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Value Investing in Betting

By: Rich Allen

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Most Americans have heard the name Warren Buffett. He is steadily one of the two wealthiest people in the world, and his wealth is 100% self made. He made his money by investing in companies with stock prices temporarily depressed below instrnsic value; a method called Value Investing.

Value investing is funny. When the theory is explained, nine out of ten times, an investor understands the concept and often has an "aha" moment as it is taught. Of course… buying a stock in a boring industry with concrete earnings and equity is a better option than buying an overvalued stock whose company is always on the cover of Businessweek and The Wall St. Journal. Its human nature to value too highly what is exciting and sexy and undervalue what is boring but steady. The past has proven that boring but steady stocks considerably outperform their thrilling and glorified counterparts. So why has this easy opportunity to make money in the stock market persisted?

Investors who understand the concept of value investing are often not disciplined enough to create in a boring but steady opportunity when the actual opportunity comes about. "This time is different" they think. While they understand that value investing may win more often than not, they can't bring themselves to buy an actual boring stock when an exciting and quickly advancing one is staring them in the face.

Betting isn't much different. Want to know a quick way to make money in betting? Bet on heavy underdogs. In an article available in the Journal of Economics and Finance, Andrew Weinbech and Rodney Paul, found that betting heavy underdogs in NCAA Basketball would time and again yield a win percentage to account for a 5% Vig. In traditional betting lines (bet $110 to win $100), you need to win 52.7% of your bets to break even. Weinbech and Paul found that merely betting heavy underdogs won at greater than 54%.

So why does this chance exist? People love betting on the hot team as much as they love investing in the hot stock. If a team is featured on the cover of the top sports magazines every week bettors are less likely to notice if that team is favored by 20 pts. when they should be favored by 16. If the team is leading by 25 points with 5 minutes left in the 2nd half and their reserves lose 7 points of the lead in the closing minutes, it will hardly make news. All that will be reported is that "X Team wins again big! They are unstoppable." They may be unstoppable, but they may not be profitable if the lines get too big, and Paul and Weinbech proved that big favorites are hardly ever profitable.

The most significant thing you can have in betting is a method that works. Make sure you find a gainful system and stick with it at all times. Yes, you can win long term betting… If you have dicipline.

Article Source: http://depositarticles.com/

My name is Rich Allen, owner of the Sports Betting Professor website. The Average Guy, Can Learn The Secrets Of My Sports Betting System And Propel Yourself To Unthinkable Winnings For Life! Watch my video to learn more.

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