I’m not a betting man, at least not here in Massachusetts, which in just a few years will roll the dice as one of the newest states to gamble on legalized casinos. With visions of a bountiful jackpot for the state budget, the governor and legislature are going all in and betting that Bay Staters will morph into Bet Staters. Not me—I don’t like the odds. The house always win. No bets for me.
Yet I confess I do gamble. It’s not on cards or craps or the horses. No: my gambling happens in the stock market, which in many ways is the biggest collective bet of all. The stock market, stock markets actually, all around the world: New York, London, Tokyo, Moscow, Beijing, etc. According to the website seekingalpha.com, the total market value of all these stocks is $48 trillion, give or take a few trillion, on any given day. That’s $48,000,000,000,000: lots of zeros in that number.
24/7, all year round, some place, some where, traders buy and sell stocks in hundreds of thousands of businesses. They “bet” on behalf of institutional and individual customers, like you and I, that a stock will rise or fall in the hope is that their gamble will pay big money.
We all gamble on Wall Street. If you’ve got a 401K or a traditional pension you are a part of the bets placed everyday. If you’ve got a savings account at the local bank or an equity account at Fidelity or the like, you are playing the odds. If you own a house with a mortgage some institution somewhere which holds that paper may be reselling that debt to someone else and seeking to turn a buck in the process.
When markets go up it is all good. The economy hums. Stockholders and financial companies make money. Capitol is available for new business ventures, new equipment and new hires. And we little investors get to go along for the ride and celebrate as our nest egg increases. But when the markets tank, when the ticker plummets, when a bet is wrong and billions are lost, then we remember it is all finally a gamble. A bet.
Just ask Jamie Dimon or Mark Zuckeberg, two CEOs who in the past weeks learned how unpredictable markets are, impossible to call a sure bet. Dimon is CEO of JPMorgan Chase, the largest bank by deposits in the United States. His firm lost $2 billion dollars in risky derivative bets made out of the bank’s London office this month. CNNMoney reports the actual loss may be closer to $6 billion. Dimon has publically and profusely apologized for the loss, let go the errant trader, and reassured anyone who would listen that the bank has, “a fortress balance sheet” and has learned its lesson. At the same time JPMorgan Chase’s stock price dropped by up to 20 percent, meaning a loss for its shareholders of another $30 billion in value. Talk about a bad bet.
Then there’s Zuckeberg, founder of Facebook, the social media giant that last week rolled out the third largest initial public offering of stock ever. The good news? At $37 per share, Facebook raised more than $16 billion which made Zuckeberg and several other investors millionaires and even billionaires. The bad news? The stock, which was supposed to soar upwards according to “conventional wisdom” instead sunk by as much as 19 percent in the days after the IPO. Rolled the dice but all that came up was snake eyes.
When it comes to the gamble of the markets, all bets are off. For a bet is just that, a bet. It would not be a bet unless there was a real chance of losing. This rule applies in a backroom poker game and on the trading floor, in fact in all of life. There are finally few things which qualify as a sure thing or money in the bank. Not that we humans don’t try to find our ace in the hole.
We bet that wealth will make us happy and find out money cannot buy contentedness. It’s not for sale at any price. We seek the comfort of possessions and discover these things are but a fool’s gold, and eventually rust and fall apart. We double down on substances that numb us for awhile but in the morning leave us empty. We wager that busyness is the ticket to fulfillment and learn that a full calendar does not equal a full heart.
It’s natural to seek a sure bet, but perhaps we’re looking for a spiritual payoff in all the wrong places. Think: if you had to go “all in”, bet the house, your life on just one thing, on a power, a truth, a reality, who or what might that be? For folks of faith the answer is simple and two fold: God and love. God, the Higher Power, the Universe, the Force, which holds it all together. Love, the one human bet that always wins, always makes the world a better place, always makes this life worth it and filled with purpose, and always comes back to us, doubled, even tripled in value.
So these days the markets may be undependable and fickle. The dice of life are thrown and fall randomly. But there’s one bet that beats the house consistently. As Albert Einstein said, “God doesn't play dice with the world."
That’s how I’m betting. How about you?