Why Value Betting Should Be A Mainstream Asset Class

The most important question that arises when investing — and encapsulates the scepticism towards profitable betting — is the difference between investment and speculation. As the great investor Benjamin Graham puts it; “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”

By ‘safety of principal’ Graham is referring to the requirement of a margin of safety in a true investment; meaning that its market price is significantly below its intrinsic value (the difference of which being the margin). By ‘satisfactory return’ Graham is refuting ‘Get Rich Quick’ schemes — people chasing above average returns (compared to long-term historic performance) will be bound to end up speculating rather than investing. In the stock market, this could take the form of someone betting on the growth of a company whose name contains a ‘.com’, has no earnings reported and is trading at 1000x its expected future earnings, purely due to the belief that ‘the Internet is the future!’. Such was the case of the Dot-com Bubble at the start of the millennium. To a layperson, since these people were putting their money into the stock market, it was deemed an investment; when it very clearly was not. This is the type of misconception that is currently working in reverse in the sports betting industry — and it must come to an end!

Click the link below to read the full article.

Originally published at https://www.tradematesports.com.