When I tell someone that I work the Stock Market, I am often called a Gambler. The comment comes most often from someone who has never invested in anything beyond Savings Accounts and GICs. There is a huge difference between the Stock Market and Casinos and Lotteries.

Unfortunately, in Canada, according to research, the #1 retirement plan is winning a Lottery. It absolutely baffles me when I go into a lottery kiosk and see someone putting down $50 to $100 for tickets. I often wonder about their financial situation. I would love to know how much they win versus how much they spend. I know that they would get at least some return if they took that money and invested it in almost any real investment.

I don’t like to invest in anything where I have NO control.  Pushing the button on a slot machine in no way influences the outcome.  Even buying multiple Lotto tickets still does not improve your odds enough to make a difference.  Using Lotto 6/49 as an example. Odds of winning with one ticket are 1 in 13,983,816.  Buying 20 tickets improves your odds to 1 in 699,000.

Compare that to a TSX stock. A randomly selected TSX Stock has a slightly better than 50/50 chance of going up on any given day!!  And there are roughly 600-700 stocks available for less than $5.00 a share. (average price of a lotto ticket) Even betting the odds, Stocks are a more sure bet than any Lottery or Casino Game.

If you’re going to go to the Casino, chasing that big win, at least play the games that have the lowest odds in favor of the Casino.  Some of these are Black Jack, Craps, Baccarat (always bet on the Banker), Video Poker (9/6 machines only), Poker (against other live players), and European Roulette (only 1 “0” spot).  The odds are ALWAYS in the House’s (casino’s) favour.  Playing the above mentioned games brings the odds against you down to about 1% or less.  By the way, Ontario has by far the greediest casinos.

My wife and mother in law both love to go to the casino. They often bring a family friend. I usually do the driving. My nick name is the “Money Police”. I do my best to try and keep them realistic and going home with at least some money.  For sure, there are some trips that are quite profitable. But they are not in the majority. On my first trip to Las Vegas, it took me about 20 minutes to figure out the only sure way to make money at a Casino; was to OWN THE CASINO!!”

Investing on the other hand has tons of rules about disclosure of information, especially PUBLIC companies (the ones that trade on a market).  Each of the Canadian markets have strict rules regarding bookkeeping and disclosure.  There is a website SEDAR+ (https://www.sedarplus.ca) that has all the information that every public company has to publish.  The slot machines don’t even tell you what their win percentage is.  Financial advisors have strict rules, and getting a license as a Mutual Fund advisor is very tough. (I’ve passed the exam and had the license.)

When I say investing is safer than Casinos and Lotteries, I often get the response about “Insider Trading”.  Yes Insiders (CEO, CFO, Directors, Officers, and anyone owning more than 10% of a company’s shares) HAVE to disclose publicly when they buy, sell, or otherwise get or dispose of shares.  By law, companies MUST disclose any information publicly (usually a press release) that could affect the price of the stock. Getting a stock tip from a company truck driver is not inside information!!

There are even companies that track this information so you, as an individual, can get it.  I use the site every day!! It is called INK Research. (https://www.inkresearch.com/prelog/) I don’t buy a stock without checking it on their site first.  I VERY HIGHLY recommend their site!!!  If I see that any of the insiders (I like to see what the CFO is doing) are buying, then there is a chance the stock will go up.  If there is a bunch of selling, then chances are it is not a good time to buy. Insider trading is not a reason to not invest in the market.

So there you have it.  Odds of 13,983,816 to 1 or 50/50.  I will admit there is less work and research required to buy a ticket or push a button.  But I like winning more often than loosing.  Yes, as the picture shows I do go to the Casino every so often.  And I do play: (the games you should play) and I do buy 2 lotto tickets a week, but only one number each.  Even with terrible odds, someone wins eventually.  I stopped tracking how much I spend on those tickets versus how much I win.  It was too depressing.

Is working the stock market really gambling??