What's the Difference between the Stockmarket and the Racetrack?
AbstractThere are many anecdotes likening the stockmarket to betting, often voiced from the perspective of an inexperienced investor or gambler to whom the risks seem much the same in either marketplace. A fundamental aspect of the stockmarket that separates it from all forms of gambling is that a naive investor who carries a well diversified portfolio, and holds it long enough, is bound to win (based on historical evidence at least). In gambling markets, an unsophisticated player is bound to lose, the more so the longer he plays. For well informed or otherwise sophisticated traders, the racetrack and stockmarket are effectively analogous, in that both present opportunities to take money off less well informed players, albeit not so much that they lose interest. The stockmarket does not offer the recreational attractions of the racetrack, and must therefore return profits to most or all investors, at least in the long run, if they are to stay in the game.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by University of Buckingham Press in its journal Journal of Gambling Business and Economics.
Volume (Year): 1 (2007)
Issue (Month): 2 (June)
Contact details of provider:
Web page: http://www.ubpl.co.uk/
Find related papers by JEL classification:
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Recreation; Tourism
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.