Catchy headline? No kidding. I was just as shocked. Earlier last week a reader sent me an article about the lottery. According to this article, you are more likely to win $50,000 in the lottery than you are to make $50,000 in investments.
This operates under the assumption that you purchase $10,000 worth of a certain lottery ticket, or invested $10,000 in a single stock. Not convinced? Neither was I. TW Analytics, a spin-off of a JP Morgan subsidiary crunched the numbers. By calculating the odds of winning in “The Big Cheese”, they were able to put a value on each ticket. As it turns out, with every 10 tickets purchased, one wins $10.73.
TW consulted data from JP Morgan’s investment bank and compiled the average return from an individual investor. They found that the average investor was better off buying the lottery tickets because of the rate of return was so low.
TW promptly notified the California Lottery of the odds, and “The Big Cheese” tickets have been recalled. Still it is sad that the average person was better off buying lottery tickets than they were investing. What does this say about stock picking? Don’t do it. It looks like you’re better off trying to hunt down deals at the local gas station. I think I’ll go pick me up a few scratchers.
Special note, this post is a complete and total fabrication. Kind of scary how convincing the written word is. Don’t blindly trust facts without sources. In the case of a blog, you need links.
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
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