Gambling or Investing

Let me state for the record that I don’t gamble. I don’t play the lottery, or go to a casino, or play poker, or contribute to the office pool on this or that sporting event. Oh it isn’t through some misguided belief in the morality or anything like that. No, I don’t gamble because, I don’t win. I just don’t. In the past when I DID partake occasionally I never won. I mean never. NEVER hit a lottery jackpot or poker pot, or anything. I don’t think I’ve won a game of poker even if we were only betting chips. I just don’t win.

What this really meant became obvious in the late 1990s. Everyone’s attention was riveted on the O.J. Simpson trial. On the day the verdict was to be read someone in the office suggested we put some money on it. So I put $5 on convict, because, well, there was no way in hell they could rule any other way. And then he was acquitted. This was when I realized something. Not only do I not win, my betting on something will change the outcome so that I lose. The Universe sees to it that I do not win.

It’s a terrible power to have.

Since then I’ve been very careful about betting. I’ve quietly done some further experiments and made a discovery: Karma is a tricky SOB. You see when I bet on something I lose. Even if it’s a sure thing, I lose. Even if there’s no way in the world it could happen, I lose. But farther, suppose I want one outcome if I put money on the other side, bet against myself as it were, the side I really want to win, won’t. I may “win” the bet but there Universe saw through my ruse and sees to it that I really still lose. This is why I did not put any money on the last US election. If I had bet on Clinton winning she would have lost. If I had put money on Trump winning, the Universe would have known I was betting against myself, and Trump would have won. In the end he did win, but at least it wasn’t my fault.

Which brings me to the most popular form of betting there is today; investing in the market. For the last few years an investment councillor named Mark Ting has appeared on On The Coast, CBC Radio-1 Vancouver’s afternoon drive time show. He’s there to give financial advice, investing advice, retirement advice, and tax advice. That’s all fine and good but as I sit in the car listening to him, I keep thinking one thing.

I don’t invest.

You see I view investing in the same class as gambling and I don’t gamble because I don’t win. Yes, I know a lot of people that say they have a system, I know a lot of people who have a foolproof strategy to succeed at investing. I also know a lot of people who have a foolproof way to win at Blackjack. The psychology is the same, as is the outcome; overall they lose. A few examples

  • My folks bought into a mutual fund in the sixties and made regular monthly contributions for the next twenty five years. When they cashed it in at retirement in the nineties, they had about what they had invested, minus fees. They would have been better off putting the money in a jar.
  • In the eighties I had a friend that was sure his investments would put him on easy street. It was the Go-Go eighties and “Retire at Forty”, was his plan. That lasted until the crash of 1987, and the Savings and Loan meltdown wiped him out. As far as I know, he’s still working.
  • In there nineties a coworker was heavily into investing. When he decided to cash in some of it to buy a house he discovered that his investments were not liquid. They would not give him his own money back when he needed it. He didn’t get the house
  • In the early 2000’s I knew a guy who was really into Day Trading. That lasted until the big dot com bubble popped and he lost his shirt, (and nearly his job because he had been doing it on the company computer during the day).
  • Then there was my cousin. A decade or two back he invested in his buddies oil exploration company. Over the years the value went up and up. Things were looking great. I talked to him this winter. The company has gone bust. His $20,000 investment is now worth $200. It cost him more to fill out the tax forms than his holdings were worth.

 

The fact is I have never known anyone that actually won in the market.

Over the years I’ve seen a few companies that I thought might be a good investment. Most every time I thought about it, and especially if I looked into it, the company would crash. Either they would run into a problem and collapse, or it would get bought out and vanish, or it would turn out to be a scam. Add to this how the press is full of Ponzi schemes, and this fraud, and that scam and I just do not take the risk.

In the late 1990’s my wife wanted to buy stock in Apple Computer. It was trading at I think $12 a share at the time and she wanted to get 100 shares. I hemmed and hawed about it but in the end I just couldn’t do it. Oh sure if we had, between stock splits and value increases we would be sitting on something like a million dollars right now. (My wife is happy to mention this at every opportunity.) But I know that if I had bought even a single share, Apple would have immediately collapsed. There would have been no iMac, no iPhone, no iPad, no amazing rise from the ashes. Apple would have gone the way of Gateway Computer and Amiga Computer. And it would have happened just because I had bought stock in it. I single handedly could have changed the future of the world for the worse.

Someone once suggested that, rather than buying individual stocks, I should put money into a market index fund. A fund that tracks the whole US economy. I thought about it. Then there was the early 1990s recession. And I knew I would be playing with fire. If I bet on the health of the whole US economy, then the whole US economy would go down the tubes. I could single handedly wipe out the country, just by buying a few dollars worth of stock. Imagine the stress that would put ME under. I can destroy corporate empires, make thousands go without food, obliterate whole industries, just by investing in them. It is a terrible power to have.

It’s better for all concerned that I don’t.

What I’d like to do is find someone, some investment company or bank that would pay me to do nothing. I’m not asking much. $3000/month and I won’t even look at the financial pages. Consider it insurance. But so far that idea has gone nowhere. It’s too bad too. I really thought it would work. I would have put money on it.

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