Through the first five posts I have talked extensively about two things: having a goal, and having a plan of action to achieve that goal. This is why outlines are useful, as I have found myself moving away from my original intent while writing these posts. However, I think each post reflects my thinking on the subject matter, although these ideas might be out of place at times. A good friend of mine would tell me not to worry about this, just sort through the clutter at the end of the day and put it together in a more cohesive form. I say what?
Tonight it is time to move on. Maybe I've put this part off because it will open me up to criticism and debate. Sometimes we get it in our heads that only we know what's best. Sometimes we ignore the fact that we are surrounded by those who have already gone through what we're going through now or had the good sense to avoid the situation altogether. Tonight I want to start wading through the murky waters of managing a bankroll. We have determined our goal -- in my case I do not want to squander the bankroll I have now. We have admitted to ourselves that we have certain tendencies that put that goal at risk -- compulsive habits, easy access to our betting money, frustration, and a lack of respect for this thing that we do. We have decided to limit our exposure to these things, whether it's leaving the house during the evening, avoiding bets we're not comfortable losing, or simply getting online during the course of events and writing a fucking book while the games play themselves out. Whatever it is it must hold our interest long enough to satisfy that part of us that craves action. But enough about all that. Let's talk about the actual process -- the physical part -- of protecting our bankroll.
Have you ever noticed the fine print when it comes to investing in a Mutual Fund (or any other legitimate investment)? It goes something like this: "Carefully weigh your risk tolerance. Past performance is no gurantee of future results." Well.... no fucking shit. Starting tonight and going all the way to my grave I will draw similarities between betting on sports and investing in the stock market. Many would tell you that gambling is a dishonest trade, but after what I have witnessed during the past year you would be hard-pressed to convince me that investing in the stock market is a more honest -- and therefore safer -- bet than laying my money down on Pittsburgh at -7. You could be the world's worst bettor when it comes to picking winners, but if you practiced good bankroll management then you would almost certainly have done better than the stock market over the past year. On the flip side you could have been the most honest person in the world, having worked your life to the bone, only to see your life savings squandered at the hands of an unscrupulous salesman on Wall Street. My heart goes out to those who have suffered that fate and I am not trying to make light of that situation as I write this. Instead of bailing out homeowners who entered into mortgages they couldn't afford maybe we should.... here I go, rambling off topic.
We are looking at our bankroll as an investment. We know that we are going to gamble over the long term so we must have a plan of action that supports us over the short term as well as the long term. The first step is to recognize our risk tolerence in relation to our bankroll. Are you content buying the Mutual Fund that has a historical performance of returning a compounded 5% a year, or would you rather take a shot at the fund that could possibly return 20% while taking on considerably more risk? Don't forget, at 15% compounded it takes roughly 7 years to double your original investment. Don't forget that you are putting your money in the hands of someone else when you buy a Mutual Fund -- akin to following a single handicapper exclusively when it comes to betting sports. You say to yourself, "Let's hope this motherfucker has a good year." Investors buy Mutual Funds because they would rather trust an expert rather than educating and trusting themselves. Bettors pay for handicappers for these same reasons. As long as you trust the guy there's nothing wrong with it, but don't ever forget where you're at. Past performance is indeed no guarantee of future success. In no way do I condone or recommend taking your life savings and putting it into play -- quite the opposite. As a bettor you are vulnerable to those things that could leave you broke in a matter of hours. I do, however, condone and recommend that you become an investor -- your own goddamn Mutual Fund Manager -- with your bankroll. Take it seriously.
No one can tell you what risk you are comfortable taking except yourself. I have not fully decided this for myself. I like to gamble. But I like to gamble every day. When placing my bets on Monday I know I still want to be alive and kicking on Sunday, not getting in a Wild West shoot-out for what I have left on Tuesday.
Again I have not expressed my thoughts as I had hoped, but there will be a # 7. For now, it's Meat Loaf, live from Nassau Coliseum, 1 Sep 1978.... Oh yeah....
Tonight it is time to move on. Maybe I've put this part off because it will open me up to criticism and debate. Sometimes we get it in our heads that only we know what's best. Sometimes we ignore the fact that we are surrounded by those who have already gone through what we're going through now or had the good sense to avoid the situation altogether. Tonight I want to start wading through the murky waters of managing a bankroll. We have determined our goal -- in my case I do not want to squander the bankroll I have now. We have admitted to ourselves that we have certain tendencies that put that goal at risk -- compulsive habits, easy access to our betting money, frustration, and a lack of respect for this thing that we do. We have decided to limit our exposure to these things, whether it's leaving the house during the evening, avoiding bets we're not comfortable losing, or simply getting online during the course of events and writing a fucking book while the games play themselves out. Whatever it is it must hold our interest long enough to satisfy that part of us that craves action. But enough about all that. Let's talk about the actual process -- the physical part -- of protecting our bankroll.
Have you ever noticed the fine print when it comes to investing in a Mutual Fund (or any other legitimate investment)? It goes something like this: "Carefully weigh your risk tolerance. Past performance is no gurantee of future results." Well.... no fucking shit. Starting tonight and going all the way to my grave I will draw similarities between betting on sports and investing in the stock market. Many would tell you that gambling is a dishonest trade, but after what I have witnessed during the past year you would be hard-pressed to convince me that investing in the stock market is a more honest -- and therefore safer -- bet than laying my money down on Pittsburgh at -7. You could be the world's worst bettor when it comes to picking winners, but if you practiced good bankroll management then you would almost certainly have done better than the stock market over the past year. On the flip side you could have been the most honest person in the world, having worked your life to the bone, only to see your life savings squandered at the hands of an unscrupulous salesman on Wall Street. My heart goes out to those who have suffered that fate and I am not trying to make light of that situation as I write this. Instead of bailing out homeowners who entered into mortgages they couldn't afford maybe we should.... here I go, rambling off topic.
We are looking at our bankroll as an investment. We know that we are going to gamble over the long term so we must have a plan of action that supports us over the short term as well as the long term. The first step is to recognize our risk tolerence in relation to our bankroll. Are you content buying the Mutual Fund that has a historical performance of returning a compounded 5% a year, or would you rather take a shot at the fund that could possibly return 20% while taking on considerably more risk? Don't forget, at 15% compounded it takes roughly 7 years to double your original investment. Don't forget that you are putting your money in the hands of someone else when you buy a Mutual Fund -- akin to following a single handicapper exclusively when it comes to betting sports. You say to yourself, "Let's hope this motherfucker has a good year." Investors buy Mutual Funds because they would rather trust an expert rather than educating and trusting themselves. Bettors pay for handicappers for these same reasons. As long as you trust the guy there's nothing wrong with it, but don't ever forget where you're at. Past performance is indeed no guarantee of future success. In no way do I condone or recommend taking your life savings and putting it into play -- quite the opposite. As a bettor you are vulnerable to those things that could leave you broke in a matter of hours. I do, however, condone and recommend that you become an investor -- your own goddamn Mutual Fund Manager -- with your bankroll. Take it seriously.
No one can tell you what risk you are comfortable taking except yourself. I have not fully decided this for myself. I like to gamble. But I like to gamble every day. When placing my bets on Monday I know I still want to be alive and kicking on Sunday, not getting in a Wild West shoot-out for what I have left on Tuesday.
Again I have not expressed my thoughts as I had hoped, but there will be a # 7. For now, it's Meat Loaf, live from Nassau Coliseum, 1 Sep 1978.... Oh yeah....
