Sunday, March 11, 2012

Gambling in Stock Market

Recently, one of my client told me, invest in Stock market is similar to gambling, because he seem to lost money by speculate certain stocks.

First, let say you go to Genting (Malaysia's biggest gambling company) bring with you $5,000, what's the chances to win the money? You will say I don't know... well, you are right, you really don't know, because you are gambling. Some may think that if they are lucky, they might win. But I can tell you, the chances are very slim, because Genting's business owner already calculated the risk and rewards. They have already plan for each game, your chances are less than 50%. If you don't believe, you can bring $5,000 to try your luck.

Now you look at Genting's business, it's growing every year, not only in Malaysia, it grown it's business in Singapore, Hong Kong, UK and recently in US. The family who own the Genting, uncle Lim (now his son) is one of the Malaysia's top 5 richest business man. What make them rich if not because of they own a Great business? Those who kept the Genting share since day one when it was listed at Bursa Malaysia's (last time also known as KLSE) has became a millionaire too if he were to sold all his shares today. Do you think if someone just gambling $5,000 every month at Genting for the past 20 years can become today's millionaire?

What happen if you take $5,000 and invest into Genting's share today? I can tell you, unless Genting go bankrupt (the chances is less than 5%), if not, you can see your $5,000 grow every year. What happen if tomorrow Market suddenly goes down and Genting's share price drop? I will buy more, because I can own one of the Malaysia's best company with lower entry point, how great it is! Further more, it pay some dividend every year... ok, I don't tell you too much, as this is a public blog.

Now decision is yours, do you want people call you gambler or you want them to call you Investor? Do you still think invest in Stock Market is similar to gambling?

1 comment:

  1. Fabulous! Vincent, yr blog truly enriched with genuine knowledge...yessss!investor and gambler are two huge diffrnt title's! hahaha. I like the question you asked...great blog that provides so much knowledge to us, Thank you ..hv a nice day :D


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