"Sports betting is a matter of odds, while investing is something more based considering we have done our home work and we understand how the market works." That's really a distinction without much of a difference. If you watch the folks at Tasty Trade (and I encourage you to do so) they look at investing in the market almost exclusively as a matter of odds. They believe in the power of large numbers and make 'bets' on the market no different than people do on the Mavericks. The general principles that work in markets will work in sports - hedging, middling, scalping ect. But, because of the electricity, immediacy and binary nature of sports betting, it's much more difficult for gamblers to manage their money. In short, the markets do behave similarly enough that you should expect similar returns. The problem it turns out, as is the case with bad drivers, is the nut behind the wheel.
To add to that, sports betting is also a matter of doing your homework, it's evaluating the odds given to you by the bookie and making your own assessment whether that is an exploitable number, if you think team A has a 20% chance of winning and the bookie is giving you a 10-to-1 payout, then you might want to invest in that, if they only paid 5-to-1 however, it wouldn't be worth it.
I agree Mike, one thing are odds, other thing is a knowledge that we have acquired that allows us to invest in the stock market, two different things.
They are similiar in the sense that you need to have specialized knowledge and the want/ability to research each individual bet or invesment, but sports betting fluxuates far more in the short and long-term. The top sports bettors in the world only hit on 55-57% of their picks over a long-term sample. That means,you're almost always in a coin-flip situation for your money; which can get stressful if that's your primary source of income. Sports betting as its perks and is certainly fun to put more "stake" on a game, but if you want a more reliable way of making money, then investing is the better option.
The thing about making frequent "bets" in the markets is that it is very costly to the smaller investor. You eat away principal with transaction costs, realized losses, and short term capital gains taxes on profits. And the high tech automated high frequency trading systems are faster than any human and usually buy cheaper and sell higher. The best scenario IMO for a human trader who sits in front of the computer and tv all day and frequently buys and sells is that he: 1) has lots of money - at least millions; enough money to make the expenses of transaction costs and STCG taxes not be able to eat up too much principal too fast, and enough to have some invested separately in an income portfolio that pays him a salary to live on while he hopefully maintains and builds up his trading account (easier said than done). and 2) has some sort of edge that enables him to win at least 51% of the time, and that his losses are kept small (say 1% or less on average) and his gains large (say at least 2% or so on average). The average net gain amount and gain / loss amount ratio need to be of big enough scale to minimize the impact of transaction costs and taxes that eventually must be paid. Ideally taxes could be paid from a separate cash account.
As much as I love sports, I'd rather go with investing. I'm a far better investor than sports better, and the long-term growth of stocks makes the difference for me. If I "bet" $100 on the stock market, I can almost guarantee myself a couple percentage points of growth at worse and a lot more than that at best. If I throw $100 on one game of baseball, then chances are good that I'll lose more often than I win, even though I know baseball like the back of my hand. I'm sticking with the stock markets!
The biggest reason why stocks are a better form of investment than gambling is that gambling is a zero-sum game. Someone always wins, but someone else has to lose the same amount. There are just fewer profits to go around. The stock market, however, can produce a net gain for everyone because it's a capital market. Somewhere down the line, that money is being invested by companies and governments to increase economic activity. That doesn't mean you will "win" all the time, but it does mean that over long periods of time, you can expect a positive return.
That's so true, betting and gambling also have the luck factor involved and that's what annoys me the most, I won't invest anything based on luck.
Stock investing. Sports betting is far to risky, has way to high of a chance of causing you to lose your money and is essentially guessing. Stock investing is instead calculated risk rather than just guessing.
