Investing > Gambling??

tvta · #1 08-02-2007, 03:50 PM

Ok so I know much about gambling but little about investing. My pops hates gambling but is an investaholic, and claims investing > gambling. For those of you out there who know both pretty well, which one is more +EV? I just graduated college and now have a full time job that pays very decent for entry level. Should I invest mass amounts or add to my bankroll mass amounts(given I am a solid winning player)

XXXNoahXXX · #2 08-02-2007, 04:03 PM

well if you add mass amounts to your bankroll it would mean moving up in levels? are you a solid winning player at those levels?

tvta · #3 08-02-2007, 04:38 PM

yes it would, exactly my reason for posting. i am very positive i would be a winning player at slightly higher limits but everyone tells me to invest early because this money will compound heavier the earlier it is invested. but i really want to move up in stakes. currently playing 1/2 plo8 and .5/1 plo. short term goal is to gain a bankroll for 2/4plo and 2/4 - 3/6 plo8. i wouldnt feel safe without 4k for 2/4 plo8 (might seem small but i played 2/4 plo8 on bodog with 4k and it was fine for months) and probably 6k for 2/4 plo if not more. i see endless profitability at these stakes and i see nothing but dollar signs if i can gain a bankroll good enough for these limits.

tvta · #4 08-02-2007, 04:40 PM

thanks tom - good info.

so are you saying if one is already a good gamblar why bother with trading in terms of profitablilty?

investing i see the long term difference is not comparable to gamballing.

jively · #5 08-02-2007, 04:37 PM

You have to distinguish between investing and trading/speculating. One might define investing as buying and holding investments for some time period (1+ years), whereas trading is buying and holding investments for some short period (seconds -> few months?).

With investing, you generally earn the capital market return ~11% +/- some standard deviation. You are not going to get rich quick; and unless you are retired you are not going to generate income to live on. "Investing" in this way can require very little effort.

With trading/speculating, some may earn a higher return. Some maybe a lot larger. Generally it will require more time, and for many it is a full-time job. You may be able to generate income from it to live.

With these definitions, gambling is more equivalent to trading, and not like investing.

-Tom

meditate89 · #6 08-02-2007, 04:59 PM

I really don't see any difference between investing and gambling: is poker gambling or investing? Let's not argue semantics here. You're betting on the outcome(s) of certain situations/circumstances/events... Your time frame could be 2 hours or 20 years.
Gambling often describes someone making an uninformed decision... whereas investing tends to be associated with a more in depth analysis... but these associations are a bad thing... they're assumptions... made by people who aren't very well informed. You know, the ones who think poker is all luck. After all, we are all "+EV Gamblers" for the most part (when we play poker in a sober manner and are not on the tilt- (hence a sober manner) ); whereas there are many "-EV Investors," whom I'll loosely define here as those who spend much time and effort only to trail the SP500 index fund in the long run.

I'm sure you'd find a HUGE correlation between performance of:
+EV "gamblers and +EV "investors"

vs.
-EV "gamblers and -EV "investors"

since they're one in the same, after all

meditate89 · #7 08-02-2007, 05:10 PM

One thing to keep in mind about the stock market- the 'long run' in poker might be 10k hands played. The 'long run' in the stock market might be 20+ years.
I would only recommend investing money in the market if you don't plan to need it for at least 5+ years for anything

Definitely keep as much money as you need in poker to continue to move up at a blistering pace... your winrate will go up so so much moving from 2/4 --> 3/6 --> 4/8 etc...

First 4k you have to invest should be in a ROTH IRA- you have to do that in the next 8 months or you miss 07 contribution... would recommend vanguard if you're going to be indexing. Also max out your 401k / at least the match obv

How many of the books have you read in the FAQ?

tvta · #8 08-02-2007, 05:47 PM

[ QUOTE ]
How many of the books have you read in the FAQ?

[/ QUOTE ]

0. Ive only had a full time job for 7 weeks now, im not yet ready to actively participate in studying investing. Poker books - about 20 with 2 more comming in the mail.

ahnuld · #9 08-02-2007, 05:47 PM

If you are a good poker player, you should move up pretty quickly solely from playing poker. Investing is great because the amount you make in cards is way more than you need for a healthy bankroll, so I take the extra out and invest it at years end. Poker is very small, investing is huge in terms of the amount you can put in before returns start to diminish.

BradleyT · #10 08-02-2007, 06:06 PM

I think for the OP Gambling > Investing. He only has 4K. He could move up a level in PLo/8 and probably turn his 4K into 30K with a lot of study (that's only $66 per day). That same amount of study and effort most likely wouldn't return 700% if he was investing.

Obviously there's a dollar point where investing becomes the better option.