It is often said that the Financial Sector has a lot in common with gambling at the most professional levels and that’s more than just a myth. Investments, especially in the private sector have a lot of similarities with gambling since nothing is sure and it’s all based on predictions and estimations.
Whoever made the first comparison between gambling and the financial sector was more than a visionary of its time, he or she had some really good foreseeing qualities because, especially in recent years, the financial sector started to look more and more similar with professional gambling. And this formulation doesn’t even start to cover it as the term of gambling is not used in a negative way towards casinos, not at all. Actually, if we were to look at the events that happened ten years ago, the big financial crisis in both the public sector and the private sector, things could’ve been much simpler if everything was as regulated and understandable such as the gambling industry is nowadays.
Friedrick von Hayek won the Nobel prize for economics in 1974 and, among a lot of other very applicable theories and demonstrations, one phrase stuck with everyone that dealt with the primary sector of economics and finance. Von Hayek said that, among the people involved in the financial sector, there is a concerning phenomenon known as ‘the pretence of knowledge. He is also the one that admitted to the fact that it is futile to try and transform economics and the financial sector into a science since most of what happens in this sector has more to do with gambling than a fixed and clear science. And these are not just conspiracy theories aimed at the financial sector in order to make it lose credibility or anything like that, it’s just a conclusion drawn after analyzing the actions taken in this service sector. He also promoted the idea that if you substitute all the pretentious finance-talk with betting jargon and you will see it even clearer: trading with stocks or any other form of it is not at all different than playing free slots no deposit win real money, in fact it is all subject to luck and gambling. Despite all the efforts made by the financial sector to contradict any kind of similarities or links between their practices and gambling, it really is the heart of the economic institutions and ideas.
Confidence, Bluff and Tipsters in Both Sectors
Yet another argument to sustain the similar practices in gambling and the financial sector is the one that, in order to be successful in economics and dealing with the service sector, you need the same set of qualities as with gambling. You surely identified some of them from movies such as The Wolf of Wall Street and include but do not resume to: cold blood with inclination towards risk, ability of taking split-second decisions, a good and disciplined memory. Guess what, that’s the exact description of a top poker or blackjack player. Bluff and confidence go hand in hand in the financial sector as you need both in order to be successful. First of all, you need to be confident enough to convince others in this sector to invest in your idea and put their money in your hands but at the same time, you need to be a great bluffer in order to make your competitors stay away.
Another thing that clearly links the financial sector with gambling are the professional tipsters that or traders that basically want you to allow them to bet or gamble with your money. They also charge you with a management fee and a percentage of any kind of profit you make. And when things go bad, you’re actually the only one that has to lose.