Friday, April 14, 2023

"Five ways investing differs from gambling"/ "Luck, fate and a lot of eights"/ Life is a gamble

Aug. 3, 2019 "Five ways investing differs from gambling": Today I found this article by Peter Hodson in the Edmonton Journal:

I was talking to my 14-year old son the other day, and he confessed to me that he tells his friends that my job is “professional gambler.”
I was aghast, of course, and went on to explain to him that investing is dramatically different from gambling. While skill can be used in some games, gambling is heavily tied to luck.
Sure, investors can get lucky sometimes but skill and homework are far more important.
I went on to explain five ways that Investing is NOT gambling:

The odds are actually in your favour
In a casino, the game with the best odds is typically Blackjack, where the house usually has an edge of one per cent or less. 

Craps has similar good odds, depending on the casino. 
But an edge is still edge: the casino will do better than you will, on average. 
With stocks, though, you have the edge. Stocks rise more than they fall, and over time even an average buy-and-hold investor should make money. 
There is a risk premium to equities, and this is your edge: Because stocks can be very volatile, you get paid to own them, through higher investment returns.

Research will overpower luck
Yes, there are some gambling games that require some skill. Bluffing in poker can make you a lot of money, if you are good at it.
 However, most games come down to luck. Even a great poker player is not likely to win without some nice cards now and again. 
Many games, such as roulette, are all luck. You can study prior numbers all you want, but the odds of hitting ‘your’ numbers are still not going to change. 
Not so with investing: Proper research and due diligence makes it far more likely you will have successful investments. Sure, investors can get lucky as well, but research will give you that extra edge, and provide even more investment gains. Stock selection is not — and never should be — just flipping a coin and buying a random stock.

The longer you invest, the better you will do
Vegas doesn’t get all of its glitzy, fancy hotels by giving away more money than it takes in. With the odds favouring the casino, if you gamble long enough you are going to lose money. 
You might have some short-term winning streaks, but eventually the longer you play the more likely it is that you will end up short of cash. It is, simply, mathematics. 
But with the stock market, time is your absolute best friend. The longer you invest, the more likely you are to win. With markets at record highs, every single market index buyer who hasn’t sold has now made money. One can certainly never say every single tourist in Vegas has made money!

Stocks are not a zero-sum game
Generally, in most forms of gambling, if you ‘win’, someone else ‘loses’, whether it is another player, or the house. Only one player gets the pot in poker (well, sometimes it is a tie), and everyone else loses all their bets in that round. The house also might take a cut. 
But with stocks, true shareholder value can be created. Certainly, investors can ‘lose’ when they sell a stock at a loss. But if a growing company sees its shares rise from $10 to $100, then true wealth has been created on a net basis. 
Despite some winners and losers along the way, the entire company is worth more than it was before. In Vegas, some will go home winners but most will go home empty-handed, which is completely different from a company generating long-term shareholder value through growth and competent reinvestment of profits.

Borrowing can be beneficial
When gamblers get themselves into trouble, it is almost always because they have borrowed money in order to keep on gambling. Because of the above-noted points, borrowing money essentially just puts you into a big hole a lot faster. Again, you could get lucky, but more likely you just get broke. 
Depending on the character of the people you are borrowing money from, you might just find yourself in a lot of trouble. But, borrowing to invest is different. For one, you can deduct investment interest from your taxes (try that with your gambling loans). 
But really, it is the prior points and time frame that matter. Over time, your investment returns are very likely to exceed your loan costs, and you will be wealthier than you would have been without borrowing money, unlike hiding from Louis the Loan Shark which is where you will likely be with your money borrowed to gamble with.
After our discussion, my son conceded that some of my points made some sense (a big win for a dad in a discussion with a teenager). I thought I had won this conversation. But then he said, “Thanks Dad, but professional gambler still sounds way cooler, so I will probably just keep saying that when my friends ask me what your job is.”
Peter Hodson, CFA, is Founder and Head of Research of 5i Research Inc., an independent research network providing conflict-free advice to individual investors (http://www.5iresearch.ca).
e m
3 hours ago
Studies have shown consistently that highly trained career hedge fund managers can't beat the market average. 
So, I think your son is right in the sense that if you allocate your TIME to pick individual stocks, you are gambling with your time - hoping it will lead to a portfolio that outperforms simple passive strategies, ie investing in indexed funds.

  • updated 1 day ago
  • Excellent article, Peter, but I must jump into the ring in defence of your son. At 14, he sounds like a smart young man, and wise beyond his years. He doesn't refer to his dad as a 'gambler' but as a 'professional gambler'. 
It is big difference to those of us who are not professional investors or financial advisors! He implies that there is much risk to investing if you don't do your homework. Think of the couple who sold off all of their assets to buy 1,000 computers to do their own cryptocurrency mining or of the physician who had put all of his investments into Nortel shares in 1998. 
I'm sure by the time he reaches 18, your son will appreciate the intricacies of well-researched investing. 

Links:
Feb. 22, 2017 "Luck, fate and a lot of eights": Today I found this article by Douglas Quan in the National Post in the Edmonton Journal.  It's about Asians and their gambling addictions.

This should be my companion article in my Nov. 2016 blog post:

"Does your job make the world a worse place?"/ Should I get a driver's license? 

Tracy's blog: "Does your job make the world a worse place?"/ Should I get a driver's license? (badcb.blogspot.com)


During recent Lunar New Year celebrations, senior managers at the River Rock Casino Resort in Richmond, B.C., gussied up in colourful Qing Dynasty-era costumes and held a cash giveaway with a prize pool of $88,888.

The Fallsview Casino overlooking Niagara Falls boasts that its resort was designed according to feng shui principles.

The newest resort in Las Vegas, the Lucky Dragon Hotel and Casino, delivers an assortment of Asian-themed eye candy - glass-dragon chandelier and lantern-lit night market - and table games popular with the Asian crowd - pai gow and baccarat.

Across North America, the gambling industry's courting of Asian high-rollers is intensifying. 

But how to explain the love affair so many Asians seem to have with gambling? 

And at what point does the industry's aggressive marketing tactics cross the line from savvy to predatory? 

"When I was growing up in high school, if I told my parents I was going out drinking with my friends, they would absolutely yell at me, and say, 'No, that's wrong,'" says Timothy Fong, a UCLA psychiatry professor and co-director of the school's gambling studies program.

"If I said to them, 'I'm going over to my friend's house to play poker tonight, they'll say, 'Go for it, have a good time.'" 

Gambling is deeply rooted in many Asian cultures, stretching back to 3000 BC, and is celebrated and promoted during cultural holidays, says Fong, who has done extensive research on Asian gamblers and addressed the B.C. Lottery Corporation's annual New Horizons responsible gambling conference in Vancouver on Tuesday.

"The experience for a lot of Asians gambling is they're just drawn to it. ... They'll say things like, 'Well, it's in our blood; it's just who we are.'" 

There is also an intense belief among many Asians that while their fates are predetermined, there will be periods in their lives when they get lucky or when good fortune will be bestowed upon them.

At a casino, they'll try to find ways to influence that luck. That's where superstitions - or "false rituals" - come into play.

Take baccarat, for instance, a card game that is all chance, Fong says in an interview. Many Asian players will look for patterns in the game, believing they can ride a path to victory.

Others might think they can influence the outcome merely by where they sit or how they handle their cards.

"I was in Stockholm, Sweden. There are no Asians there," Fong says. "(Yet) 20 per cent of the casino crowd was Asian. I saw the same behavioural trends: groups of guys and women huddling around a blackjack or baccarat table, tracking the patterns, touching the cards in a ritualistic manner."

Some researchers theorize there might also be something about the immigrant experience that drives Asians to gamble - perhaps related to feelings of isolation or loss of social status.

But Fong says more research is needed.

"I would certainly agree that stress related to acculturation can drive up the need to escape and subsequently to gamble, but no work has been shown to specifically say that the Asian immigrant experience is much more difficult ... than any other."

Whatever the causes, the gambling industry has taken notice. It is routine for major casinos to offer daily shuttle transportation from Asian population centres, hire staff who speak Asian languages and to serve up Asian cuisine and entertainment.

No Canadian casino contacted by the National Post would discuss its Asian marketing strategies. But across the border, Melissa Free, vice-president of marketing at Seneca Gaming Corporation, which operates three casinos in upstate New York, acknowledged that Asians are "an important market ... in every gaming area in the United States."

Asian-Americans contributed as much as 25 per cent of casino revenues, The New York Times reported in 2011. No Canadian figures were available.

At the Seneca Niagara Casino, Lisa Chan, vice-president of Asian marketing, trains staff in cultural do's and don'ts.

For instance, do not tap a player on the shoulder. "Asians believe it's bad luck because there's a light to their fire, and you've just put it out," Chan says.

Staff also participate in dinner parties with loyal customers in the hopes of cultivating new relationships with "high-end players."

When it comes to casino design, no detail is too small. At the Lucky Dragon in Las Vegas, the main bar is eight-sided for good fortune. 

"And it's hard to find a No. 4 on the property," the Los Angeles Times reported. "The unlucky digit is absent from room numbers and the phone directory. The nine story hotel even skips a fourth floor."

Amid all these marketing enticements, some studies suggest Asians living in western countries could be paying a price in the form of higher rates of addiction.

Studies from the 1990s showed problem gambling rates among Chinese were about eight per cent in Calgary and five per cent in Montreal. Meanwhile, a 2002 study in Connecticut of almost 100 Cambodian, Laotian and Vietnamese refugees identified almost 60 per cent as being "pathological" gamblers.

And an analysis of a 2006 California state study found Asian-Americans whose primary language was not English were nearly three times more likely to be problem or pathological gamblers compared to the general population.

"Every time we go inside an Asian-American community ... we come back with results where the rate of gambling disorder is much higher than you would expect just by random chance," Fong says.

All of which raises the question: is it ethical for the industry to be wooing Asians so aggressively? 

Fong isn't convinced the industry is being predatory. Those buses shuttling Asians to casinos?

 One interpretation is that they are preying on vulnerable citizens, he says. 

"The other is to say, 'Those people want to ride the bus.'" 

Travis Sztainert, a gambling researcher in Ontario, says the industry has every right to turn a profit and gambling provides seniors with the benefits of socialization and a sense of belonging.

"Having said that, I think there may be opportunities ... in terms of corporate social responsibility, to limit advertising/marketing to vulnerable populations," he said via email.

The industry says it's doing exactly that, spending $120 million each year in Canada on education, prevention and treatment, and delivering responsible-gaming messages.

"No one's having to twist anybody's arm," says Paul Burns, vice-president of the Canadian Gaming Association. "It's part of the DNA of our industry."

Still, there's an average of 300 clients who show up at Chinese Family Services of Ontario each year seeking help for gambling disorders, says Mary Fong, a registered psychotherapist and gambling counsellor.

They are typically 45 to 65, first-or second-generation immigrants from Hong Kong, mainland China and Taiwan. Many "worked like dogs" to build better lives for their children and are now empty-nesters.

Phyllis Chan, a clinical counsellor and prevention specialist contracted by the B.C. 
Responsible and Problem Gambling Program, says members of the Asian community are often reluctant to seek help in order to save face.

 She and her partners have been handing out pencils at Chinese restaurants etched with the number of a gambling helpline.

Meanwhile, the industry's courting continues.

One of the latest job postings at the River Rock casino is for a "Marketing Manager - Asian Market."

http://www.leaderpost.com/news/luck+fate+eights/12964988/story.html



My opinion: 

Help: If you need help, you can call for help anonymously at those helplines.  Or you can go to support groups and see a counselor for subsidized. 

Cornerstone Counselling: They have psychology Masters students who will give 1 hour sessions for $20.  A certified psychologist will read over their files.


My parents: I'm Asian, and my family isn't really interested in gambling.  My dad plays mah- jong and plays with real money.  He's not a gambling addict.

My little brother is interested in gambling, but mainly reading, and watching movies and documentaries about it.

My parents are against gambling.  This was probably in 2017, but I went to the River Cree Casino with my co-workers for the Surf and Turf buffet.  It was great.  My parents asked why I was there, if I was to gamble.  I told them it was for the buffet.

Life is a gamble: You do have to take risks, but you can avoid or mitigate some of them.

Applying for college: I remember a long time ago when my friend Cham told me about how you have to pay for the application fee to apply for college.  What if you don't get in and then you wasted the money to apply?

Tracy: Yeah, but you have to pay to apply.  The admissions are putting the time and effort to read all these applications and choose who gets accepted into this college program and who doesn't.

Going to job interviews: I have to take the bus for 45 minutes to a job interview.  The interview is 15 minutes long.  I then go home.  I don't get hired.  That's like 2-3 hours of my time and effort.  I am reading the newspaper on the bus so it's productive.

I have to attend the interview to get hired.  There's kind of a risk too.



This week's theme is about investing:


"The three steps to invest for multiple goals"/ "Five investing principles that should always apply no matter the season"

Tracy's blog: "The three steps to invest for multiple goals"/ "Five investing principles that should always apply no matter the season" (badcb.blogspot.com)


"Five so-called rules for younger investors that need a reality check"/ "What advisors are doing (or not doing) with their own portfolios in this bear market"

Tracy's blog: "Five so-called rules for younger investors that need a reality check"/ "What advisors are doing (or not doing) with their own portfolios in this bear market" (badcb.blogspot.com)


My week:

Apr. 6, 2023 "A marketing professor said he would cancel his course's finals if anyone could get a million views on TikTok. He kept his promise": Today I found this article by Aditi Bharade on Yahoo:

  • A professor promised to cancel a final exam if his class made a TikTok video that got a million views.

  • His student Sylvie Bastardo recorded the professor's slides and begged for likes on Tiktok.

  • Her Tiktok has been seen 4.9 million times, and the professor has canceled the exam as promised.

A marketing professor promised his students that if anyone made a TikTok video with a million views, he would cancel the final exams.

Matthew Prince, a public relations executive at Taco Bell who teaches at Chapman University in Southern California, put forth this challenge to his influencer marketing class in January, per The New York Times.

However, if he managed a million views on a Tiktok of himself filmed in class or about the class, the whole class would have to do an extra assignment, he told Insider.

Sylvie Bastardo, a 20-year-old sophomore in Prince's class, took up the challenge.

Rather than post original content, she whipped out her phone, and took a video of Prince standing in front of the presentation slides showing the details of the challenge.

Prince's presentation slides read: "Tiktok Influencer Challenge," "First to reach viral status on TikTok wins (Me vs. the entire class)."

Underneath, in bullet points, he wrote: "If you win, the Final is canceled."

Bastardo's caption on the TikTok posted on February 2, said: "My professor said if our class got a tiktok to 1 million likes he would cancel the final!! Please like!!!"

She later told The Times in an interview that she had misheard her professor, who only wanted a million views, not a million likes.

The open call for likes quickly clocked loads of views for Bastardo as the Tiktok community rallied to help her get the final exams canceled.

At press time, Bastardo's TikTok had more than 4.9 million views and nearly 860,000 likes.

Insider saw many comments on Bastardo's TikTok from people who said they were "rooting for" her and her classmates.

Just a day after she posted the video, it had reached a million views. Prince's co-workers saw the TikTok video before he did, and he was shocked when they told him about it.

Prince told Insider that he preferred this method of learning over setting examinations.

"I believe finals are just a reflection of your ability to regurgitate information. Students aren't going to remember any of the questions from a test after they graduate – but I'm hopeful a fun learning opportunity like this could be a memory they take into their careers," he said.

A marketing professor said he would cancel his course's finals if anyone could get a million views on TikTok. He kept his promise. (yahoo.com)



Apr. 9, 2023 "Drive-thru or order inside: What's the quickest way to get your fast food?": Today I found this article by Danielle Nerman on CBC.  The drive- thru is faster:


"We're taught that drive-thru is top priority because the people inside have a little more patience than out in the car."


Then, there's the matter of optics.

If the drive-thru gets behind, the lineup will snake onto the street blocking traffic and vehicles will just sit there, idling. 

Carter says fast food chains don't want to be seen as polluters, which is another reason why they put more resources into moving those cars along.

"These restaurant chains are very cognizant of the environmental impact."

Drive-thru or order inside: What's the quickest way to get your fast food? | CBC Radio

My opinion: I don't drive, so I always go to the counter.  If I'm with someone in a car, then we go to a drive- thru.  Do you want to drive to a fast food place, and get out of car, and walk to the counter, and then get your food, walk back to your car, and start it up again?

Apr. 11, 2023 "Tupperware shares tank as company warns it may go out of business":

Today I found this article by Pete Evans on CBC:


Shares in Tupperware had been on a downslope for years, as the 77-year-old company's main business model of selling direct-to-consumers via consumer salespeople fell out of favour. 

But that trend reversed in the early days of the pandemic, as the sudden popularity of eating meals at home led to new demand for its core product: sealable, reusable food storage containers.

Tupperware books most of its revenue from sales from independent representatives who sell the products door-to-door. At last count, there were more than three million such salespeople — whom the company calls Tupperware Business Leaders — in more than 70 countries around the world.

https://www.cbc.ca/news/business/tupperware-bankruptcy-1.6806751


 Apr. 13, 2023 "Prime Minister Justin Trudeau praised for interaction with 'confused' PPC supporter": Today I found this article by Elianna Lev on Yahoo.  I'm neutral with Trudeau, but he sounds smart here where he is asking good questions:

“OK, do you think women should have the right to choose what happens to their own bodies?” Trudeau asks the man filming him.

“Personally no,” he responds.

Trudeau asks if he thinks that he has a right to choose what happens to women’s bodies.

“Well, I think if they’re sleeping around they shouldn’t be allowed to abort the baby, personally,” he says, calling himself pro-choice before correcting himself and asserting that he’s pro-life.

When pressed further by the prime minister as to why he thinks women shouldn’t have rights over their own body, the young man says that it’s “their fault they chose to sleep around.”

When Trudeau asks about women who are raped, the man stops recording on his iPhone and tells him that’s where it gets complicated, protesting that it’s a “super specific example.”

“It’s an all too common example,” Trudeau responds. “Women get raped all the time and it’s something we have to take seriously.”

When Trudeau asks the young man again if a woman who gets raped should have access to abortion, he says he’s split on it.

After some further back and forth on the topic of abortion, the video ends with Trudeau telling his confronter: “Well, it sounds like you need to do a little more thinking and a little more praying on that as well.”

On social media, many praised Trudeau for taking a patient approach with the man, who didn’t appear to have carefully thought through his points.


Prime Minister Justin Trudeau praised for interaction with 'confused' PPC supporter (yahoo.com)


Suburu commercial:



My friend Leah Beaudry is in this commercial.




Subaru Canada


 

 
They say the True Urban Legend fits down tight streets and fits all your weekend gear. Where will you take the All-New #2024Crosstrek? 👇
All reactions:
Leah Beaudry


Harvest Meat: 


Wieners
1.5 kg

This is made of pork and beef.  It's gluten free.  My family and I really like this.  I like this so much I'm writing about this on my blog.


https://www.harvestmeats.ca/products/wieners/wieners-1500g/


https://www.harvestmeats.ca/products/wieners/



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