I was watching the news last night and they had some guy on talking about the plummeting stock market. And he was arguing that now might actually be a good time to invest in some stocks.
After I finished laughing and crying, I decided to assess the stock market as if it were a new casino game I was going to start playing.
You know, figure out the approximate house edge I could expect, to decide if it’s worth it.
Short answer? It’s not worth gambling on the stock market. Not even close. You’d be much smarter to invest your money playing Roulette.
But let’s look at the house edge for the stock market as a whole, using the Dow Jones average. In the last month, it has gone down in value from approximately 8270 to a low of 6547.
Which means it’s paying out at about 79% over the month.
Which means the house edge for the stock market is about 21%.
Now let’s compare that to Blackjack. If you play perfect strategy, you can trim down the house edge to less than 1% (actually about .47%, but who’s counting?).
Even the casino games with the biggest house edge come in at way, way less than 21%.
Now before any of you people who actually understand numbers and stock markets come in and tell me I’m an idiot, I should say this…I’m not pretending to know anything about this stuff.
I just thought I’d take a quick peek at the numbers, and then do something that’s actually fun, like play a game of video poker.