Betting is such a personal thing. It’s like picking out a pair of jeans or finding the right Kevin Bacon movie on Netflix. Each selection, each team, each point spread, has to feel just right. In may ways, investing is a lot easier because we use, or should use, a few basic investing principles to help determine each stock purchase. I’m wondering if using a few basic investing principles can help guide my betting and there’s no better place to start than this weekend’s NFL playoffs and college basketball games. So here goes.
Invest In Companies (and QB’s) With a Distinct Competitive Advantage
Amazon delivers everything in the world you can possibly imagine. That’s a pretty distinct competitive advantage. Microsoft has office tools still used by a majority of corporate America and Azure, one the world’s largest, cloud-based computing platforms. Chipotle has the freshest ingredients used in tacos and burritos. Disney has Baby Yoda. You get the idea. Every stock you invest in should have a distinct competitive advantage from its peers.
Similarly, every NFL team you wager on should have a distinct competitive advantage. In this round, there are a lot of small advantages but the truly defining ones are pretty simple: Aaron Rodgers and Patrick Mahomes. Yes, Josh Allen made the leap. Sure, Lamar Jackson is athletic as hell. And yes, Brees and Brady have more experience than anyone still playing. But no one dominates the game quite like Rodgers and Mahomes did this year. So if you’re looking to capitalize on that distinct, competitive advantage, consider parlaying the Packers and the Chiefs to win on the moneyline. You have to pay a premium to make this bet, risking $171 to win $100, and need both teams to win outright to cash. But if you believe, as I do, that these two quarterbacks provide the only real competitive advantage this weekend, you make this bet confident that these two guys will get their teams not just to the next round but to the Super Bowl. Note: Parlaying the Chiefs and Packers to make it to the Super Bowl is +312. Just sayin’.
Sell a Stock When The Fundamentals Change
Blockbuster was an amazing company until Netflix arrived. General Electric was a great company until no one could figure out what they did well. The most blaring thing that’s changed amongst NFL quarterbacks is Drew Brees’ arm. His spaghetti-armed throws look like that of an 8th grader that’s spending way too much time doing something else with his right hand that is proven to weaken arm strength over time. Yes, the Saints are home. And yes, they’re playing another aging QB. It’s just hard to invest your money in Brees’ arm and a bunch of trick plays. Note: Michael Thomas looked better last week but he hasn’t looked like Michael Thomas all season.
Beware Hi-Risers That Feel Too Good To Be True
Tesla. Snowflake. Bitcoin. Sure these stocks and blockchains employ ground breaking technologies that disrupted aging markets but do they really deserve such rich valuations? This principle seems most apt for the newly formed Brooklyn Nets who are now favorites to win the East (+140) and co-favorites (+300), along with the Lakers, to win the title. Aren’t we jumping the gun a bit? There’s never been three players with this high of a usage rate on the same team. NBA games are still played with one basketball, right? Additionally, there’s never been a team with three ego’s this large in the same locker room. I wonder if the Nets are going to expand the size of the door leading to the locker room, or extend the ceiling another 10 feet, to make room for those huge heads to fit. At this point, I’d much rather take the Bucks, 76ers or Celtics to win the East. That ship in Brooklyn is going to sink with all that baggage on board.
Don’t Be Afraid To Add To Your Winners
This isn’t related to this weekend’s NFL slate but it’s worth noting that oddsmakers have been put in the unenviable position of having to set lines for teams playing the same opponent within a few days of each other because of COVID scheduling. For example, Syracuse and Pitt played on Jan 6th at Syracuse! and Pitt won by 3. At Syracuse! Today, Syracuse and Pitt played again, at Pitt, and, for some reason, oddsmakers made Syracuse a 4 point favorite? Why? The revenge factor? Change in altitude? Is there altitude in Pittsburgh? It made no sense. Note: Pitt won today by 20, 96-76. There are a few other examples this weekend in college and pro basketball where the lines don’t make sense based on the final score of the same two teams playing in recent games. I’ve bet on a number of those games today so if you’re interested, click on the sports tab on the homepage to see those plays.
I’m fascinated by investing, gambling psychology and where they all collide. Betting every day on sports is hard work. And most days it feels pointless. Why keep betting if the end result is just another day of betting? At some point, there should be an end to this race. More on that later. Right now my winning percentage is 58.33%, enough to be profitable but not enough to justify putting a whole lot of time or effort into analyzing my selection process. I do believe that by picking long-term stocks, and placing long-term bets on season win totals and other futures, there is a profit to be made. Just don’t tell my wife I still believe that.
