Opposite of a Casino

“Historically, the stock market is like a gambling casino with the odds in your favor. Over the long pull, stocks are given something like 9 1/2 to 10 percent compounded per year.” –Burton Malkiel

06-12-2023

Probably my least favorite description of the stock market is that it’s just like a casino where the house always wins. As Malkiel correctly points out in the above quote, it’s exactly opposite of this.

We’ve all known or heard of people who get free trips to Vegas. Everything’s comped….meals, lodging, transportation. These are the high rollers. They are comped because they are heavy gamblers. Vegas wants people like this out there gambling at their casinos. Why? Because the house has the edge. The longer you play, the higher your odds of walking away a loser.

It’s the exact opposite when investing in the stock market. The longer you play, the higher your odds are of experiencing a positive return on your capital.