Before I get in any further, I just want to point out that I don't think gambling is a good investment strategy and should only ever be done with surplus money, money that can be lost.
So why could gambling be better than picking stocks?
Well, the concept between the 2 of them is the same. Identifying mispriced bets or stocks that provide good value for the risk they represent, and betting/buying that stock for gain.
However, the stock market, particularly in developed markets are very highly efficient. It is a completely free market mechanism where prices move with every trade and there is millions of market participants that are using all available information and buying and selling billions of dollars worth of stocks every day to determine fair price for that stock. Saying that you can pick stocks that have more upside potential than the market as a whole, with the same or lower risk is saying that you have more knowledge than all the participants combined.
With gambling on the other hand, the markets are more inefficient. The prices are set by the bookies and although do change, not every second of the day with every tiny bit of new information like how the stock market does. There is a much better chance of being able to identify inefficiencies within gambling markets.
That being said, bookmakers are very good and they consistently show very good abilities on setting prices.
So, should you gamble your way to retirement?
Absolutely not!
No investment strategy should ever be based on trying to outsmart markets. It can't be done. There is no harm in having a flutter or trying to pick some stocks, but should always be done with surplus money and never the core of any wealth creation or investment strategy. The core investment strategy should be highly diversified to capture the return of each asset class and the makeup of the asset classes for your portfolio needs to right for your goals, objectives and risk tolerance.
Obviously this post is a bit tongue in cheek and even though picking individual stocks, albeit may under perform the market, will likely be a better strategy than gambling, however the point of the blog is to highlight that due to inefficiencies in gambling markets, it would be easier to find mispriced bets than it would be to successfully find inefficiencies in investment markets to be able to outperform the market.
Obviously this post is a bit tongue in cheek and even though picking individual stocks, albeit may under perform the market, will likely be a better strategy than gambling, however the point of the blog is to highlight that due to inefficiencies in gambling markets, it would be easier to find mispriced bets than it would be to successfully find inefficiencies in investment markets to be able to outperform the market.
