Tuesday, 23 March 2010

Sound Investment

This arrived in my inbox today, and I thought I would post it since it is another view on 'investment versus gambling' that provoked some debate last week, and mentions my old friend Warren Buffett. It's written by Rich Allen, aka the Sports Betting Professor:

And yes, you read that headline right: betting on sports is a sound investment. I actually prefer to use the term ‘investing’ as opposed to gambling. When I hear the word gambling I have an image of somebody filling out a parlay card and donating $20 or $50 to their local bookie because they haven’t got a clue what they’re doing.

If you invest in something, you do so after you’ve done research and due diligence. The best stock picker in the world, Warren Buffett, won’t invest in a company unless he knows exactly what they do and how they make their money. You should never invest in something that you don’t understand.

Another key to sound investment strategy is to stay diversified. That means you shouldn’t have all your money piled into one asset class. Be it real estate, the stock market, your piggy bank, etc. it doesn’t matter: all your money should never be in one place.

And I feel that ‘investing’ in football and basketball games can be a legitimate way to diversify the money you have to invest. Let’s face it, most of us can’t analyze the financial statement of a business and make a lot of sense out of it. BUT, most of us can look at a point spread and understand its meaning.
More on the SBP later when I have time (life is busy right now) but bottom line is that my enrolment fee has been refunded due to 'suspicious activity' on my PayPal account. I wonder how long before they notice.

1 comment:

Thomas Adair said...

Traders are taught that the Holy Grail to Investing doesn't exist. Real people were taught that all the planet's move about the earth, don't go to far out into the ocean(you'll fall off the earth), on and on..........

When one looks outside the box(inventor), goes against the group(thinks for self), said they found(developed) something that is supposed to be impossible(airplanes), they were once killed. Now these people are called bad names and delegated to be unheard, and ignored group.

The ultimate business solution. The ability to cut the cost of any business expense, or just plain invest.

I developed multiple arbitrages that enable me to trade(not invest) in the financial markets, without risk(The Holy Grail to Investing), or arbitrage that anyone can do. Over 30% a year.

Thomas Adair