The Truth Behind Gambling and the Stock Market
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The Truth About Stock Market “Gambling”- Are Investors Just Gamblers in Disguise?
How Casinos and Stock Markets Use the Same Tactics to Keep You Hooked
Marcus Padley | 10 October 2024 | Education Corner
Las Vegas houses some of the world's most magnificent hotels. The Wynn, the Encore, the Bellagio, the Venetian, the Palazzo, the Palms, the Trump Hotel, the Aria, the Mandarin Oriental, the Mirage, the MGM Grand and Caesars Palace, to name just a few. And Caesars Palace in particular. It's the most colossal hotel and casino complex you have ever seen.
Begun in 1966, it now boasts six massive towers. The Forum, Roman, Centurion, Palace, the Augustus and now the Octavius. It has 3960 rooms, eight Roman-style swimming pools, 160 restaurants and shops, four gigantic ballrooms and three wedding chapels.
This is Caesar's Palace - a machine for exploiting losers.
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Inside Caesars Palace: The Psychology of Winning and Losing
The game in Vegas is to wow you with so much pizzazz that you don't see what's going on until it's too late. The classic example is the Palazzo, which is completely indoors and designed to feel like Venice at 8pm at night all day. Who wants to gamble at 9am? At the Palazzo, you do.
Of course, most people buy into the whole thing and have a blast - they go hard, spend their money and retire hurt with lifelong memories that make it worthwhile. But stay long enough and you see through it, if you care to, which is why Vegas is only ever a place you visit. It's not a place you live because if you stray too far from the game plan, walk about during the day, and stop to notice what's going on, then your epiphany will be that all those hotels, all those towers, all those incredible casinos were built on the backs of losers.
The Vegas Illusion – How Casinos Keep You Hooked
It is rather incredible, really, that despite Caesars Palace standing right out in the middle of the Strip as a gigantic, unembarrassed testament to the odds at a casino, people still turn up to play. Maybe that's why they bus you straight into the underground car parks - so you don't look around, so you don't notice, so you don't begin to question too soon just where all the money came from.
Australia’s Top Betting Giants: Where the Money Really Comes From
The $63bn of market cap of ASX listed gaming stocks is the Australian equivalent. A Monument to Australian losers.
- TLC (The Lottery Corporation - $11.1bn)
- ALL (Aristocrat Leisure $36.4bn)
- LNW (Light & Wonder $12.3bn)
- TAH (Tabcorp $1.1bn)
- SKC (Sky City Entertainment $1.0bn)
- JIN (Jumbo Interactive $850m)
- SGR (The Star Entertainment Group $815m)
- AGI (Ainsworth Game Technology $278m)
The Resilience of Gamblers – Why They Keep Coming Back
The indomitable spirit of the gambler runs deep. Losers are an incredibly resilient lot. Faced with almost certain loss, gamblers still turn up with hope in their hearts. It is almost noble. Almost. Although there is a fine line between courage and stupidity.
Are Stock Markets Just Another Casino
And the comparisons with the share market are inevitable. In the casino, they distract you with tits and feathers and disable you with drink. Meanwhile, somebody has their hand in your back pocket. In the share market, they dazzle you with colourful software, trading platforms, average returns, IPOs, dividend yields, franking, charts and the media iced by jargon, urgency and ever-thinning sophistication. Meanwhile, someone has their hand in your SMSF.
Trading Platforms and Financial Jargon – Tricks of the Trade
And the marketing is the same. Drive from the Las Vegas airport to your hotel and you will hear the taxi driver's story of the girl who put a single dollar in the pokie machine at the airport and won a million dollars; a delusion of success reinforced by casino-floor plasma screens showing winners and their hauls.
The Success Stories You’re Meant to Hear
And so it is that the share market also blinds us with books about ''How I Made $2,000,000 in the Share market'', by glorifying the success of Warren Buffett, exposing us to pictures of Rene Rivkin's yacht, by lauding the winners and forgetting the losers. One of the platforms of success in any form of betting is that while the winners buy Ferraris so we will notice them, the losers seek the dark corners of anonymity. Perfect for an industry that sells transformation. Thankfully, no one would publish a book called ''How I Lost My Kids' School Fees in Leveraged Derivatives''. Wouldn't want the losers telling their stories, would we?
Why the Odds Are Stacked Against Short-Term Trader
People love gambling, you can't stop them and they don't want to be stopped. The confusion for some is that the bookies have moved in and are using the jargon and integrity of the share market built over hundreds of years as a camouflage for short-term, highly leveraged, terribly risky bet taking. Let's face it, the share market has become a highly marketed gambling option.
Is the Stock Market a Gamble or an Investment?
But before you give up, you might like to know that while betting on share market prices with leverage and in the short term has proliferated, the investment market ploughs on in the background. It is still a game of odds, but if you can ignore the pizzazz, resist the urgency, turn off the noise and extend your horizon beyond having a blast, the odds are as good as they always were.
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