Tag: gambling

Busting 3 Common Myths About the Stock Market: Insights That Challenge the Status Quo

by Fred Fuld III

The stock market is often surrounded by myths that can intimidate potential investors or lead to misconceptions about how it works. Whether it’s seasoned traders or first-time investors, many still fall prey to outdated beliefs or misleading narratives. Today, we’re going to debunk three of the most common stock market myths and provide fresh perspectives on what really drives success in the markets.

Myth 1: Investing in Stocks is Just Like Gambling

The Reality: While both stock investing and gambling involve risk, the two are fundamentally different in terms of strategy and long-term outcomes.

The notion that investing in stocks is equivalent to gambling is rooted in the fact that both activities involve uncertain outcomes. However, gambling is typically a zero-sum game with fixed odds, where the house always has the advantage. In contrast, stock investing is a way to own part of a business, and the value of that business can grow over time as it generates revenue and profits.

Unique Insight: The stock market rewards informed decisions and long-term thinking. Rather than relying on chance, successful investors analyze businesses, industries, and market trends to make calculated investments. While there are short-term fluctuations, over the long term, the stock market tends to reflect the growth of the economy, offering opportunities for investors to grow their wealth as well.

Takeaway: Smart investing is about researching and understanding the companies you invest in, not simply “betting” on the next big thing.

Myth 2: You Need a Lot of Money to Start Investing

The Reality: In today’s digital age, investing is more accessible than ever, and you don’t need to be wealthy to start.

One of the biggest barriers for would-be investors is the belief that you need thousands of dollars to make meaningful investments. In the past, this might have been somewhat true due to high brokerage fees or minimum investment requirements. However, the landscape has shifted dramatically with the rise of low-cost brokers and fractional shares, allowing individuals to invest with just a few dollars.

Unique Insight: The real key to success isn’t how much money you start with but how consistently you invest and for how long. With compounding interest, even small, regular investments can grow substantially over time. Many online platforms now allow you to invest in fractional shares, meaning you can own a portion of expensive stocks like Amazon or Tesla without needing the full share price.

Takeaway: The power of investing lies in the habit of starting early and being consistent. You don’t need to be wealthy to build wealth.

Myth 3: The Stock Market is Too Volatile for Average Investors

The Reality: While short-term volatility exists, long-term investors typically outperform by riding out the ups and downs.

The fear of losing money during market downturns leads many people to believe that the stock market is too unstable for the average investor. This perception often comes from focusing too much on short-term price movements. It’s true—the market can experience sudden drops, but historically, it has always recovered and continued to grow over time.

Unique Insight: Market volatility is often overemphasized in the media, which can make it seem like investing is risky business. In reality, volatility is a normal part of the market cycle, and those who can stay calm and avoid selling in panic often come out ahead. What really drives long-term gains is time in the market, not trying to time the market. Holding a diversified portfolio of stocks over the long term has historically provided returns that outpace inflation and other investments like bonds or real estate.

Takeaway: Volatility is not your enemy. Long-term investors who stay the course usually benefit from the market’s overall upward trajectory.

Conclusion: Redefining Stock Market Success

Investing in the stock market doesn’t have to be a gamble, nor does it require a large sum of money or a high tolerance for risk. By dispelling these myths, we hope to show that the stock market is a tool that can be harnessed by everyday investors—those who take the time to learn, make informed decisions, and stay patient.

Remember, building wealth through the stock market is not about overnight success but rather about thoughtful and consistent long-term investments. So, get started today, even if it’s small, and let time work its magic on your portfolio!

What other stock market myths have you come across? Drop them in the comments below, and let’s continue to separate fact from fiction!

Are You Going to Bet on Sports Betting Stocks?

by Fred Fuld III

Can you believe it? Now Disney (DIS) is getting into sports betting through its ESPN division and an agreement with Penn Entertainment (PENN).

Sports betting is legal in 37 states and Washington, D.C. as of August 2023. The first state to legalize sports betting after the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA) in 2018 was New Jersey. Since then, there has been a rapid expansion of sports betting in the United States.

The states that have legalized sports betting have different laws and regulations governing the industry. Some states allow only in-person betting, while others allow both in-person and online betting. Some states have a monopoly on sports betting, while others allow multiple operators to offer sports betting services.

The growth of sports betting in the United States has been driven by a number of factors, including the popularity of fantasy sports, the increasing availability of mobile devices, and the legalization of sports betting in more states. The industry is expected to continue to grow in the coming years, as more states legalize sports betting and more people become interested in betting on sports.

Here is a list of the states that have legalized sports betting as of August 2023:

  • Alabama
  • Arizona
  • Arkansas
  • Colorado
  • Connecticut
  • Delaware
  • Florida
  • Georgia
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Mississippi
  • Missouri
  • Montana
  • Nevada
  • New Hampshire
  • New Jersey
  • New Mexico
  • New York
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Vermont
  • Virginia
  • Washington
  • West Virginia
  • Wisconsin
  • Wyoming

The future of sports betting in the United States is bright. The industry is expected to continue to grow in the coming years, as more states legalize sports betting and more people become interested in betting on sports.

DraftKings (DKNG): DraftKings is a leading online sportsbook and daily fantasy sports (DFS) company. It operates in 19 states and Washington, D.C., and has a market capitalization of $13.8 billion. DraftKings offers a variety of betting options, including sports betting, DFS, and iGaming. It also has a media division that produces content for its own platforms and for third-party partners.

DraftKings was founded in 2012 by Jason Robins, Matt Kalish, and Paul Liberman. The company quickly became one of the leading DFS companies in the world. In 2018, DraftKings launched its sportsbook in New Jersey, becoming one of the first companies to offer legal sports betting in the United States after the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA).

DraftKings has grown rapidly in recent years. In 2022, the company generated $1.3 billion in revenue and $463 million in net income. DraftKings is expected to continue to grow in the coming years, as more states legalize sports betting and more people become interested in betting on sports.

DraftKings is a publicly traded company on the NASDAQ stock exchange (ticker symbol: DKNG). The company’s stock price has been volatile in recent years, but it is currently trading at a market capitalization of $13.8 billion.

DraftKings is a well-positioned company to benefit from the growth of the sports betting industry in the United States. The company has a strong brand, a proven track record, and a diversified product offering. DraftKings is also well-capitalized and has a strong management team.

The company is currently generating negative earnings, however, annual sales growth for the last five years, is 63.5%, and quarterly revenue growth year-over year is 84.5%.

Penn National Gaming (PENN): Penn National Gaming is a casino and gaming company that owns and operates casinos, racetracks, and sportsbooks in 19 states. It has a market capitalization of $3.87 billion. Penn National Gaming is one of the largest casino operators in the United States and is also a major player in the sports betting industry.

Penn National Gaming entered the sports betting market in 2018, when it acquired theScore, a Canadian sports media company. TheScore operates a sportsbook in Canada and has a partnership with Penn National Gaming to offer sports betting in the United States.

In 2020, Penn National Gaming acquired Barstool Sports, a popular sports media and entertainment company. Barstool Sports has a large and engaged following of sports fans, which Penn National Gaming is hoping to leverage to grow its sports betting business.

Penn National Gaming is well-positioned to benefit from the growth of the sports betting industry in the United States. The company has a strong portfolio of casinos and racetracks, which can be used to attract sports betting customers. Penn National Gaming also has a strong brand and a proven track record in the gaming industry.

Here are some of the key things to know about Penn National Gaming’s sports betting business:

  • The company operates sportsbooks in 13 states and the District of Columbia.
  • It has partnered with Barstool Sports to offer sports betting in several states.
  • It is also a major investor in theScore, a Canadian sports media company that operates a sportsbook in Canada.
  • Penn National Gaming is expected to continue to grow its sports betting business in the coming years, as more states legalize sports betting and more people become interested in betting on sports.

The stock trades at a great six times trailing earnings and 12.5 times forward earnings. Quarterly earnings growth year-over-year was an incredible 987.9%, on a revenue increase of 7%. It has a superior price to earnings growth [PEG] ratio of 0.27, an excellent price to sales [PS] ratio of 0.59, and sells at 92% of book value.

Flutter Entertainment (PDYPY): Flutter Entertainment is a British gambling company that operates in over 20 countries. It is one of the largest online sports betting companies in the world and owns the Paddy Power Betfair brand.

Flutter Entertainment entered the United States sports betting market in 2018, when it acquired FanDuel, a leading online sportsbook. FanDuel has since become one of the most popular sports betting apps in the United States.

In 2020, Flutter Entertainment acquired TVG, a pari-mutuel online betting network, which is active in 35 states. TVG has a strong presence in the horse racing market, which is a growing segment of the sports betting industry.

Flutter Entertainment is well-positioned to benefit from the growth of the sports betting industry in the United States. The company has a strong portfolio of brands, a proven track record, and a global reach. Flutter Entertainment is also well-capitalized and has a strong management team.

Here are some of the key things to know about Flutter Entertainment’s sports betting business:

  • The company operates sportsbooks in 18 states and the District of Columbia.
  • It owns the FanDuel and TVG brands, which are two of the most popular sports betting apps in the United States.
  • It is also a major investor in Adjarabet, a Georgian sports betting company that operates in several countries in Eastern Europe.

Flutter has a market cap of $34.3 billion, and is currently generating negative earnings. Revenues for the latest reported year were up over 27%.

Churchill Downs (CHDN): Churchill Downs is a horse racing company that owns and operates the Kentucky Derby and several other racetracks. It also has a sports betting app in Indiana and Illinois.

Churchill Downs entered the sports betting market in 2019, when it launched its sportsbook in Indiana. The company has since expanded its sports betting operations to Illinois and is expected to launch sportsbooks in several other states in the coming years.

Churchill Downs is well-positioned to benefit from the growth of the sports betting industry in the United States. The company has a strong brand, a proven track record in the horse racing industry, and a large customer base. Churchill Downs is also well-capitalized and has a strong management team.

Here are some of the key things to know about Churchill Downs’ sports betting business:

  • The company operates sportsbooks in Indiana and Illinois.
  • It is expected to launch sportsbooks in several other states in the coming years.
  • It has a partnership with DraftKings to offer sports betting in several states.

This $9 billion market cap stock has a trailing P/E ratio of 26 and a forward P/E of 16.7. Earnings per share growth this year was a strong 81.2% and quarterly sales growth was up 31.9%. The company even pays a small dividend, providing a yield of 0.29%.

MGM Resorts International (MGM): MGM Resorts International is a casino and resort company that owns and operates casinos, hotels, and entertainment venues in 17 countries. It also has a sports betting app in Nevada, New Jersey, and several other states.

MGM Resorts International entered the sports betting market in 2018, when it launched its sportsbook in Nevada. The company has since expanded its sports betting operations to New Jersey and several other states.

MGM Resorts International is well-positioned to benefit from the growth of the sports betting industry in the United States. The company has a strong portfolio of casinos and resorts, which can be used to attract sports betting customers. MGM Resorts International also has a strong brand and a proven track record in the gaming industry.

Here are some of the key things to know about MGM Resorts International’s sports betting business:

  • The company operates sportsbooks in Nevada, New Jersey, and several other states.
  • It has a partnership with BetMGM, a joint venture with Entain PLC, to offer sports betting in several states.
  • It is also a major investor in BetMGM, which is one of the leading sports betting companies in the United States.

This $16.9 billion company trades at 44 times trailing earnings and 16 times forward earnings. Earnings per share growth this year jumped.44.6%. The very small dividend yield is 0.02%.

These stocks are all poised to benefit from the growth of the sports betting industry in the United States. As more states legalize sports betting, these companies will be well-positioned to capture a share of the market.

Disclosure: Author didn’t own any of the above at the time the article was written.