Page 6 - February 2010 • Southern California Gaming Guide

Bill Burton: About Gambling
SItock Investing and Casino Gambling
recently attended a stock investment seminar that was held by a brokerage rm. Obviously, the rm subsidized the course because they know educated investors can pro t themselves and potentially become long-time customers. As I was
sitting in the class, I noticed that there were many similarities between successful stock investing and casino gambling.
MoneyManagement
e very rst thing mentioned in the seminar was that many people make money investing in the stock market, but the majority lose it all back because they do not know how to manage their money. Many investors jumped into the stock market in the late 90’s and made an enormous amount of money only to lose it all when the market took a down turn in 2002. History repeated itself a few years later when the market took an upturn in 2005 and then came crashing down again in late 2007. Again, we had big gains followed by big losses and those who stayed in for the duration lost money.
Many gamblers have big wins in the casino, but end up losing it all back again. is is also because of improper money management which is controlled by one of the two emotions that rule us: fear and greed.
When we win big, it is our greed that makes us keep gambling or investing all of our winnings because we want more. You
have to learn to
lock up a pro t after you win. is does not mean that you have to quit playing, but you should establish a limit on the amount of your winnings you want to continue gambling with.
Stop Losses
When you win at the casino, you should lock up some of your winnings. If you want to continue playing, set a stop loss where you will quit if you start to lose. Like the smart investor, you can keep raising the stop loss as you continue to win. You can use a percentage of your win as your new stop loss. For example, you might pick 50%. If you win ten dollars more, raise your stop by ve dollars and so on.
Plan the Trade—Trade the Plan
Successful people know how to make a plan and follow it, instead of running about aimlessly and making decisions on the spur of the moment. We were told in the investment seminar that we need to have a plan before we ever enter
at the casino; then decide how much money you are willing to spend gambling. is amount will be your stop loss for the entire visit. Knowing this amount, you can divide your money into a number playing sessions. You should also have a pro t goal if you have a winning session.
Risk and Reward
Stock investing and casino gambling share several other principles. ere is the risk to reward ratio which means that the bigger the reward, the more risk that that you will lose your money. If you invest in certain riskier options, you will occasionally score big. But you will lose more often because the odds against you are so high. is is similar to playing progressive slot machines where you might win a big jackpot, but jackpots will not happen very often.
Rule #1
e most important rule that applies to both investing and casino gambling is to never invest or gamble with money that you cannot a ord to lose. ere are no “sure bets” in the stock market or in the casino, and you must be prepared for any losses that may occur. However, if you manage your money correctly, you may see a big return on your investment. Good Luck!
Until next time, remember: “Luck comes and goes.. Knowledge Stays Forever.”
Bill Burton is the author of 1000 Best Casino Gambling Secrets and Get the Edge at Low Limit Texas Hold’em available online at www.billburton.com. Burton is also an instructor for Golden Touch Craps: www.thecrapsclub.com.
“Many gamblers have big wins in the casino, but end up losing it all back again. This is also because of improper money management which is controlled by one of the two emotions that rule us: fear and greed. When we win big, it is our greed that makes us keep gambling or investing all of our winnings because we want more. You have to learn to lock up a profit after you win. This does not mean that you have to quit playing, but you should establish a limit on the amount of your winnings you want to continue
gambling with.”
a stock trade.
e plan should
include a pro t goal and a stop loss if the trade goes wrong. By having a clear plan established before we trade, we can take the emotion out of our decisions and hopefully not succumb to fear or greed. e plan includes the type of trade, the amount of money we want to risk or win on each trade, along with the amount of time we are planning to spend trading.
Many casino players simply go to the casino with a pocket full of money and jump from game to game until all their
e secret of being
a successful stock
trader is learning to
cut your losses short
and letting your
pro ts run. Stop
losses have to be
decided before the
trade, and you must
get out if that stop is
hit. Stock investors
use a trailing stop
on their winning
trades. When they
make money, they
will raise their stop
limit above their initial investment to guarantee a pro t. As the stock climbs higher, they keep raising the amount of the stop.
money is gone. Before you go to the casino you should establish a plan for your visit. e rst thing you need to decide is how much time you will spend
Page 6
SOUTHERN CALIFORNIA GAMING GUIDE
February 2010
About Gambling with Bill Burton