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Thread: The Stock Market is Not a Casino

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    The Stock Market is Not a Casino

    For those who have this question-

    The Stock Market is Not a Casino

    A reader asks:


    Ben showed the numbers for U.S. stock positive returns over the long-term. How does the data look for global ex-U.S. performance?
    Fair question.


    Here is the data I showed in a recent blog post:


    Since 1926, the U.S. stock market has experienced positive returns:

      • 56% of the time on a daily basis
      • 63% of the time on a monthly basis
      • 75% of the time on a yearly basis
      • 88% of the time on a 5 year basis
      • 95% of the time on a 10 year basis
      • 100% of the time on a 20 year basis
    My least favorite description of the stock market is that it’s just a casino where the house always wins.


    Maybe this is true if you are a day trader. But in a casino the longer you play, the higher your chances of walking away a loser since the house has the edge.


    The stock market is the opposite of a casino. The longer you play, the higher your odds of success in terms of experiencing positive returns on your capital.


    The ability to think and act for the long-term is your edge as an individual investor. Patience is the ultimate equalizer.
    ΜOΛΩΝ ΛΑΒΕ


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    It may not be a casino, but you do put your money at risk, a calculated risk ,but a risk nonetheless.. I have had it argued that it not gambling, but how is it not? You aren't guaranteed anything against loss.
    .

    Montani Semper Liberi


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    I have been told that since 1886 the DJIA has averaged over 8.5% even counting for the great depression, recession, wars etc. I didn't add it up but here's the data:


    https://www.slickcharts.com/dowjones/returns
    Any time you give a man something he doesn't earn, you cheapen him. Our kids earn what they get, and that includes respect. -- Woody Hayes​

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    Of course there’s a risk. Much of that risk can be minimized by investing in solid stocks. Over the long term the stock market is a great place to invest your retirement funds.
    When the people find that they can vote themselves money, that will herald the end of the republic.“ - Benjamin Franklin.


    “When people get used to preferential treatment equal treatment seems like discrimination.” - Thomas Sowell

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    Quote Originally Posted by DGUtley View Post
    I have been told that since 1886 the DJIA has averaged over 8.5% even counting for the great depression, recession, wars etc. I didn't add it up but here's the data:


    https://www.slickcharts.com/dowjones/returns
    Do you think the people pre 1929 had any idea what was coming they would have still invested? I know there are supposedly safeguards now to keep that from ever happening again. But think about though.The stock market is largely funded by fiat currency. I guess that's the safe guard .Just print more.

    Montani Semper Liberi


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    Quote Originally Posted by Tahuyaman View Post
    Of course there’s a risk. Much of that risk can be minimized by investing in solid stocks. Over the long term the stock market is a great place to invest your retirement funds.
    That was not the point. I have roughly a 100k give or take depending on what day it is ,in very conservative stock. Why? Because I'm too old to be making risky investments.

    Montani Semper Liberi


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    Ah...to young Turk kids it is a casino. Witness Bitcoin.

    epstein hung.jpg

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    Quote Originally Posted by NoisyBoy View Post
    Do you think the people pre 1929 had any idea what was coming they would have still invested? I know there are supposedly safeguards now to keep that from ever happening again. But think about though.The stock market is largely funded by fiat currency. I guess that's the safe guard .Just print more.
    • The stock market has declined by 25% or more on 11 occasions since 1871. The median recovery time from this point has been 1.8 years.
    • Investors who shifted to cash after the 1929 crash faced a 34-year wait to break even, compared with 15 years for those who remained invested and less than 7 years for those who drip-fed additional small amounts in.
    • A “dash for cash” in 2001 and 2008 would still have left investors out of pocket today

    webimage-B81A1F53-A663-4F0B-A3B2FE7A97120E72.jpg


    webimage-14ABACD3-9C9E-4BA2-B7E2E292D80AD6A1.jpg



    https://www.schroders.com/en/global/...-and-mentally/
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    So how many years does inflation go up compared to down? These days Apple and maybe 3 or 4 other companies make up over 25%-30% on the exchange they trade on. State Street alone managed around $50 trillion in funds. How many 'investors' can audit the companies they buy stock in, and buy based on what they actually know? How many more shares are there now compared to historical numbers? Of course it's gambling, and much of its 'value' comes from govt. bailouts and subsidies and tax bennies. What is the value of today's dollar versus 1970 dollars? Hint: A lot less than the govt. inflation calculators will claim it is.
    Last edited by Chuck; 05-27-2023 at 11:15 AM.

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    Everything is gambling. The dollar can crash tomorrow.
    Gold since 1970 (when the dollar went off the standard) matches the market but the risk is in a strong market instead of a dollar crash.

    There is no sure thing. But parking it in the bank is a sure loser against inflation.
    Let's go Brandon !!!

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