Blackjack vs. Stocks

assume_R

Well-Known Member
#1
So I've been looking into other ways to invest my money besides just blackjack, and I've been looking at learning about stocks as an options.

So let's say I have $20k to invest (not my personal bankroll amount, but just using it as an example). A savvy stock market trader would hope to make between 10% and 20%, right? So somewhere between $2k - $4k per year, which comes $38 - $77 per week. I think with $20k counting cards I can make more than that.

I suppose, though, with more substantial amounts of money stocks are a good way to go... maybe. I am interested to hear others' thoughts on this matter and personal experience with alternative forms of "investments" besides blackjack.
 
#2
There are many ways to accumulate wealth: own your own business; work for a company and get lucky at the initial pubic offering by vesting your stock options; have high a paying job like a CEO; buy real estate (i.e., own your own home); if you can’t own your own business, own a fraction of someone’s business (i.e., invest in the stock of the business).

I own a home in CA (about 70K to pay off) and have been investing in and actively trading stocks and options since 1998.

The return on your investments depends on your tolerance for risk and holding period. Assuming you manage your own investment/trading accounts, questions to consider are: 1) if it’s a long- or short-term investment/trade; 2) do I know what I am doing; 3) am I disciplined when it comes to gains/losses.

In my experience, investing/trading vis-à-vis blackjack, investing/trading has more upside potential but requires higher initial outlay (upfront investment). (Initial investments can be lower if you know what you’re doing when it comes to trading options.) Assuming you know what you’re doing, you can accumulate more wealth investing/trading than you can win from playing blackjack.
 

moo321

Well-Known Member
#3
Stocks are the best passive investment: they don't require you to actually do anything, unlike a business or real estate, etc.

I recommend that most new investors get what is called an index fund, such as an S&P fund. These funds have very low costs (usually about .1% or so) and outperform almost every other fund over the long haul.

Basically, rather than buying and selling stocks all the time, the mutual fund manager just buys and holds the stocks of the 500 largest companies on the exchange. So you are diversified (you have lots of stocks) and you don't rack up a bunch of fees buying and selling stocks. These funds average about 12% return historically.

There are ways to get better returns. One way is value investing, which I do, which relies on buying companies that are "cheap" relative to the rest of the market. Perhaps their price compared to their innate book value is very low. This strategy tends to outperform the market; over 4 years I have beaten the index by right around 10%. Personally, I look most at price/sales, then price/book, price/earnings and dividend yield.

Others do technical investments. Personally, I don't understand what they do, but craazyman and systems trader are both outperforming the market in the long term, so I recommend talking to them.

http://en.wikipedia.org/wiki/Value_investing
 

assume_R

Well-Known Member
#4
moo, I see you've invested some of your money in stocks and some in AP. Given your experience with both, do you have an opinion as to their relative returns? I suppose what you're saying is good stock investing will always grow while AP requires actively going, counting, and putting up the money yourself, so they both have merit? And also I suppose it also depends on how many hours a year I put into counting.

I'll look to purchase a good index fund and then look into value investing and other forms of ways people try to beat the market average. For some reason it seems technical analysis is somewhat akin to ploppies' "seeing patterns" which may or may not actually exist... so I hesitate to do that. But again I still have a lot to learn so that may not be a good analogy.
 

moo321

Well-Known Member
#5
assume_R said:
moo, I see you've invested some of your money in stocks and some in AP. Given your experience with both, do you have an opinion as to their relative returns? I suppose what you're saying is good stock investing will always grow while AP requires actively going, counting, and putting up the money yourself, so they both have merit? And also I suppose it also depends on how many hours a year I put into counting.

I'll look to purchase a good index fund and then look into value investing and other forms of ways people try to beat the market average. For some reason it seems technical analysis is somewhat akin to ploppies' "seeing patterns" which may or may not actually exist... so I hesitate to do that. But again I still have a lot to learn so that may not be a good analogy.
A lot of technical investing IS voodoo bullshit, unfortunately...

Honestly, I think for most people who don't read financial statements, index funds are better. Value investing has more volatility, because you're often buying into hated stocks, and you own a dozen or less, instead of hundreds.

Vanguard has a lot of good index funds.
 
#6
What moo says x2.

I have wasted so much time on trying different trading strategies that in the end turned out to leave me breakeven and with huge volatility in between. Almost all books on investing are voodoo. I have backtested their strategies only to get the same message: buy and hold would have been better.

I don't have the stats but I believe that most people lose money in the markets. It goes to the pros, exchanges, brokers, talking heads on TV, and even the janitors who pick up the slips of paper people used to throw around in the pits.

The closest thing to a free lunch is holding a broadly diversified portfolio. You're banking on the positive drift of equities and using diversification to cancel out variance in individual stocks. ETFs and index funds are good ways to achieve diversification without a lot of trading. Pick ones that have a low expense ratio and other fees, and the level of volatility that's right for you. Stay away from leveraged ETFs as long-term trades.

Funny thing about books on investing. Some of them warn the reader that without the discipline to stick to their methods exactly you might as well be throwing money away at a casino.
 
#7
assume_R said:
So let's say I have $20k to invest (not my personal bankroll amount, but just using it as an example). A savvy stock market trader would hope to make between 10% and 20%, right? So somewhere between $2k - $4k per year, which comes $38 - $77 per week. I think with $20k counting cards I can make more than that.
Yes. Counting (correctly with good game assessment) is more profitable than trading stocks, I would agree, when the BR is small and there is a willingness to put in the time.

Of course you know that I have no faith whatsover in the present economic system, so I would not look at stocks/options unless they were somehow tied to this (like small cap mining stocks) >>
Gold Aimed at $6,500/oz, Silver at $600/oz
You Still Have Time to Invest in Precious Metals
 

zoomie

Well-Known Member
#8
Counting is not investing

IMHO, counting is not comparable to investing. Counting requires devotion of an enormous amount of time, both in preparation and at the tables, and investing requires very little (esp if you follow the good advice here and invest in index funds ;)). The question is not whether you can do better at counting than at passive investing. The question is, given your ability, BR and conditions, and accounting for your expenses, can you do better on average per hour counting than at some other use for your time - like a day job. For most people the answer is no, and that is certainly the case for me. I wonder about the full timers - what their earnings expectations are, their underlying calculations, their earning alternatives - what makes them tick. Maybe in another thread . . . :)
 

21forme

Well-Known Member
#9
IMO, most "little guys" can't make money in the stock market these days, at least short term. It's a rigged game. Insider trading is rampant, 75% of all trades nowadays are millisecond trades done by super computers in NYC and Hoboken.

10-20% is WAY too optimistic, even in the heyday of the bull market of the 90s. 5%/year is a more realistic number, long term.

If you are going to put money in stocks, I echo previous posters' sentiments and go with ETFs/index funds of the major indices.
 

assume_R

Well-Known Member
#10
Thanks for the advice everybody.

zengrifter said:
Yes. Counting (correctly with good game assessment) is more profitable than trading stocks, I would agree, when the BR is small and there is a willingness to put in the time.
What about when I start to really grow my bankroll? Would the sentiment change to stock market investments being better for a larger bankroll? Say tens of thousands of dollars? At that point I would be playing green-light black and my EV would probably be in the range of $50-$80 / hour (just a very rough estimate).

To answer some comments about blackjack dedication / time, right now, I've put in 85 hours from Jan 1st - today of pure playing time. That's time at the tables betting money. Not including scouting, travel, practicing, etc.
 

Gamblor

Well-Known Member
#13
Agreed that generally there's less labor in the stock market. The only people who I think might have a real chance of getting an edge are those who extensively research the company/commodity who they invest in or against. So of course, this requires a lot of labor.

Is their any analyst or fund who consistently beats the market? I believe most of the knowledgeable ones would say no.

I trust the straightforward mathematics of BJ over the vagaries of economics and human behaviour. Stock market is very much like thin assumptions built upon thin assumptions, over and over again. Have no faith in that. You won't get black swan events in BJ, you probably get them with unnerving frequency in stocks - of course that's the strategy used by some investors ;)
 

shadroch

Well-Known Member
#14
Buy stock in companies that are the established leaders in their field and that pay good dividends and you should get a nice rate of return. The key is to reinvest your dividends, and take advantage of compounding. There are few forces as powerful as the power of compound interest.
 

assume_R

Well-Known Member
#15
Gamblor said:
Is their any analyst or fund who consistently beats the market? I believe most of the knowledgeable ones would say no.
However, that doesn't mean the market itself might not be more profitable as blackjack. Just because one can't beat the market doesn't mean the market isn't a good investment compared to blackjack.

shadroch said:
Buy stock in companies that are the established leaders in their field and that pay good dividends and you should get a nice rate of return.
Okay thanks, shadroch.

shadroch said:
The key is to reinvest your dividends, and take advantage of compounding. There are few forces as powerful as the power of compound interest.
But then again compound interest is like kelly betting, and moving up our betting ramp as out bankroll grows in blackjack. So you could say both blackjack and stocks have compound interest. My bankroll will grow faster as I start betting more when it begins to grow.
 

shadroch

Well-Known Member
#16
I've never worried about beating the market. What you should concern yourself with is beating the rate you could get from another investment. If the market goes up 30%, and My return is only 20%, no big deal. When the market drops 30%, I know I wouldn't have a similar loss, due to stop loss points.
 

Lowrider

Well-Known Member
#17
Stocks stocks stocks

1. VALUE INVESTING FOR THE LONG TERM...

2. Pick up a copy of THE INTELLIGENT INVESTOR by BENJAMIN GRAHAM

3. Read it...again...again...and again.

4. Open an online investing account

5. Practice applying Graham's Value Investing indicator using online stock screeners such as Validea.com, FINVIZ.com, google finance, etc.

6. Identify stocks that meet the criteria .... There are sometimes none up to 3 or 4 each day in all three of the big US exchanges...pick you favorites and invest.

7. Determine an investing amount you are comfortable with and spread your money out evenly like $1000 blocks

8. Never invest in a stock that doesn't pay a dividend.

9. SCREW ETFS, INDEX FUNDS,MUTUAK FUNDS, ETC. Why in the do you want to pay someone to trade YOUR MONEY

10. Pay the $10 to purchase your stock and no other fees....watch your money grow

11. NEVER SELL UNLESS YOU NEED THE MONEY TO LIVE ON
 

shadroch

Well-Known Member
#18
Lowrider said:
1. VALUE INVESTING FOR THE LONG TERM...

2. Pick up a copy of THE INTELLIGENT INVESTOR by BENJAMIN GRAHAM

3. Read it...again...again...and again.

4. Open an online investing account

5. Practice applying Graham's Value Investing indicator using online stock screeners such as Validea.com, FINVIZ.com, google finance, etc.

6. Identify stocks that meet the criteria .... There are sometimes none up to 3 or 4 each day in all three of the big US exchanges...pick you favorites and invest.

7. Determine an investing amount you are comfortable with and spread your money out evenly like $1000 blocks

8. Never invest in a stock that doesn't pay a dividend.

9. SCREW ETFS, INDEX FUNDS,MUTUAK FUNDS, ETC. Why in the do you want to pay someone to trade YOUR MONEY

10. Pay the $10 to purchase your stock and no other fees....watch your money grow

11. NEVER SELL UNLESS YOU NEED THE MONEY TO LIVE ON
Or not.
Everyone has their own style of investing.
There is no reason to wait until you have $1,000 to buy stocks
Nor to pay $10 to buy them.
Most money pros suggest ETFs as an excellant choice foir novice investors. Why take a chance picking the right company in a sector when you can buy an ETF that covers the entire sector.
 

Lowrider

Well-Known Member
#19
Why do you want the shitty stocks in a particular sector?...the overpriced stocks...the under-market capitalized stocks....the non dividend stocks...why not just put 10 bucks in all 5000 stocks on the big exchanges then...why pay an ongoing fee
 

shadroch

Well-Known Member
#20
Lowrider said:
Why do you want the shitty stocks in a particular sector?...the overpriced stocks...the under-market capitalized stocks....the non dividend stocks...why not just put 10 bucks in all 5000 stocks on the big exchanges then...why pay an ongoing fee
Seriously, what expertise do you have that allows you to make better picks than a pro?
As I said, there are many different investing styles. I avoid people who think their way is the one best way.
 
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