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Frustrated Sports Gamblers Turn to U.S. Stock Market

edited May 2020 in Off-Topic
From The Financial Times

“Gamblers who cannot bet on professional sport because fixtures have been scrapped are flocking instead to the US stock market, creating a new class of customer for online brokerages and adding fuel to the market rally.The lockdowns that have kept billions of people indoors have halted the world’s biggest sporting events — from US basketball and hockey to European football, Indian cricket and even the summer Olympic Games in Tokyo. But brokerages that connect everyday investors to the stock market have seen a surge in account openings, as punters seek thrills in unfamiliar places. This has brought new investors to the market, helping to propel a one-third rise in US stocks from the depths of the pandemic sell-off in March.”

May Work - https://www.ft.com/content/4be0d6d3-ccab-48df-83e4-0b726273ccac

See Also - Top Listing Bing Search Page: https://www.bing.com/search?q=sports+bettersvturn+to+U.S.+stock+market+financial+times&search=&form=QBLH&sp=-1&pq=&sc=0-0&qs=n&sk=&cvid=8B41587CD5C84DAC9D38FBE8E9E27A3E

Comments

  • Oh that's rich. Just what the market needs, but then maybe it's always been that way.
  • Gambling money has no home as it moves from one to another with some gamblers going broke.
  • edited May 2020
    Randall Forsyth’s excellent opening commentary in this week’s Barron’s addresses the same phenomenon and the resurgence of day trading. He delves into some of the changes at brokerages that have lessened the cost of so doing. As I linked recently in a separate fund related thread, T Rowe appears to have eliminated virtually all of the short term redemption fees (as of April ‘19). I’ve recently taken profit from a couple international funds within 30-45 days of purchase (maintaining the bulk of the investment) without paying redemption fees. They continue monitor for abusive practices, however, so this is not a recommendation to others

    Forsyth also does a nice job looking at the muni bond crunch. Interestingly, he references which states are best positioned credit-wise, and which are poorly funded. He goes a step further and looks at several state pension funds. Interestingly, NY state’s is among the best funded, while Kentucky’s is near the bottom.

    The following link might work. However, I’d both prefer and recommend readers subscribe to Barrons. Reasonably priced for amount of content. The one subscription I look forward to each week. Great entertainment value even if you don’t care for the investing advice. Lots of numbers, from housing prices to payroll data.

    https://www.barrons.com/articles/day-trading-has-replaced-sports-betting-as-americas-pastime-it-cant-support-the-stock-market-forever-51590174899
  • "T Rowe Price appears to have eliminated virtually all of the short term redemption fees it once was known for (as of April ‘19). I’ve had success recently taking profit from a couple international funds within 30-45 days of purchase following the recent rebound (while maintaining the bulk of the investment) without being hit with redemption fees."

    As I've tried to explain elsewhere, there are redemption fees and then there are excessive trading restrictions.

    From various T. Rowe Price prospectues:
    Subject to certain exceptions, each T. Rowe Price Fund restricts a shareholder’s purchases (including through exchanges) into a fund account for a period of 30 calendar days after the shareholder has redeemed or exchanged out of that same fund account (the “30-Day Purchase Block”).
    So while you were able to take a short term profit without a redemption fee, it is unlikely that you would have been able to buy a dip within a 30 day period after having sold some shares. (MMFs and ultrashort term bond funds are excluded from this restriction.)
  • edited May 2020
    @msf - You are for correct. In my ongoing battle against excessive verbosity the point about the 30-day “lock” got edited out during revision. And, they do monitor for other abuses. I know of at least one person, who used to post here, who claimed to have been banned from investing at TRP for life based on his frequent trading history. These guys are more serious about abusive trading than many I suspect. BTW - Invesco has a similar lock, but it seems to apply only to very large amounts (over $100,000 I believe). Since I rarely buy / sell more than $100,000 at a time, their restrictions haven’t bothered me.:)

    To me, the “big news” here is that you can buy a fund like PREMX or PRLAX and grab off a quick gain without paying the old redemption fee that formerly applied (on select funds) sold within 90 days of purchase. I don’t remember the % amount, but it wasn’t trite (3-4% as I recall). Over the years, that fee came to be applied to more and more funds - some in the domestic arena.

    Yeah - I guess if you view their website as a gaming board, the 30-day lock would stymie your game. So your mention is not without merit. Thanks for adding some additional clarity here.

    Regards
  • I'm using some less aggressive etf's to harvest short-term profits:VIG XLP XLV VDC , since etf's have no minimum investment nor commissions. I've also stopped using Fidelity to buy more speculative investments due to their $2500 fund minimum;I now use Schwab for these due to their lower minimums.
  • I have partaken in the market gambling game in small amounts, but it is just for the fun of it. I don't expect to turn much profit, if any. My latest trifecta, SILJ, GDXJ, junior silver and gold miners after listening to rono having so much fun, and a very speculative stock LZAGY, a pharmaceutical manufacturer that will benefit if Moderna goes to market with a vaccine.

    Beats watching repeats of the Andy Griffith show during quarantine:)
  • edited May 2020
    MikeM said:

    I have partaken in the market gambling game in small amounts, but it is just for the fun of it.

    I suspect that’s part of the appeal of investing. I have an addictive personality and in the early years might easily have fallen victim to the frequent-trading game. Limiting myself to direct investments with just a handful of fund houses has mostly removed the temptation.

  • Great - let them play with the binary options at NADEX. Stay the hell out of the 'real' markets, please.
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