I have a confession to make.
I gamble.
No, you won’t find me at the Singapore casinos. You will find me at my computer. Hunched over stocks.
Ah nah, that’s not gambling!
Really? Let me tell you why I’m scared.
My uncle used to go to the casino weekly. He’s dead now.
Another uncle was perhaps more reserved. He only went to the casino monthly. He’s divorced now.
This isn’t about washing dirty laundry in public. But yes, for me, gambling has a personal side to it. Knowing my family’s disposition towards such behavior, made me more frightened when I started noticing the constant checking of the stock prices.
It’s also why when the police first screened those advertisements showing the father who took his daughter’s piggy bank to finance his gambling, it felt a little too personal. I had to switch off the television.
That’s why I’m writing this.
I don’t mean to throw out the baby with the bathwater. But gambling is not a nice thing to live with. Yes, it has its advantages. It’s brought more options to Singapore’s tourists and citizens. It’s something you can do to blow off steam after a stressful period at work.
But there’s also a flip side. That’s what we want to look at today.
When I used to work in the social services, I remember how clients often shared their stories. After a while, you hear common threads in these stories. Familiar patterns that don’t seem to happen by chance. One red thread kept appearing.
Gambling. You hear of how it caused them to roll up high numbers of debt that made you go gaga hearing about it.
Often, these conversations took place in Chinese. My Chinese isn’t great. Sometimes, I needed to translate it slowly in my mind, and then add up these numbers in my head. There would be a significant lag between what they said, and my eventual reaction.
$三十万？
What’s 30 x $10,000? Quick! Mentally calculate!
My mouth drops.
That is more money than I will earn in one year, or even ten years. That money was gone in one night.
I know, it’s not something we want to talk about. It’s the thing we keep hidden beneath, like one of those inconvenient truths that ‘just’ happen.
But talking about it helps us to not only be more aware but also to be more cognisant of how it’s actually not that far away from home.
Gambling Destroys Families
For all the fun of a high stake at the roulette table, there’s an unfortunate flip side.
Death. Divorce. Destruction.
Gambling may sometimes seem like an individual’s problem. After all, it’s the individual who’s paying the price, and suffering the consequences when losses are incurred right?
Wrong. When the person gambling starts taking a financial toll on the family, it’s the family that suffers harm. It’s the family that suffers the loan sharks. Or the repossession of the home by bailors. Or the quarrels between family members. The true victims of gambling are the family members, and not the gambler who losses money at the casino.
As the Ministry of Social and Family Development replied in response to the parliamentary question about whether new safeguards around problem gambling needed to be considered,
every family that suffers harm because of problem gambling, is one case too many.
Every person that falls to gambling, is not a single individual. It’s the single domino that brings down the entire line.
Let’s Take It Back To You
What relevance does this bear to you? After all, you may not be gambling at a casino. But let’s think about it from an ‘investing’ point of view. After all, investing sounds intelligent.
When you think of investing, you think of people in suits and ties, walking down Marina Bay. You don’t think of old uncles sitting in front of the jackpot machines the entire day, pulling down the jackpot lever.
But there’s a difference between gambling and investing. It’s subtle.
Benjamin Graham, often known as the father of value investing, makes this distinction in his seminal book, “Security Analysis”. In fact, he spends an entire chapter distinguishing between ‘speculation’ and ‘investment’. Why? Is it that important?
He defines an investment operation as one
which upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.
But beyond that, he stresses that investment
must always consider the price as well as the quality of the security that can be justified on both qualitative and quantitative grounds.
Looking at the increasing number of investors running up the prices of various asset classes (with a loud ahem to cryptocurrencies), Graham’s words seem to bear even more relevance today. Are you speculating, or truly investing?
Graham makes this subtle yet important distinction about how the quality of the investment matters. Recently, the prices of NFTs have shot through the roof. Seeing people pay millions for jpegs does make you wonder,
Is a pixel on a screen really worth thousands?
There’s Another Distinction You Need To Know.
But Graham also observes that it’s not only the quality. But it’s the weight of expectation – whether it’s more heavily weighted on prospective developments, or past performance.
For investment, the future is essentially something to be guarded against rather than to be profited from.
Speculation …may always properly – and often soundly – derive its basis and its justification from prospective developments that differ from past performance (emphasis mine).
Are you gambling on an asset’s future, hoping that it will rise, or are you guarding against an asset’s possible loss? So often, we think of an asset’s upside, without guarding against its downside.
And yes, there’s the oft-cited risk-return graph. High risk, high return. Low risk, low return.
Who doesn’t like the heart racing feeling of having your chips all in, spinning round the roulette table?
My uncles played, and paid for that.
Conclusion
Dogecoin, anyone?
Read Also: Legal Or Not? Complete Guide To Proposed Changes To Gambling Laws In Singapore
When John isn’t writing, he’s busy lifting (light) weights. John is a writer that is excited about helping young adults to live healthy, passionate and purposeful lives at work. He writes at liveyoungandwell.com.
