Gambling vs. Investing

I am in Las Vegas this week.   I am gambling and having fun.  So far I am down $280.

There are similarities between gambling and investing, however there are key differences.  Here are the big ones:

  • Expect to make money investing; expect to lose money gambling.
  • Investing returns are best measured over a year or decade.  Gambling results are almost instant.
  • The “best” gambling is exciting.  The “best” investments are boring.

Trading stocks and especially options can turn investing vehicles into gambling vehicles.  However the opposite process is virtually impossible: turning gambling into investing.  Playing poker (well) can do this, but it is more like working a job than investing.  The best way to turn gambling into investing is to buy gaming stocks.

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