Many people began to invest in stocks after GameStop’s stock went from $18 up to $483 in January 2021. Major media houses called Wall Street a “casino” as thousands of Reddit users gambled on the stock’s short squeeze. This metaphor is appropriate as it shows how investors and gamblers can put their money at risk in order to win big. There are many things that distinguish gamblers from investors. These are three things that distinguish gambling from investing.
Investing and Gambling – Gamblers Don’t Have the Patience Needed to Invest
Investing is about patience, unless you are into high-volume trading. Stocks are not subject to social media mania, with the exception of GameStop. They take months or years to make progress, even with sound financial and business plans.
Think about how many Roulette spins and Blackjack hands a gambler could play in 60 minutes. An online gambler can play for hundreds to thousands of Rupees.
It’s not unusual for gamblers to feel bored and restless when they purchase stocks. They will continue refreshing the “Positions” page, waiting impatiently for the stock to drop in price.
Also Read: Live Roulette vs Online Roulette
Gamblers’ View of Risk vs Reward is Distorted
The payout odds for different games and wagers are made public by casinos. They do this to attract new gamblers and ensure that everyone knows the payout odds for different games and wagers.
These payout odds become ingrained in recreational gamblers’ minds. They don’t realize that Sic Bo rolling 4-4 may only happen once in 10 rolls. Sic BO players aren’t getting the right return for the risk they take, despite having true odds of 10/1 and inferior chances of 9/1.
These values are not applicable to the stock exchange. You will get a return on the money you put at risk. You can get a return of double, triple, or ten times but it’s impossible to predict the outcome.
Gamblers Like Short-Term Wins Over Long-Term Stock Plays
Because they offer a chance to win a huge jackpot, slot machines are a popular choice for gamblers. Gamblers continue to spin the slot machine hoping to win a jackpot on the next spin.
Gamblers who are interested in short-term wins don’t want to wait for their stock to rise indefinitely.