, but as most have said, its all or nothing. You can't get 20% back on your investment if a team loses, but only loses by 1 point less than the spread or something. The only comparable financial instrument would be a binary option, where it's all or nothing in your payoff if your strike price is hit.

Now rethink the fact that you "won this argument" and PLEASE if you have any questions, think about how intelligent they are for 30 minutes before you post.

[slatter]

When you consider that a professional sports franchise is a company then is there really a difference between buying or shorting stocks and betting on or fading professional sports teams? Either way you're betting on the success or failure of a business enterprise, the only difference is the time period imho. However, sports betting and day trading could be equivalent in terms of risk.

What do you think?

It's interesting and something I've thought about before. There are parallels, though not direct comparisons like "Betting on Team X is like buying Stock Y."

One of the key differences would be expected value. All things remaining the same, your sports bet is around -5% or so because of the vig. Stocks should hypothetically rise with inflation, so you should see around a 1% or 2% gain yearly. In addition, stock is much more complicated and on a much larger scale then sports. The two are similar yes, but very different.

You lose money in sports betting through vig and you lose money in the market through fees, and it totally depends on the price you pay for a stock as to whether or not you're going to make money. Buying INTC a year ago would be a lot better than buying INTC today, for instance.

They are similar of course in the sense most people lose. The difference is the stock market is rigged.

LOL, sounds like someone is salty.

In all seriousness I think beating sports is going to be easier than beating the stock market.

Really? In October you could have bought $12,500 of Microsoft, Apple, Intel and McDonald's on October 3 and turned $50,000 into more than $66,200. You don't have to be an expert in stocks to understand great, blue-chip companies. That's a hell of a lot easier than trying to figure out if the Wizards will cover the spread tonight.

[rkelly110]

No difference between the two. It's still gambling. You can lose it all on either.

Stocks, risking 40K to make 1,500= dumb
Sports, risking 2k to make 1,500= smart

[neverstoppers23]

hard to compare the two at all. even over the worst 30 year periods in american history you still avg around 9 percent compound interest.

[mh217]

mh217 is too dumb to understand this

this is the funniest thing i have heard ever.. an uneducated moron is trying to tell me i dont have a clue...on your best day you couldnt pick anywhere close to the winners i pick in sports and the market...thats a fact...and your theory being you can make 1% of your bankroll plays on 100 games daily..i dont know where they grow idiots like you..first off good luck finding 100 plays a day that you have an informed edge on..for that matter good luck finding 100 plays a day at all...then we got this other moron that thinks its a normal occurrence for stocks to go to zero and that it can happen to any stock....we're not talking about trading penny stocks fool..companies have a balance sheet and assets..companies are worth hundreds of millions...its true stocks trade at a multiple based on the demand for the stock at the time, sure..but saying a stock can go to zero out of the blue is beyond retarded..it would take an amazing scandal or catastrophe to sink any major stock..even then you will have plenty of time to dump your shares at a 10-20% loss and cut your losses....i really hope you morons can ride that yellow brick road and get yourself some brains.