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Listen "Investing or Gambling? Where Do You Draw the Line?"
Episode Synopsis
Are you investing or are you gambling? In episode 17 of Greenstream, we unpack evidence from casinos, sportsbooks, and academic finance to show how the odds work against gamblers but for investors. You’ll learn about:
Why time is an investor’s ally but gambler’s enemy
How the “favorite–longshot bias” from horse racing shows up in lottery stocks and IPOs
Four practical ways to help stack the odds in your favor and invest like the House
Subscribe now so you don’t miss what’s coming next: an inside look at the importance of Boards of Directors for organizations of all sizes and how to find opportunities to join one.
Sources:
1 Thaler, Richard H., and William T. Ziemba. 1988. "Anomalies: Parimutuel Betting Markets: Racetracks and Lotteries." Journal of Economic Perspectives: https://www.aeaweb.org/articles?id=10.1257/jep.2.2.161
2 Sauer, Raymond. (1998). The Economics of Wagering Markets. Journal of Economic Literature. 36. 2021-2064. https://www.researchgate.net/publication/4732178_The_Economics_of_Wagering_Markets
3 https://www.bbc.com/future/article/20160721-the-buzz-that-keeps-people-gambling
4 https://responsiblegambling.org/for-the-public/about-gambling/the-science-behind-gambling/
5 Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: https://ssrn.com/abstract=3423101
6 Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance, The Cross-Section of Speculator Skill: Evidence from Day Trading (December 31, 2012). Available at SSRN: https://ssrn.com/abstract=529063
7 Ritter, Jay R., The Long-Run Performance of Initial Public Offerings (1991). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1505889
8 https://site.warrington.ufl.edu/ritter/ipo-data/
9 Asness, Cliff S. and Frazzini, Andrea and Israel, Ronen and Moskowitz, Tobias J. and Moskowitz, Tobias J. and Pedersen, Lasse Heje, Size Matters, If You Control Your Junk (January 22, 2015). Fama-Miller Working Paper: https://ssrn.com/abstract=2553889
10 Rizova, Savina and Saito, Namiko, Investment and Expected Stock Returns (July 8, 2020). Available at SSRN: https://ssrn.com/abstract=3646575
11 American Dream: Is Your House Your Greatest Investment? | Greenstream #8 https://www.youtube.com/watch?v=z-_Eg-hHaPA&t=2s
12 Real Estate: Expected Returns and Expected Headaches | Greenstream #9 https://youtu.be/Hhscc3TLEEY?si=VrRQwYSzFTAGMVTa
13 Bessembinder, Hendrik (Hank), Do Stocks Outperform Treasury Bills? (May 28, 2018). https://ssrn.com/abstract=2900447
Greenspring Advisors is a registered investment adviser with the SEC and does not provide tax, legal or accounting advice. Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.
Why time is an investor’s ally but gambler’s enemy
How the “favorite–longshot bias” from horse racing shows up in lottery stocks and IPOs
Four practical ways to help stack the odds in your favor and invest like the House
Subscribe now so you don’t miss what’s coming next: an inside look at the importance of Boards of Directors for organizations of all sizes and how to find opportunities to join one.
Sources:
1 Thaler, Richard H., and William T. Ziemba. 1988. "Anomalies: Parimutuel Betting Markets: Racetracks and Lotteries." Journal of Economic Perspectives: https://www.aeaweb.org/articles?id=10.1257/jep.2.2.161
2 Sauer, Raymond. (1998). The Economics of Wagering Markets. Journal of Economic Literature. 36. 2021-2064. https://www.researchgate.net/publication/4732178_The_Economics_of_Wagering_Markets
3 https://www.bbc.com/future/article/20160721-the-buzz-that-keeps-people-gambling
4 https://responsiblegambling.org/for-the-public/about-gambling/the-science-behind-gambling/
5 Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: https://ssrn.com/abstract=3423101
6 Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance, The Cross-Section of Speculator Skill: Evidence from Day Trading (December 31, 2012). Available at SSRN: https://ssrn.com/abstract=529063
7 Ritter, Jay R., The Long-Run Performance of Initial Public Offerings (1991). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1505889
8 https://site.warrington.ufl.edu/ritter/ipo-data/
9 Asness, Cliff S. and Frazzini, Andrea and Israel, Ronen and Moskowitz, Tobias J. and Moskowitz, Tobias J. and Pedersen, Lasse Heje, Size Matters, If You Control Your Junk (January 22, 2015). Fama-Miller Working Paper: https://ssrn.com/abstract=2553889
10 Rizova, Savina and Saito, Namiko, Investment and Expected Stock Returns (July 8, 2020). Available at SSRN: https://ssrn.com/abstract=3646575
11 American Dream: Is Your House Your Greatest Investment? | Greenstream #8 https://www.youtube.com/watch?v=z-_Eg-hHaPA&t=2s
12 Real Estate: Expected Returns and Expected Headaches | Greenstream #9 https://youtu.be/Hhscc3TLEEY?si=VrRQwYSzFTAGMVTa
13 Bessembinder, Hendrik (Hank), Do Stocks Outperform Treasury Bills? (May 28, 2018). https://ssrn.com/abstract=2900447
Greenspring Advisors is a registered investment adviser with the SEC and does not provide tax, legal or accounting advice. Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.
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