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

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

Investing in the stock market successfully can be a way to make big money by leveraging your knowledge but, as the golden rule goes, the value of your investment can always go down as well as up. Betting on sports and casinos, meanwhile, can also be a way to use strategy and knowledge to run a profit, and it also comes with an element of risk. Putting these facts side by side, a lot of people will be tempted to say that there isn’t a lot of difference between stock trading and betting. So the question should at least be asked. Are they that different? Or are these speculation methods just two sides of the same coin?

If you’ll pardon that 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’ve seen over the years that a respectable reputation is absolutely no guarantee of respectable behavior or success. So we won’t be comparing the two on that metric, because conventional wisdom is often not worth the paper it is written on. Instead, we’ll look at the elements they share, and see whether they’re alike on anything more than a surface level.

There is always an element of risk

While it’s comforting to tell yourself that your stock investment is more valid than a sports bettor, who are using bonuses and offers at sites listed at oddsninja.com to place a sports bet, the truth is that that’s a hard argument to justify on the numbers. Your stock trade has the potential to gain in value only because the possibility exists that it will also lose value. The market forces that drive value up can also work in reverse. And while some investors make enough money to retire in their late 20s with their financial independence assured, they are in the minority. Some traders also see their kids’ college funds wiped out in a weekend of market turbulence.

Sports betting is more prone to emotion

One way in which the markets and gambling do diversify is that sports betting is not just a case of numbers going up and down. It’s people on a court, a field or any other playing surface, sweating and bleeding until they win or lose. And if you’re a sports bettor, you’re likely to also be a sports fan, which makes it hard to divorce emotion from the process.

Even if your team is not involved, it’s hard not to bring a bias into play when you bet for long enough. You may be a fan of Barcelona, and resolve never to bet on them because emotion and investment should not mix. But how far does that go? Do you also not bet on Real Madrid, because you hate them? Or on Manchester City, whose coach once coached your team? Betting emotion-free is a tricky thing to do.

Analysis and predictive tools exist for both

It’s easy to point to the graphs and charts that make up market analysis and say that investment is based in real, verifiable data. It’s harder to keep making that argument after ten minutes talking to any sports fan about stats. They can tell you how many games their quarterback has won in games on the road 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 value betting is based in its entirety on analyzing where bookies have made a misstep. There may be many differences between betting and investment, but those differences are usually a lot shallower than we like to tell ourselves they are.

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