How casino make money? If we understand that, we can apply it in stock market and make money.
Please note that I'm not encouraging gambling, this is just a case study showing how to use casino owner strategy to make money in stock market.
How casino owner make money then?
First, probability or chances.
In almost every game, the chances of casino owner making money is higher than customer.
Example in a game of roulette with double zero, owner has an extra 5.26% winning chance.
If you bet "odd" or "even" you have 47.37% chance of winning, but casino owner have 52.63% chance of winning.
In stock market, we have to find stocks that have higher winning chances. That probably mean buy good fundanmental stock.
Second. People always say casino owners do not afraid you make money from them, they only afraid you stop visiting them again. What does that mean? It means in short term, owner win some, customer also can win some. But in long term, as long as customers keep playing, they will lose (due to probability or chances).
In Bursa Malaysia stock market? Meaning in short term, even if we buy good counter we may lose money in short term. But in long term, will make money.
Third. Amount of bet. In casino, there is a minimun bet amount and maximum bet amoumt. Each table will have its limit. This is for the casino owner to avoid winning small and losing big. Example they make from 7 customers $500 each = $3500. But what if they lose to one customer $1,000,000 and the customer stop playing?
In stock market, meaning our amount of investment need to be balance, about the same amount and not lopsided. This is to avoid us from losing very big in few transactions where the many small gain unable to cover the loss. That is the reason I use Dollar Cost Averaging.
Fourth. Casino owner make money because patience and no emotion.
Give you one example. A customer has $1,000. Each bet $50, playing blackjack, some games owner win, some he wins, that can last him few hours before losing all his money. But after one hour, all money gone. Why?
This is because after many games, he felt boring, started increasing his bet, change game and start playing something else. After a while, realise lost money, use his balance $300 and try to revenge by placing all $300 in one bet. Soon, all money gone.
Another example is, after started winning, the customer increase him bet, therefore, once started losing will be at higher amount.
In stock market? Meaning we have to be patient and cannot let emotion control us.
Fifth. Diversify. Imaging what will happen if all customers combined and bet with the casino owner for each game. Example all customers combined and bet $100 million with the casino owner. If casino owner win, they make $100 million, if lose, they lose $100 million.
They probably dare not. What they are doing is spread the risk by diversify, meaning average from all customers.
In stock market, we invest in different stocks in order to diversify.
Other related income. Casino owner make money by earning other related income. Example hotel and theme park.
In stock market we can also make other related income. How? Example earning money from trust account, IPO, work in stock market related areas, stock market blogging, etc.
Casino also trying to make more money by hoping the customers increase thier bet amount. We can increase our investment amount in stock market as we have higher income or salary.
From what we can see, casino owner make money because they have higher chances of winning in each game, long term business, controlling the minimun and maximun amount of bet, patience and no emotion, diversify and also earn from other income.
If stock market we can make money by buying good fundanmental stock that has higher chance of making money, long term, controlling our investment amount, patience and no emotion, diversify, and we can make other income if we want.
Please note that I'm not encouraging gambling, this is just a case study showing how to use casino owner strategy to make money in stock market.
How casino owner make money then?
First, probability or chances.
In almost every game, the chances of casino owner making money is higher than customer.
Example in a game of roulette with double zero, owner has an extra 5.26% winning chance.
If you bet "odd" or "even" you have 47.37% chance of winning, but casino owner have 52.63% chance of winning.
In stock market, we have to find stocks that have higher winning chances. That probably mean buy good fundanmental stock.
Second. People always say casino owners do not afraid you make money from them, they only afraid you stop visiting them again. What does that mean? It means in short term, owner win some, customer also can win some. But in long term, as long as customers keep playing, they will lose (due to probability or chances).
In Bursa Malaysia stock market? Meaning in short term, even if we buy good counter we may lose money in short term. But in long term, will make money.
Third. Amount of bet. In casino, there is a minimun bet amount and maximum bet amoumt. Each table will have its limit. This is for the casino owner to avoid winning small and losing big. Example they make from 7 customers $500 each = $3500. But what if they lose to one customer $1,000,000 and the customer stop playing?
In stock market, meaning our amount of investment need to be balance, about the same amount and not lopsided. This is to avoid us from losing very big in few transactions where the many small gain unable to cover the loss. That is the reason I use Dollar Cost Averaging.
Fourth. Casino owner make money because patience and no emotion.
Give you one example. A customer has $1,000. Each bet $50, playing blackjack, some games owner win, some he wins, that can last him few hours before losing all his money. But after one hour, all money gone. Why?
This is because after many games, he felt boring, started increasing his bet, change game and start playing something else. After a while, realise lost money, use his balance $300 and try to revenge by placing all $300 in one bet. Soon, all money gone.
Another example is, after started winning, the customer increase him bet, therefore, once started losing will be at higher amount.
In stock market? Meaning we have to be patient and cannot let emotion control us.
Fifth. Diversify. Imaging what will happen if all customers combined and bet with the casino owner for each game. Example all customers combined and bet $100 million with the casino owner. If casino owner win, they make $100 million, if lose, they lose $100 million.
They probably dare not. What they are doing is spread the risk by diversify, meaning average from all customers.
In stock market, we invest in different stocks in order to diversify.
Other related income. Casino owner make money by earning other related income. Example hotel and theme park.
In stock market we can also make other related income. How? Example earning money from trust account, IPO, work in stock market related areas, stock market blogging, etc.
Casino also trying to make more money by hoping the customers increase thier bet amount. We can increase our investment amount in stock market as we have higher income or salary.
From what we can see, casino owner make money because they have higher chances of winning in each game, long term business, controlling the minimun and maximun amount of bet, patience and no emotion, diversify and also earn from other income.
If stock market we can make money by buying good fundanmental stock that has higher chance of making money, long term, controlling our investment amount, patience and no emotion, diversify, and we can make other income if we want.
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