The financial meltdown continues today. As I've written before, it's somehow much easier for me to deal with a £5,000 loss in the stock market than it is to deal with a £1,000 loss on a sporting investment. Probably several reasons, foremost among them being that losses in stocks are usually 'paper' losses which have a good chance of recovering at some point in the future, whereas an investment on Accrington Stanley to beat Aldershot Town is money lost for ever if the result goes the wrong way.
The stockmarket has proven to be a long-term winner over many years, just so long as you don't try to beat the market by trying to find the peaks and the troughs. An approach of investing a set amount every month in an index fund will return approximately 8% a year in the long-term. It's important not to react to short-term moves, either by panicking or by getting greedy, since reacting in this way will only reduce profits or increase losses.
And it's the same way with trading sports. As with the stock market, the two driving forces are fear and greed. Anyone who has spent a lot of time on Betfair or BETDAQ will have noticed that the best opportunities are available when people are acting based on one of these emotions.
As Warren Buffett says "Be greedy when others are fearful. Be fearful when others are greedy". And he's worth a few bob, so he should know what he is talking about.
Monday 6 October 2008
Feer And Greed
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The BETDAQ Forum has arrived at least we can now post without being censored every 2 minutes!
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