The Differences between a Casino & a Stock Market

Investing in the stock market requires extensive research into the past performance of the market constituents, news, and other indicators that point to the future of the stock markets. The future can more or less be predicted by a detailed analysis of the underlying factors, but the actual results may not be guaranteed. It is possible for investors and speculators to make an informed decision through educated guesses, which is why stock market investing is considered by experts to be a viable form of investment.

Gambling in a casino, on the contrary, depends purely on chance, as it is impossible to predict the outcome. House edge in a casino leads to diminished odds, which also results in an adverse environment for players. The only benefit of playing at a casino is that players get to enjoy the gaming experience, and generally, have a good time with their family or friends.

Where do the Similarities Exist?

In a stock market, a trader or an investor must perform due evaluation and extensive analysis of the markets to make an informed decision. However, some people jump into the markets without any preparation, in which case, they are gambling with their money. Gambling is defined as wagering on anything with a chance, and if a trader decides to take a chance with the outcome of the price of a stock or an underlying index/exchange, he/she is better off wagering that money at a casino.

While preparation and expertise are an essential aspect of stock market investing, successful gamblers use their skills and analytical capabilities to beat the house or other players in a casino. Casino games such as Poker, Blackjack, and other card games involve a tremendous amount of skill, along with excellent money management skills. Therefore, experienced and successful gamblers are often considered as professionals and may be deemed to be the equivalent of successful investors and traders in a stock market.

Both industries have their risks and rewards, and it is difficult to make a judgment on which is the safer alternative. However, if you are looking to exercise your analytical prowess and the ability to understand the market, the stock market may be a safer bet for you; but if you are looking to have some fun and get lucky, gambling at an online or local casino is the better option.

Investing in the stock markets has built up a negative reputation for being one of the riskiest investment vehicles in the entire world. Some even consider trading the stock markets to be just another form of gambling, as both offer an incredible opportunity to make amazing returns within a short span of time. However, the downside risk is too significant to ignore, but there are some core differences in the underlying concepts of both industries. Is stock market trading the same as gambling in a casino? Which is the safer bet for investors?

Investing in the Stock Markets

A stock market is merely a collection of stocks or shares offered by companies to raise capital for their operations. Shares are usually floated in an exchange, where investors can buy them for a particular price and enjoy dividends in the long run. The stock price of companies keeps fluctuating according to their performance in the market, and speculators often use these price movements to make profits from the market fluctuations. On the other hand, changes in the market that are contrary to the investment decisions of a trader can often result in a loss of value of the investments.

Gambling at a Casino

Gambling is the process of betting on any table or a machine at a casino, where the result is purely based on chance or luck. It is a well-known fact that casinos have a high house edge that tilts the odds in their favor, which is why casinos often win in the long run. Regardless, lucky gamblers do make it big at a casino, where the winnings can reach up to seven, eight, or even up to nine-figure payouts.

Finisar Corporation (NASDAQ:FNSR) updated financial results for its third quarter of fiscal 2012 ended January 29, 2012. Operating Statement key points for the third quarter of fiscal 2012 are as under:
Revenues rose up to $243.0 million, up $1.5 million, or 0.6%,versus $241.5 million in the preceding quarter, driven by growth in sales of datacom products, partially offset by lower telecom product sales.
As compared to the previous quarter, the sale of products for datacom applications surged, by $5.1 million, or 4.0%, and the sale of products for telecom applications plunged by $3.7 million, or (3.3)%.
Gross margin was comparatively unmoved from the previous quarter at 29.3% on a GAAP basis and 31.8% on a non-GAAP basis.
GAAP operating income rose up $2.5 million to $11.3 million, or 4.7% of revenues, versus to $8.8 million, or 3.7% of revenues in the preceding quarter.

Finisar Corporation (NASDAQ:FNSR) witnessed volume of 6.42 million shares during last trade however it holds an average trading capacity of 2.38 million shares. FNSR shares opened at $21.79 reached intraday low of $20.25 and went -6.88% down to close at $20.29.

FNSR shares price distanced by -8.59% from 20 days average, +2.94% from SMA50 and +7.73% from SMA200. Similarly, the shares performance calculated for a week provided negative result of -8.31%, 1.81% for a month and Year-to-Date performance was 21.13%.

The company has an Enterprise Value of $1.66 billion where in most recent quarter it had a total cash in hand amounted to $228.04 million with a 8.03 book value per share. The beta value of 2.77 signifies to the movement of price with the market condition. The percentage of holdings by the insider in FNSR is 1.68%.

Its past twelve months increase in return from assets was 6.24%, return on equity remained 8.88% and return on investments reached 7.68%. The net profit margin in last 12 months grew up to 5.31% and in most recent quarter debt to equity of 0.06 giving a view of company’s no reliance on taking loans.

The Company in past 12 months achieved Gross Profit of $312.27 million where the year to year quarterly revenue growth was 0.23% and Net Income Available to Shareholders reached to $51.53 million with the diluted EPS of 0.56.

Oracle Corporation (NASDAQ:ORCL) witnessed volume of 30.30 million shares during last trade however it holds an average trading capacity of 44.55 million shares. ORCL shares opened at $27.23 reached intraday low of $26.78 and went -3.14% down to close at $26.97.

ORCL shares price distanced by +0.19% from 20 days average, -9.91% from SMA50 and -14.56% from SMA200. Similarly, the shares performance calculated for a week provided positive result of 1.20%, -6.61% for a month and Year-to-Date performance was -13.39%.

The company has an Enterprise Value of $123.69 billion where in most recent quarter it had a total cash in hand amounted to $28.85 billion with a 7.85 book value per share. The beta value of 1.14 signifies to the movement of price with the market condition. The percentage of holdings by the insider in ORCL is 21.91%.

Its past twelve months increase in return from assets was 12.65%, return on equity remained 24.22% and return on investments reached 16.22%. The net profit margin in last 12 months grew up to 23.99% and in most recent quarter debt to equity of 0.40 giving a view of company’s reliance on taking loans.

The Company in past 12 months achieved Gross Profit of $27.22 billion where the year to year quarterly revenue growth was 13.40% and Net Income Available to Shareholders reached to $8.55 billion with the diluted EPS of 1.67.

NVIDIA Corporation (NASDAQ:NVDA) witnessed volume of 15.05 million shares during last trade however it holds an average trading capacity of 23.16 million shares. NVDA shares opened at $13.38 reached intraday low of $13.07 and went +2.69% up to close at $13.36.

NVDA shares price distanced by +2.70% from 20 days average, -6.12% from SMA50 and -23.76% from SMA200. Similarly, the shares performance calculated for a week provided positive result of 11.89%, -3.40% for a month and Year-to-Date performance was -13.25%.

The company has an Enterprise Value of $5.37 billion where in most recent quarter it had a total cash in hand amounted to $2.47 billion with a 6.14 book value per share. The beta value of 1.59 signifies to the movement of price with the market condition. The percentage of holdings by the insider in NVDA is 0.30%.

Its past twelve months increase in return from assets was 12.64%, return on equity remained 16.85% and return on investments reached 15.95%. The net profit margin in last 12 months grew up to 14.65% and in most recent quarter debt to equity of 0.01 giving a view of company’s reliance on taking loans.

The Company in past 12 months achieved Gross Profit of $1.41 billion where the year to year quarterly revenue growth was 25.31% and Net Income Available to Shareholders reached to $543.30 million with the diluted EPS of 0.90.

Oracle Corporation (NASDAQ:ORCL) witnessed volume of 78.45 million shares during last trade however it holds an average trading capacity of 40.12 million shares. ORCL shares opened at $26.46 reached intraday low of $24.74 and went -8.30% up to close at $25.19.

ORCL shares price distanced by -14.07% from 20 days average, -18.83% from SMA50 and -20.49% from SMA200. Similarly, the shares performance calculated for a week provided negative result of -9.06%, -21.48% for a month and Year-to-Date performance was -19.11%.

The company has an Enterprise Value of $126.22 billion where in most recent quarter it had a total cash in hand amounted to $28.85 billion with a 7.85 book value per share. The beta value of 1.13 signifies to the movement of price with the market condition. The percentage of holdings by the insider in ORCL is 21.91%.

Its past twelve months increase in return from assets was 12.65%, return on equity remained 24.22% and return on investments reached 16.22%. The net profit margin in last 12 months grew up to 23.99% and in most recent quarter debt to equity of 0.40 giving a view of company’s reliance on taking loans.

The Company in past 12 months achieved Gross Profit of $27.22 billion where the year to year quarterly revenue growth was 13.40% and Net Income Available to Shareholders reached to $8.55 billion with the diluted EPS of 1.67.