Win the lottery: Buy the house, not a ticket
By Tim McArthur - November 6, 2012
Buying lottery tickets is certainly no sure way to get rich. As the recent Motley Fool article ‘A lottery you always win’ explains, while the odds are generally stacked against you in games of chance, the beauty of the stock market is that with diligence and hard work you can buy shares when the odds are in your favour.
As Fools, we can choose to invest where our chance of success is positively skewed but there will always be members of the public who prefer the allure of the jackpot. In fact, there is such a large proportion of society who regularly has a bet (you’ve got to be in it to win it!) that the gaming sector is generally viewed as defensive.
Leaving the get rich quick bets to others doesn’t mean we have to miss out completely. After all, the profitability of many gaming companies is very enticing given they essentially only offer products where ultimately the ‘house wins’.
If investing in gaming businesses is the kind of share market bet you’d like to make then consider these companies for further research.
Tatts Group (ASX: TTS) and Tabcorp Holdings (ASX: TAH) both offer wagering and sports betting with licenses in most Australian states and territories. Tatts Group is also a major provider of lotteries.
In the small-cap space, Jumbo Interactive (ASX: JIN) has been a stellar performer this year with its exposure to the expanding trend towards purchasing lottery tickets online.
Casino owner and operator Crown Ltd (ASX: CWN), which is controlled by billionaire James Packer, owns high quality venues including Crown Melbourne. It is also looking to expand into the Sydney market with a strategic stake in fellow casino business Echo Entertainment (ASX: EGP).
While investing in stocks can never be a sure thing, buying high quality businesses at reasonable prices is much more likely to provide you with a profit than buying a lottery ticket.
- Fairfax writes down its assets by $2.8 billion
- Is Nine Entertainment broken?
- Tough ad market set to continue for Southern Cross
- Is Fairfax Media a buy?
- Should you buy SCA, Woolworths’ property fund?
Motley Fool contributor Tim McArthur doesn’t own shares in any company mentioned. The Motley Fool’s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
OUR #1 DIVIDEND PICK FOR 2016...
Forget BHP and Woolworths. This "dirt cheap" company is growing like gangbusters, and trading on a 5.6% dividend yield, FULLY FRANKED (8% gross). With interest rates set to stay at these low levels for years to come, for hungry investors, including SMSFs, this ASX company could be the "holy grail" of dividend plays for 2016.
Buying lottery tickets is certainly no sure way to get rich. As the recent Motley Fool article ?A lottery you always win? explains, while the odds are generally stacked against you in games of chance, the beauty of the stock market is that with diligence and hard work you can buy shares when the odds are in your favour.
As Fools, we can choose to invest where our chance of success is positively skewed but there will always be members of the public who prefer the allure of the jackpot. In fact, there is such a large proportion of…