Lottery - Stock market (Full Version)

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P31W -> Lottery - Stock market (5/22/2008 9:31:52 AM)

What is the differances between the two. From a Financial point of view.



NoShow -> RE: Lottery - Stock market (5/22/2008 9:43:00 AM)

Well, a Lottery is a game of chance in that no skill can improve the likelihood of winning. A PhD in mathematics doesn't have a better chance than a high school graduate.

With the stock market, skill (i.e. knowledge) can increase one's likeihood of "winning". Of course, to someone with no knowledge and\or someone just guessing about the stock market, then there's probably no difference.



trainfan -> RE: Lottery - Stock market (5/22/2008 9:58:37 AM)

NoShow is correct about both the stock market and the lottery.

Another difference is in the stock market you own a piece of the business you buy stock in, albeit a small piece. In some cases the value of the company may decrease and eventually be worth nothing. But in the vast majority of cases the stock prices rise this may take years and the stock may go up and down in between time. Some companies pay dividends to shareholders also so you get a share of the profits of the company you own part of. Over the long term stocks have the potential to make money. By carefully researching companies and reading financial related magazines and books you stand a better chance of making money than losing money.

With a lottery ticket once the drawing is over so is its potential to make anything. No matter how long you research the lottery and how much you read about it your chances of winning remain the same.



bluestone -> RE: Lottery - Stock market (5/22/2008 10:03:32 AM)

Attitude.

In the stock market, you can either invest in companies you feel will earn a profit over the long term, or you can try to "play" the market and make quick money. Which is gambling.



GroupW -> RE: Lottery - Stock market (5/22/2008 10:16:30 AM)

Said differently:
The lottery is a game designed to benefit the lottery sponsor and raise money. In the long run, on average, you lose.

The stock market is a capital raising system designed to benefit both companies and investors. Companies get needed cash/capital. Investors (usually) get a return on their money and liquidity via a trading mechanism for converting their stock back into cash. In the long run, on average, investors win.



P31W -> RE: Lottery - Stock market (5/22/2008 10:19:37 AM)

Great replies!!!!

Keep it up.



JimboFletch -> RE: Lottery - Stock market (5/22/2008 10:22:09 AM)

Over the longterm, putting money into the stock market pays back more than your investment. The market, when intelligently used for investing, is based on concrete businesses with genuine products and services.

Lottery/casinoes/gambling in general is a pipe dream of easy money without an honest exchange of goods or services. Longterm for most people, it's probably no more profitable than going to Disney World for a week.



P31W -> RE: Lottery - Stock market (5/22/2008 10:35:03 AM)

blessedinnyc

I see you lurking. I expect something good from you.



blessedinnyc -> RE: Lottery - Stock market (5/22/2008 10:35:27 AM)

They're pretty much the same. The only difference is that the stock market can be arbitraged. I think a more valid comparison would be to compare the stock market to a blackjack table with two decks of cards and a dealer who isn't going to kick you out if he/she notices you betting $5 here and $200 there.

Sadly, the number of decks in play has been increasing in the markets over the past five years, but there's still plenty of money to be made. As for me, let me know if you find any casinos that have favorable blackjack tables.



JimboFletch -> RE: Lottery - Stock market (5/22/2008 10:54:56 AM)

quote:

ORIGINAL: blessedinnyc

They're pretty much the same. The only difference is that the stock market can be arbitraged. I think a more valid comparison would be to compare the stock market to a blackjack table with two decks of cards and a dealer who isn't going to kick you out if he/she notices you betting $5 here and $200 there.

Sadly, the number of decks in play has been increasing in the markets over the past five years, but there's still plenty of money to be made. As for me, let me know if you find any casinos that have favorable blackjack tables.

I have over $130,000 invested in stocks over 20 years of between 2% & 3% of my salary (which ain't that big). What do you suppose I'd have if I used that money at blackjack, lotto, or lottery? My guess would be an empty wallet.



mrtigger -> RE: Lottery - Stock market (5/22/2008 10:57:46 AM)

quote:

ORIGINAL: P31W

What is the differances between the two.


Long term, the stock market goes up. There are times when it is frothy & overpriced and goes down for a while but over the long term, a diversified stock investment will almost certainly grow. Long term "investing" in the lottery will almost always result in complete loss of your money.

If someone has moral objections to gambling and believes stocks are a form of gambling, then by all means, feel free to stay out of it. However, I do not share that view.



NoShow -> RE: Lottery - Stock market (5/22/2008 11:01:24 AM)

quote:

ORIGINAL: blessedinnyc

They're pretty much the same. The only difference is that the stock market can be arbitraged. I think a more valid comparison would be to compare the stock market to a blackjack table with two decks of cards and a dealer who isn't going to kick you out if he/she notices you betting $5 here and $200 there.

Sadly, the number of decks in play has been increasing in the markets over the past five years, but there's still plenty of money to be made. As for me, let me know if you find any casinos that have favorable blackjack tables.


Twenty-five years ago, I wrote a paper comparing blackjack card counting and stock technical analysis for a college investment class. The Prof gave me an A++ and said, "I don't care what you do or don't do for the rest of the semester. I'm giving you an A in the course on the merit of that paper alone."



kernsfamily -> RE: Lottery - Stock market (5/22/2008 11:07:25 AM)

quote:

ORIGINAL: NoShow

quote:

ORIGINAL: blessedinnyc

They're pretty much the same. The only difference is that the stock market can be arbitraged. I think a more valid comparison would be to compare the stock market to a blackjack table with two decks of cards and a dealer who isn't going to kick you out if he/she notices you betting $5 here and $200 there.

Sadly, the number of decks in play has been increasing in the markets over the past five years, but there's still plenty of money to be made. As for me, let me know if you find any casinos that have favorable blackjack tables.


Twenty-five years ago, I wrote a paper comparing blackjack card counting and stock technical analysis for a college investment class. The Prof gave me an A++ and said, "I don't care what you do or don't do for the rest of the semester. I'm giving you an A in the course on the merit of that paper alone."


Picking INDIVIDUAL stocks is not far from "Gambling" (the risk is very high in most instances).....though, disciplined investing in the "stock market", through mutual funds and indexed funds, is NOT....it's "Investing"....and are totally different.

black jack card counting.....isn't that cheating???



P31W -> RE: Lottery - Stock market (5/22/2008 11:14:59 AM)

quote:

black jack card counting.....isn't that cheating???


It's only considered cheating because the house is not there to entertain you or play fair. They are in existance to make money. Brains are not allowed to be used.



trainfan -> RE: Lottery - Stock market (5/22/2008 11:16:19 AM)

quote:

Picking INDIVIDUAL stocks is not far from "Gambling" (the risk is very high in most instances).....though, disciplined investing in the "stock market", through mutual funds and indexed funds, is NOT....it's "Investing"....and are totally different.


It depends on the individual stocks you invest in. I own both mutual funds and individual stocks and have to say the individual stocks have out paced the mutual funds quite well over the 5-7 years I have owned them with lower fees to boot. The key is invest in large stable established companies over a long period of time and reinvest the dividends. Investing in start-ups is much closer to gambling.



NoShow -> RE: Lottery - Stock market (5/22/2008 11:24:02 AM)

quote:

ORIGINAL: P31W

quote:

black jack card counting.....isn't that cheating???


It's only considered cheating because the house is not there to entertain you or play fair. They are in existance to make money. Brains are not allowed to be used.


The casinos sort of lost that battle in court. The games at casino are suppose to all be games of chance, meaning no skill factor. The casinos stance that card counting gave the player a better "chance" was seen as a possible admission that blackjack was not a game of chance. So as not to face the possibility of the removal of blackjack, the casinos changed their tactics and went to multiple decks, frequent shuffling and removal of undesirable ("we reserve the right to refuse service to anyone we please, without having to give a reason why") players.



GroupW -> RE: Lottery - Stock market (5/22/2008 12:03:26 PM)

quote:

ORIGINAL: blessedinnyc

They're pretty much the same. The only difference is that the stock market can be arbitraged.


Gambling returns are also more lepto-kurtotic (fat tails, low average). Gambling has a negative mean return with a hugemongombous variance (on average you lose, but when you win, you win big.. The stock market has a positive return (10-12% depending on how you measure it.) and a modest variance.



LCannon -> RE: Lottery - Stock market (5/22/2008 12:25:13 PM)

Loose Cannon's Guide to Investing

1. Invest what you can afford to lose. Remember the initial talents? They were the master's.
2. Research and invest and follow. Never invest purely on another's word or hunch.
3. When you decide to sell take your gain and run! Never look back.
4. When you take a loss it's only money. Refer back No. 1.



GroupW -> RE: Lottery - Stock market (5/22/2008 12:30:40 PM)

quote:

ORIGINAL: LCannon

Loose Cannon's Guide to Investing

1. Invest what you can afford to lose. Remember the initial talents? They were the master's.
2. Research and invest and follow. Never invest purely on another's word or hunch.
3. When you decide to sell take your gain and run! Never look back.
4. When you take a loss it's only money. Refer back No. 1.


As an investment professional, I tend to disagree with #1 unless you're excluding mutual funds. As a rule of thumb, people tend to keep 30-80% of their savings in stocks, usually via mutual funds.

If you're talking about investing in individual stocks, then I tend to agree.



bzirk -> RE: Lottery - Stock market (5/22/2008 12:56:36 PM)

quote:

ORIGINAL: P31W

What is the differances between the two.


For there to be a difference, it depends on how someone views the purchase of stocks.



P31W -> RE: Lottery - Stock market (5/22/2008 1:35:15 PM)

quote:

For there to be a difference, it depends on how someone views the purchase of stocks.


My mother purchased me a lottery ticket and a share of stock. What is the differance?



blessedinnyc -> RE: Lottery - Stock market (5/22/2008 3:08:55 PM)

quote:

ORIGINAL: kernsfamily
black jack card counting.....isn't that cheating???

Only if it's cheating to calculate where to build houses in Monopoly based on the other players' positions on the board.



JimboFletch -> RE: Lottery - Stock market (5/22/2008 3:22:30 PM)

quote:

ORIGINAL: P31W

quote:

For there to be a difference, it depends on how someone views the purchase of stocks.


My mother purchased me a lottery ticket and a share of stock. What is the differance?

Is the stock in Microsoft or a Horse-Drawn Carriage company?



P31W -> RE: Lottery - Stock market (5/22/2008 3:42:17 PM)

No it's in some aluminium company. (sp?)



P31W -> RE: Lottery - Stock market (5/22/2008 4:24:31 PM)

Just to make sure this stays on a "financial perspective" I edited the OP.



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