For years, sports betting and gambling were considered taboo by members of the media and sports fans across the United States. While watching “The Last Dance” on ESPN, it was striking how wild the conspiracies were about the murder of Michael Jordan’s father, just because it was known that Michael enjoyed gambling.
Now, when sports fans casually brag about their exotic bets which were once considered terrain for only the lowest degenerates, we laugh about it.
To be fair, there are tangible reasons why sports betting was and is frowned upon. People can become and are addicted to gambling. Betting can trigger and intensify other compulsive behavior. The list goes on.
Betting markets are set up so that bettors are expected to lose money over time. As we’ve discussed before, it’s important to keep sports betting fun. We don’t have the resources pro bettors have. And as Montanans, our only legal sports book sets the price of 50-50 odds at -118 (wager 118 to win 100).
Conversely, you can actually expect to make money in the stock market because it is expected improve over time. That is a fact. If you were to put a list of stocks on the wall, throw darts at the list and invest in whichever stocks you hit with said darts, most or all of those stocks would probably make at least a little money eventually.
So, why bet?
When confronted with this question by a friend or loved one, the mental gymnastics can be exhausting. Muttering the phrase, “You just don’t get it,” probably doesn’t suffice.
Recently I came across a column on Seeking Alpha by Mike Lipper who is a CFA and Caltech trustee. He was explaining how betting horses taught him how to be a better investor, and that got me thinking: “Surely, I’ve also learned a few things betting sports that have translated into my investing as well.”
I’ve put together an argument that should silence even your harshest anti-gambling critics, in the form of four ways sports betting can make you a better investor.
It’s important to be realistic with yourself and know how much money you actually have to play with. You could be a stock-trading savant, but if you have credit card debt charging you 18% interest on your balance each month, you probably should be paying that off first. It’s also critical to only invest as much as you’re willing to lose. Yes, the stock market will theoretically improve over time, but you never actually know what is going to happen day-to-day.
When your hard-earned income is at stake, it’s important to do your research. Try to figure out a buy price and sell price. Ideally, you wouldn’t want to dump a sum of money into a stock if it has maxed out its potential. This is like betting a huge moneyline favorite. Most of the time it’ll pay off a little bit, but once in a while it doesn’t and there goes your entire bankroll.
Remember, it’s a long game. Some days you’re going to make money. Some days you’re going to lose money. It’s important to keep a steady course because the market will correct itself. If you’re down, don’t try to get it all back in one day. If you’re up, don’t start spending more just because you had a couple of good days in a row. You’ll be more profitable if you can stand having your money tied up for longer periods of time. If you set a target date of when you need money, that’s when devastating losses can occur.
You can’t be afraid to look stupid. A loss is a loss. If you put in the work, did the research, considered the risks and things just didn’t pan out, then that’s all you can do.
Pick: Brandt Snedeker to finish top-20 at the Rocket Mortgage Classic, +460 (wager 0.5 units to win 2.3 units)
Brandt Snedeker has missed 3-of-5 cuts this season and finished last week tied for 41st. So what does that tell me? He is undervalued.
Detroit Golf Club is a 7,300-yard course, so guys who can bomb it off the tee – like favorite Bryson DeChambeau – won’t have a huge advantage. This course has heavy rough and since there will be no fans due to the COVID-19 pandemic, the rough will be robust throughout the weekend. It won’t be trampled by spectators.
Ball striking and accuracy will be of the utmost importance and when he’s right, Snedeker is among the best at both.