Episode Overview

Theme:
This episode of The Stacking Benjamins Show—titled “Are You Investing or Just Placing Bets?”—dives into the sometimes-blurry line between investing and gambling, especially in today’s environment of speculative financial products, “prediction markets,” and aggressive trading behavior. Hosts Joe Saul-Sehy and OG use their signature light-hearted style to help everyday listeners understand risk, probability, long-term investing versus speculation, and how to stay grounded with money decisions amidst the current hype.

Key Discussion Points & Insights

1. Speculative Behavior Is Surging

• Source: Wall Street Journal column by Jason Zweig
• Financial markets are seeing a huge uptick in aggressive investing and speculation.
• Bets are being placed everywhere: prediction markets, leveraged ETFs on trendy themes, niche country ETFs, “betting” apps, and more.

[10:33] Joe:
“Financial markets work best when everyone knows the rules and we can generally trust other people to follow them. That doesn’t mean we know what’s about to happen, but we do like to tell ourselves it means we understand what is happening... That’s why investors hate uncertainty—but uncertainty isn’t a rarity in markets, it’s the norm.”

[11:57] OG:
“As chatGPT would say, volatility or uncertainty is a feature, not a bug. When it comes to investing.”

2. The Difference Between Betting and Investing

• Investing: Based on research, diversification, and probability over time.
• Betting: Speculation, short-term trading, leveraging, or gut feelings.
• Even so, the hosts clarify that all investing contains at least a small element of a "bet" on the future—it's the type and degree of risk that matters.

[19:34] OG:
“A 2x levered ETF on rare earth metals the day before, the day after this press conference… That’s a bet. And you may win or you may lose. But don’t confuse that for investing.”

[21:39] Joe:
“Even when we look at the S&P500 over a long time… I am betting that the instrument that I’m using is either diversified enough… But an investment in a single economy is still much more of a bet than an investment in the total stock market index.”

3. Speculation Is Booming on All Fronts

• Platforms like Kalshee and Poly Markets handle over a billion dollars a week in “trading”—not investing, just short-term bets.
• Lines between gambling (like on DraftKings) and short-term “betting” on financial markets are becoming razor-thin.

[17:36] OG:
“Well, none of that’s investing at all.”
[17:47] Joe:
“This isn’t even ‘investing’… a billion dollars a week.”

4. Probability & Time – The Long Game vs. Short Game

• Stock market “bets” get safer the longer you go.
  • Daily: 54% chance S&P500 is positive
  • 1 Month: 64%
  • 1 Year: 79%
  • 5 Years: 93%
  • 10 Years: 97%
  • 20 Years: 100% (since 1950)
• True investing relies on compounding over time and resisting the emotional whiplash of short-term volatility.

[31:09] Joe:
“…if you leave it [money] in the stock market for a month, you now have a 64% chance… for a year, 79%… over ten years, the bet goes to 97%… There was never a 20 year time frame… where you didn’t come out ahead.”

[32:58] OG:
“The benefit of investing is the compounding that happens over long periods of time… it’s the stacking and compounding of it over time.”

5. Investing in Businesses vs Stocks – Risk and Reward

• Starting your own business? Odds are less favorable than broad stock investing.
  • 70% of businesses survive 2 years, but only 50% make it to year 5.
  • Survival beyond 5 years improves odds of continuing, but still not as good as “buy and hold” investing for the long haul.

[37:00] Joe:
“There is this clear delineation… there’s a much better chance that you’re going to lose that [business] bet. If you win, you can win big… but in the stock market we have to spend zero time working inside that business.”

6. “Tricks” That Don’t Improve Your Odds

• Dollar Cost Averaging: Doesn’t increase odds of success; investing as soon as you can statistically works out better ([41:01]).
• Options and Stop-Losses: Using options might “cap” the downside, but statistically lose money over time. Stop-losses can trigger at inopportune times, causing investors to miss rebounds.
• True success comes from:
  • Diversification
  • Keeping costs low
  • Sensible risk exposures
  • Not trying to outsmart or “game” the system

[41:08] Joe:
“I think the lesson there, OG, is just don’t hold on to cash waiting for a better day. Do it as soon as you can.”

[42:31] Joe:
“Options and stop losses I think are ways that you can get rid of the worst case scenario. But you also create a lot of worst case scenarios that would have never happened had you just decided I’m going to stay in this for 20 years.”

7. Memorable Stories & Quotes

• Tony Robbins (via TikTok segment) on his worst investment:

"I took $10,000, which at that time was a huge amount of money for me, I poured it all in this stupid speculation and sure enough, it went up ... then it went through the floor and I lost all of it. And that’s what told me, you don’t speculate. You learn to become an intelligent investor."
[29:43]

• OG on compounding:

"That’s the power of compounding. It’s the back end number… you can’t even fathom how much money that really is…"
[36:00]

• Joe on speculation's emotional appeal:

“The betting escalates the longer the stock market goes up because we start feeling more and more we… we feel more and more confident over time.”
[15:34]

Key Segment Timestamps

• [10:33] — Main headline: Uncertainty in markets & WSJ/Jason Zweig’s column
• [15:34] — The lure of speculative bets when markets rise
• [16:52] — The billion-dollar boom in “betting” prediction markets
• [19:34] — Delineating investing vs. betting; leverage examples
• [21:39] — The spectrum of 'bets' in financial markets
• [29:43] — Tony Robbins' worst speculation and lesson learned (TikTok minute)
• [31:09] — Breakdown of historical market odds and compounding
• [37:00] — Comparing business ownership to market investing (probabilities and time)
• [39:57] — Strategies like dollar cost averaging, options, and stop-losses: Do they help?
• [44:38] — 5 Key Probabilities for Investment Success

Panel’s 5 Key Probabilities for Investment Success

(from [43:57])

1. Stocks are likely to beat cash over most 20-year horizons.
2. Owning the market is likely to outperform trying to be clever.
3. Diversification is likely to deliver better outcomes than concentration.
4. Holding sensible exposures to well-researched risk factors pays.
5. Lower costs almost always deliver higher returns (when investments are otherwise the same).

Memorable Quotes

• OG: “Volatility or uncertainty is a feature, not a bug, when it comes to investing.” [11:57]
• Joe: “If you’re saying I need to be diversified… that’s investing. But speculating on what happens tomorrow in Denmark? That’s a bet.” [19:34]
• Tony Robbins: “…lost all of it. That’s what told me, you don’t speculate. You learn to become an intelligent investor.” [29:43]
• OG: “The first $1,000 is harder than the second $1,000… that’s the power of compounding.” [37:00]

Conclusion & Takeaways

• Think in Probabilities – Evaluate every financial move on the likelihood and magnitude of outcomes, not on emotion or hype.
• Time is Your Friend – The longer your time horizon in stocks, the higher your odds of coming out ahead.
• Speculate Sparingly – Keep any “fun” or speculative bets totally separate from long-term investments.
• Don’t Overengineer – Simplicity, diversification, and cost control matter more than complicated strategies or “hot tips.”
• Compounding Wins – The magic of investing comes from growth over decades, not overnight windfalls.

[End-of-Episode Summing Up – [56:17] Doug:]

“Take some advice from our headline: betting. At least think about the odds that you’ll win with your investment. That process alone would change how you think about your money.”

This episode is a big-picture, friendly but wise reminder: If you want to stack Benjamins, don’t confuse gambling for investing, and trust the math—especially time and compounding—over hype or “hot” plays.