To many people, the relationship between betting on sports and investing in stocks isn’t all that obvious. So much so that one wouldn’t necessarily spark an idea about the other. But when you really think about it, there are indeed many similarities between the two, and in anything, a great deal that can be learnt from either one, and applied to the other.
For a start, both rely at least to some extent on predicting the future, or future outcomes, if you will. And not surprisingly, sports bettors and those who dabble in stocks can both fall into the trap of decisions made with the heart instead of with the head.
These are lessons learnt and applicable both ways.
‘Risk’ Isn’t Always Obvious
If recent times have taught humanity anything, then its to expect the unexpected. Anything can happen. And so, to assume any bet or stock 100% fail-safe, is a mistake. The thing about risk, is that perceived risk and actual risk seldom go hand in hand.
A prime example is betting against the crowd when betting on sports. Take betting on Mixed Martial Arts (MMA). Since betting on MMA is fairly new, bookies don’t yet have it all completely figured out. Which is not to say that the crowd won’t go along with the odds ‘as are’ in any way. This may create a “perceived risk”, i.e. a risk seen as either high or low from a certain perspective. In a case like this, betting against the crowd may seem particularly risky business to the inexperienced bettor but may not at all be in line with the “actual risk”.
The Thinking Makes The Man
A psychological quirk, in both betting on sports as well as betting on stocks, can make a man (or woman!) think ‘himself’ better at judging something on the money than what he actually is. And there’s nothing quite as effective as following a ‘personal hunch’ at emptying out the old bankroll. Hunches are volatile – look for the facts instead.
Heart Vs Head
Granted, save for a couple of exceptions, making decisions with the heart instead of with the head is a folly more prominent among sports bettors than those dabbling in stocks. Anyone who has ever been to a live team sports event shouldn’t have too much difficulty imagining why this is so. Its perfectly natural to want to bet on the Astros winning the MLB World Series, but merely wanting it to be true, however badly, certainly doesn’t mean that the Yankees won’t win instead.
Knowledge Is Power
It really is. And it’s a truth that applies equally to both betting on sports and betting on stocks. It simply isn’t good enough to ‘go with a feeling’ or do what everyone else appears to be doing. In order to ‘win’ at either, its necessary to go in properly informed. Also, forget about what happened last weekend or even last year. Learn how to play the long game. The long game pays.