January 20, 2010 Leave a comment
Over the years I have realized there are a lot of commonalities between investing in the stock market and gambling in Vegas. I believe there are a select group in both games that actually understand probabilities and how companies work that can do reasonably do well. But for the rest of us who aren’t willing to spend the time and money that it takes to get to that level, well it’s all just gambling. I decided to put together a list of common terms from both worlds that seem to match up pretty well.
Aggregate Limit – Total payout liability of a casino during any one game.
Growth Cap-with indexed life, in years where the underlying index increases, the policy cash value is increased up to a certain limit usually called the growth cap. Awesome, When the market actually does go up I can only receive so much.
Aggregate Winnings – Cumulative or total winnings.
A chief executive officer of a Standard & Poor’s 500 company was paid, on average, $10.9 million in total compensation in 2008, according to final data from The Corporate Library.
All-in (Also known as “Going All-In”) – In card room poker, to call with (to bet) all your chips. If another player bets more chips than you have in a No Limit game, you can go All-in and stake your total stack against an equal amount of your opponent’s stack.
401k contribution– Max out…get the match.
Arm – A term used in the game of craps to denote a player who is so skilled at throwing the dice that they are able to alter the conventional odds of the game. Such a player is said to be ‘an arm’. Whether or not such individuals actually exist or are simply the product of game legend is debatable. However, it is worth noting that the casino craps dealers are very adamant about the dice being thrown against the far wall of the table to ensure a completely random outcome.
Daytrader– your neighbor who claims he is up 100% every week, but can’t contribute to your kids soccer team because time are tough??
Automat Club – Also known as Videomat Casino, Arcade Casino, Slot Hall, is a gambling hall that offers automatic games that do not require a casino operator. Examples: slot/video machines, electronic touch-bet roulette, electronic Derby horse racing, etc.
Day Trading Software-when my screen turns GREEN time to buy, When it turns RED time to sell. Sounds like a game I played as a kid but never actually lost money when I kept going on a red light.
Baccarat -Table game using 6 or 8 decks of cards which does not require skill.
Asset allocation– involves dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash. That seemed to be a great strategy (negative returns) for the last decade.
Bankroll – Also known as ‘roll’ or ‘wad’ (colloquial). It pertains to the total money that either the player or the casino has on hand to back their wagering activities. A player’s bankroll can be classified as existing on several different levels. At the highest level it pertains to all money specifically set aside to support all gambling activities.
Majority of most peoples assets– Most Americans biggest asset next to their house is their qualified plans(invested in the market).
Barred – Same as Banned. Not allowed to enter the casino premises permanently.
Bernard Lawrence “Bernie” Madoff– Plus some of your neighbors that you thought to be honest..
Beginners Luck – In gambling, new players often are on a winning streak when they start gambling. Also known as the “Honeymoon Period”.
1990’s Investors-bummer for those who started in the last ten years.
Betting Limits – In a table game, the minimum and maximum amounts of money that a player can wager on one bet. You cannot wager less than the minimum or more than the maximum amount posted. Some casinos, in special cases, may extend the maximum limit at a table on request by the player.
401k Max Contributions-If you are over 50 they let you try to catch-up. Great you will be able to lose even more money!
Blind Bet – In poker, a bet posted without the player sees any of his/her cards.
Mutual Fund Purchase-You could close your eyes and get the same outcome. After you lose 50% you can open them to let the tears flow.
Break-Even Point – The break-even point is the point at which if you played forever, the bets you made would approximately equal the payoffs you would receive.
Retirement Age-Hopefully you break even by then. But if not, I would call Dave Ramsey and tell him that his strategy didn’t work and you want him to hire you and make sure you demand a signing bonus!
Brick – A card that appears not to help a player’s poker hand. A ‘blank’ in 7-card stud poker.
Broker – is the person who earns commission by being a third-party link between buyers and sellers. Maybe we could call them “Brick Brokers”
Call – In Poker, to call is to match the current bet.
Match-It’s a 100% return! I don’t think the market cares whether it loses your money or the match.
Camouflage – Anything a skilled gambler does to conceal their activities from the casino. Camouflage can include mixing in playing and betting behavior that mimics typical gamblers, or using disguises, appearing to be drunk, or any number of other possible ploys intended to throw the casino’s scrutiny off.
Financial Planner-They make you think that you are getting a non-bias recommendation and forget to mention they get paid commissions on the products they sell to you. The most common ploy to make you think they know what they are talking about is to make sure you know they are an M.B.A. by telling you in non-direct ways like having it on there wall and sometimes even putting it all over their marketing material and business cards.
Caribbean Stud Poker – Also called ‘Casino Stud Poker’, A casino table game based on the standard 5-card stud poker game played on a Blackjack-type table. Some casinos also offer a progressive jackpot paid to high ranking hands. This table game is played with one deck of cards.
Offshore Investing-either on could be fun if you went to the Caribbean!
Casino Rate – A reduced hotel-room rate (price) that the casinos offer to good customers.
I wish-Why don’t mutual fund companies set me up in a hotel every time I lose money?
Chase – Having lost money on a bet, ‘chasing’ is having another bet simply to try and get back the loss.
Dollar Cost Averaging -is a timing strategy of investing equal dollar amounts regularly and periodically over specific time periods (such as $100 monthly) in a particular investment or portfolio. .
Coat-tail – Bet the same numbers as someone who is winning at the moment.
Hot Stock-Just turn on the T.V. and you can find a tip.
Cold – A player on a losing streak, or a slot machine that is not paying out.
Investor-let’s see I think 10 years would be considered a losing streak and that darn stock market machine.
Cracking The Nut – Making enough money on a gambling venture to cover all expenses plus a reasonable net profit.
Not You-I wonder how many actually have done this in the last decade?
Craps – Casino dice table-game.
Craps– What you say when you have to admit to yourself that the stock market hasn’t worked.
That is the end of my list. I hope you enjoyed it and would love to hear some of your comparisons.