I am alarmed at how absurdly vulnerable some of my friends, even smart ones, are to confusing investment with “taking a flyer”.
“The activities that everyone agrees are capital-G Gambling — like blackjack and slots and horse racing and lotteries and poker and sports betting — are really just the tip of the iceberg…are fundamentally not that different from trading stock options or crypto tokens, or investing in new tech startups.”
I often thank my ancestors for my Puritanical prejudice against gambling, and have puzzled on how hard it is for my friends to see the need to find (even if murky) the distinction between investment and gambling.
If that made you laugh you should look up the colonial Puritanical custom of “Bundling”.
At least one of my ancestors (born in Concord, Massachusetts in 1759) was bundled by his highly amused parents when he was 17 (he found it absurd, frustrating, and pleasurable) and wrote about it in his private journal. He later married a different girl, and the two of them took off for the Illinois shore of the Mississippi River immediatley after the American Revolution.
The Puritans are far more interesting than most people realize.
There is at least one fundamental difference between, say, casino gambling and investing in new startups (tech or otherwise) and trading stock options – the asymmetry of returns.
With startups or some types of option strategies, one can lose “only” 100% of what one puts in. The upside on the other hand can be many times the initial investment.
Edward O Thorp is widely known as the author of the 1962 Beat the Dealer, which was the first book to prove mathematically that blackjack could be beaten by card counting, and the 1967 Beat the Market, which showed how warrant option markets could be priced and beaten.
The story I’ve heard is that after devising his strategy to beat the casinos at Blackjack, and getting thrown out, he discovered he could apply it to Wall Street and nobody cared. Heck, they welcomed him.
It’s all about risk and reward. Most people have no clue about risk and only think about reward. That is why we have so many ways to invest. When someone states, that the way they invest in the only way, well I have to laugh and move on. You can not have a discussion with an idealogue or a zealot.
Just the opposite. It allowed a young man and woman to spend time together in a chaste manner. The fellow came courting, and it may have taken him half a day to get there, transportation being what it was. If he stayed for dinner (since he probably didn’t set out until after church) it was then too late for him to go home. Bundling was a very good solution for the times.
If you think there wasn’t some serious snuggling and petting going on, I have a social media firm with no users to sell you.
Recall that in the olden days there was no central heating. Also no electric light bulbs. When the sun went down, which was early in winter, earlier than when the workday ended, there was nothing to do but sit around the Franklin stove (or antecedent) … or go lie in bed wrapped up in a blanket.
But I remember being 17, and I remember hormones, and I remember many good times. Human nature hasn’t changed. I’m gonna guess there was a lot of schtupping and fondling along with the bundling.
Thank you for your thoughtful insights! It’s indeed concerning to see how easily some people blur the lines between investment and gambling, even those who are otherwise savvy. The comparison you highlighted—that activities widely recognized as gambling share similarities with stock options, crypto trading, or startup investments—really drives home the point that risk is inherent in many financial decisions.
Made a trip to an area casino yesterday (09/29). The old location was just slot machines and a bingo hall. The new location is about a quarter mile away, and includes a casino on the second floor, hotel rooms on multiple levels above the casino, and several eating options. The bingo hall remained at the old location.
Most casino visits I bounce around and try my luck on multiple machines - usually 5 - 7 different slot machines. Yesterday, I spent most of my time on one game - San Bao Pandas.
Going in, I know “The House mostly has the edge”. But, once in a while, the slot player has a chance. I won on the slot machine during a prior visit. Which meant I probably should have skipped the machine this visit.
But, what if THIS is my lucky machine? So, I opted to play the game involving cute pandas again. And no, it was not MY lucky machine. This visit I gave some of my gains back. But, I had a fun time playing the slot game. YMMV
My coworkers were constantly whining about having no money, no savings. From time to time, I would be working, and hear a scratch-scratch-scratch noise. I would turn around, and see the “broke” coworkers scratching lottery tickets. No matter how much they scratched, they were back in the office the next day.
I have commented before, on the undue focus/hype on college athletics. On-line casino and sports book gambling is now legal in Michigan, so the Proles are bombarded with advertising for gambling. Just more ways to separate the Proles from what little money they have.
I was fortunate enough to attend Comdex in Las Vegas three years in a row in the early 90s. This was at its epic height, as the largest convention in the world by far. It was a HUGE spectacle. And I was told by multiple local workers (bar staff, taxi drivers, etc.) that the casinos hate us. We are mostly electrical and software engineers who are very good at math and understand very well how the casinos are mathematically rigged against the gambler.
