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Fantasy Sports and The Stock Market

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Postby TEKTON » Sun Aug 13, 2006 6:41 pm

take a class in finance or cost analysis or do a pretend charette for a 6 month period and see how much you may have earned on a return. I had a class in college where we had to do a pretend 10 thousand dollar investment over 3 stocks. I did adobe, sony, and EA for a 5 month period( the new madden was released during that semester). Granted it earned $ but nothing substantial to justify wagering 10K on.
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Postby mikekim2121 » Sun Aug 13, 2006 7:21 pm

It is true there are some similarities such as buying low and selling high. Using your internet research skills may also help but I think that is where the similarities end.

I really don't think you should pursue the stock market unless you know what you are doing in that field. Performing well in fantasy baseball will NOT translate into success in the market.

I have invested in the stock market for 8 years and when you just use the buy low/sell high strategy, it will burn you. Unlike with most situations with star players at the low point of their season, there is no reason that stock prices will go up after they are low. That is because when investors set a price for stocks, its all about their predicted results and they do not care about what happened in the past.

Even trying your skills out in a fantasy stock market game will not be a good predictor of your future success. While studying at Penn State, we did a fantasy stock market game for a semester. In 3 months, I turned 500,000 into 1.7 million but I felt like it was more about me gambling rather than picking good stocks.

In conclusion, don't invest just because you are good at fantasy sports.
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Postby Matthias » Sun Aug 13, 2006 8:07 pm

swyck wrote:A major difference between fantasy sports and the market is that you dont actually have to beat any one. There is no Super Bowl where one team is champ and everybody else is a loser. This is not Texas Hold'em where one guy walks away with the pot. The fact is that in the market everybody can make money which is not the same as winning. Not everybody does, but that's a different thing


Agree with the rest of what you said, but it is a fundamental truth that every transaction be it a stock or option involves both a buyer and a seller. For every winner there has to be a loser. Markets won't clear otherwise.

Now... playoff races are heating up. :-)
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Postby Rin04 » Sun Aug 13, 2006 10:41 pm

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Postby RugbyD » Sun Aug 13, 2006 10:42 pm

the strongest similarity is managing a roto team and being a portfolio manager. you always have to address diversity measures and stay in line with various other portfolio test parameters. constant work in progress.
TennCare rocks!!!!
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Postby CheeseBeger » Sun Aug 13, 2006 11:31 pm

Hey stoner, you should put down the reefer before playing the stockmarket.
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Postby swyck » Mon Aug 14, 2006 12:15 pm

Matthias wrote:
swyck wrote:A major difference between fantasy sports and the market is that you dont actually have to beat any one. There is no Super Bowl where one team is champ and everybody else is a loser. This is not Texas Hold'em where one guy walks away with the pot. The fact is that in the market everybody can make money which is not the same as winning. Not everybody does, but that's a different thing


Agree with the rest of what you said, but it is a fundamental truth that every transaction be it a stock or option involves both a buyer and a seller. For every winner there has to be a loser. Markets won't clear otherwise.

Not true. :-B

For example:

You buy Primo Widgets (PWG) at $10.
It goes up to $15.
You decide get out of Widgets, maybe to take profits, maybe because you think its run is over, maybe it starts looking risky, or maybe baby just needs shoes. You sell it to me at $15.
Widgets then keeps going up to $20 where I sell.

Both of us made $5 a share so we both won. Isn't this great? B-)

Sure from some glasses half empty point of view, you lost an additional unrealized $5 by not holding on, but that's not a real loss. We both posted a profit.

So no there doesnt have to be both a winner and a loser to every transaction. In business deals both sides can win. In fact they should with any good deal. It doesnt always work that way, but this is not a zero sum game. The value of the market increases over the long run meaning there should be more winners then losers, and plenty to go around for everybody.

Buyer and seller <> winner and loser.
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Postby stoner420 » Mon Aug 14, 2006 1:05 pm

CheeseBeger wrote:Hey stoner, you should put down the reefer before playing the stockmarket.



wow. your heeeeelarious. that was great. i should respond with a crack about u laying off the mcdonalds but i think that im above that.
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Postby tianyi86 » Mon Aug 14, 2006 1:49 pm

swyck wrote:
Matthias wrote:
swyck wrote:A major difference between fantasy sports and the market is that you dont actually have to beat any one. There is no Super Bowl where one team is champ and everybody else is a loser. This is not Texas Hold'em where one guy walks away with the pot. The fact is that in the market everybody can make money which is not the same as winning. Not everybody does, but that's a different thing


Agree with the rest of what you said, but it is a fundamental truth that every transaction be it a stock or option involves both a buyer and a seller. For every winner there has to be a loser. Markets won't clear otherwise.

Not true. :-B

For example:

You buy Primo Widgets (PWG) at $10.
It goes up to $15.
You decide get out of Widgets, maybe to take profits, maybe because you think its run is over, maybe it starts looking risky, or maybe baby just needs shoes. You sell it to me at $15.
Widgets then keeps going up to $20 where I sell.

Both of us made $5 a share so we both won. Isn't this great? B-)

Sure from some glasses half empty point of view, you lost an additional unrealized $5 by not holding on, but that's not a real loss. We both posted a profit.

So no there doesnt have to be both a winner and a loser to every transaction. In business deals both sides can win. In fact they should with any good deal. It doesnt always work that way, but this is not a zero sum game. The value of the market increases over the long run meaning there should be more winners then losers, and plenty to go around for everybody.

Buyer and seller <> winner and loser.


Thats sorta true. If person A sells the stock at $15.00, the stock will go down bc the value of a stock decreases when someone sells the stock. The stock will only go up if theres more buyers (more bids at above the market price than bids below the market price) for the stock to break through a certain resistance point and reach $20.00.

In the stock market, there are too many actors to make a statement such as everyone can profit.

As for playing stocks, its a much riskier endeavor and require more financial assets. For each trade in stocks, there is generally a transaction cost of $0.01 or $0.02 x the number of shares of $6-8 per trade. This requires you to not simply make a profit, but to make a profit that offsets the transaction cost through the broker.

Furthermore, for non-penny stocks, most shares are fairly expensive (ranging between $10-$400), which requires you to have enough capital to start off. I dont think most fantasy sports player or 20 year olds have the money to do that.

Stocks also have much higher volatility and risk than fantasy. If you join a fantasy baseball league for $20 entry fee, $20 is the most you can lose. But if you sell short a stock with an account balance of 10k, the downside is infinite rather than the 10k you put in. And for high volatility stocks like GOOG, you need to be online checking hte stock between 9to4, or else you will lose money. So stock market is actually more time consuming.
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it depends

Postby OregonCruiser » Mon Aug 14, 2006 2:46 pm

upon your interest.....if you feel better researching stocks, then the stock market is a go....if you feel better researching stats, then fantasy leagues are the way to go........like both and want to learn a little while spending no money......try jockstocks.com...free and easy and a good learning tool....after registering, go to the Oasis posted at the bottom of each page....there will be instructions on playing all the different competitions there....jockstocks.com
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