Sunday, February 3, 2008

Put your money where your mouth is

I'm not sure how it happened, but the Giants beat the Patriots in the Super Bowl. I overheard some people who had money riding on the game.

I'm not a sports fan, but even if I was, it's a bad thing to bet on. Betting on the stock market is one thing; long term, it goes up, and short term, there are lots of indicators you can look at. In sports, there are too many variables (injuries, weather, "momentum"), too high standard deviations on outcomes, and bets aren't just one one team, they're on two.

If you want to make money, stick to the stock market. Yes, your returns for a day trade might be a modest +/- 10%, but betting on sports is just gambling.