Chih-Yang,

This is not a chinese trait. Over the world there are no short of gamblers, depending on how you view it. We are born natural investor, each one of us. Everything we do or our parents planned for us during our infant stage is an investment.

It all boils down to the mental frame of each individual. For the poor, the word “Hope” means a great deal. Passing time gambling (such as a game of majhong) or investing is okay. It actually improves social networking and foster better relationship with neighbours and the likes. However, if an indivudal cannot resist the temptation, then it became an addict.

You can argue that the government can educate the general public (particularly those that you cited) and hope they can invest wisely and within their means. And you may even think, ya, I can become a savvy investor like Buffet or Soros too. But hey, honestly, do you think that really help? And what has that got to do with the government? You think without the two IR approved, the gambling issues will be lessen? Gaming takes in many forms. It is part and parcel of life. Let it take its natural course. It can’t be taught but you can prevent by setting up clinics that treat gambling addicts and hope it will help.

This is addiction issue and it is not just restricted to your main theme of your article. It could be those caffeine or smoking or alcohol or food that affects the mind frame of a person. Ultimately, it is that individual’s determination and will to resist temptation. The more you suppress the more rebellious behavior will surface. Get the drift?

Call a spade a spade… A friend, a former prison offier related to me his observation in prisons. Most of those who gambled inprisons, yes; in prisons, were chinese. they could bet on anything and gamble on any topics… bet could be cigarettes, foods or even cash payment could be paid through friends outside prisons…

they could game for weather, e.g. is it going to rain today; which prison officer will be on duty; whether certain prisoners will scream for help when he receives the strokes…

Chinese are gamblers..

As a mathematically trained person, I cannot disagree with the agreement from investment over gambling. However, have anyone tried to dress up in T-shirt, shorts and with slippers tried to go into an investment firm or bank and say that you want to invest $50 per month? Try doing that and let us know the result. The basic questions are “Is investment truly accessible to the common man?” and “Is the administrative fee too high for small investors?”. And we shall let each come to their own conclusion.

Cigarette manufacturers are required to put grotesque pictures on the cigarette boxes. Likewise, I feel Singapore Pools should put some figures / charts / numbers to discourage gamblers. E.g. the statistic Chih-Yang has written in this article. This may not necessarily discourage gamblers, but at least Singapore Pools has done its part.

Gambling is a non-economic activity that merely re-distributes wealth. Some will win, others will lose, and the croupiers / book-makers will always win. Singapore Pools is owned by Tote Board, a statutory board under the Ministry of Finance. Sometimes, I wonder how these money are being put to use.

Hau Keat

The biggest gambler are in china.Why are price so high now?
See their stock market.
Our IR is gear toward their patronage.

It was with interest to see the “Worrying Trend” table. What I learned from one small time gambling house owner in our neighbour countries, where illegal gambling places had been operating as a way fo life in these countries, is when the economy worsen; the number of gamblers increase correlation. He has been in this business for many years and it came from observations after so many years, just like any PhD trying to draw trend by observing their data trend. If I applied his “thesis”, the lower income must feel the economy is worsening and not robust or “more good years” as what the govt claimed.

In the name of preventing illegal bookies and gambling, we have created a legal bookie that gives an even more open and easy opportunity to gamble.
From, Big sweep to 4D, from Toto to scratch it. What else? Now anything can be gambled. motor racing, footballs etc………and soon, even 2 casinos soon.
We are a gambling state soon

Even the definition of investment in Singapore is skewed.

I have seen people who ‘invest’ in the stock market, when they are actually speculators trying to make a quick buck. They get burned and tell other people incorrectly not to invest their money.

Another stupid example is property. People always think property is an investment when it is just a necessity that satisfies the need for shelter. So what if your home is worth X amount of dollars. It is not an investment unless you sell it for a profit and move to a smaller apartment.

It is only an investment if it is not your primary home and you rent it out to generate income. But if it is your primary home and you intend to live their for the rest of your lives, it doesn’t matter if it is worth $1 or $1million.

To Currently Spared,

The options for investing in Singapore is very limited compared to the US. Here in the US, you have many mutual funds which allow you to automatically invest small amounts of money (even $50) a month. You have discount brokerage that cost a few dollars a trade. You have ETFs and index fund that charge significantly lower fees than unit trust found in Singapore. You can even buy stocks directly from companies using DRIPS by paying a small amount of money every month. For example Disney has a $100 per month stock purchase program that cuts away the middle man.

There are also an array of tax advantaged retirement accounts. 401Ks are like CPF because of the employer dollar for dollar match but the only difference is that you have a say over what kinds of funds/stocks you want to buy instead of earning a lousy fixed rate.

Looking at the kinds of things which Singaporeans call ‘investments’ like high load unit trusts and insurance makes me feel sad at the lack of options in Singapore.

Is gambling an evil? It seems some quarter think if it is legalised it is not evil. The illegal ones are evil. Is it because it is operated in a cloak and dagger manner? Clandestine?
I think both are morally and socially evil.
If it is a illegal operation it is known as syndicated organised crime. What about those organised by garment? It seems it is a legitimate business to provide employment as there are economic activities. It is accounted in the computation of GDP.I wonder how much does it contribute to the GDP.
Gambling, the legality depends on whether you are paying the “extortion money”, reminescing the old days

It is difficult & almost impossible NOT to invest in Singapore if you just to live even a normal life ! Put your money in banks with peanut interest is not going to lead you to anywhere and assure you a sure slow way to die looking at the high inflation rate in our country.

For those who think they are savvy, they buy stocks. For those who know nothing about investments, they buy 4D Toto Football bets, etc etc .(thanks to the OPERATOR for making that easlier by providing ample outlets for them to live on their “HOPE” (supermarkets, and even provision shop in heartland areas).

Whichever you chose, what is the successful rate ? I bet everyone know the answer !

my 2 cents worth

We are a nation of gamblers and debtors encouraged by our government. From 4D and Toto once a week to 3 times a week. Add football and scratch (I didn’t know about this) and the manner we can bet – quick pick or buy big or small. Can we blame the poor when even NTUC has a booth for them to bet? I see Malays and Indians in the queue too. What is happening to our nation?

Since the gahmen is so rich, there is no need to have singapore pools anymore. Why not close it down for good? Not only poor gambles, every classes of people gambled. The only way to stop gambling from becoming a past time hobby, ban it completely. I rather see uncles and aunties spend their hard earned money in stocks and investments than letting the POOLS earned their money. Even AMK HUB had a NTUC jackpot room near to the cathay cinema. Where kids and teenagers will be curious to what that room is? Especially right in the heartlands. The NTUC like the gahmen loves money and the more the merrier. Only stupid sinkies believe in 4D, TOTO, SWEEP, SOCCER BETS and jackpots wil throw their money into greedy NTUC/POOLS/Gahmen pockets.

FG

I don’t think we are a nation of gamblers. Want to bet? :)

of course we havent. But we are running in that direction rather quickly. Very soon we will be there and with the help of 2 Casinos. We all can be proud of the tag” little red dot of gamblers”. Now we can make a phone call to place a bet with the pools and online too. What did our gahmen do to help reduce our young to expose with gambling? NOTHING!

there is only 1 bet i’m interested, that is when old fark will also get stroke? any odds on that ? i will sell my HDB flat and bet on it.

I think Tan Hau Keat’s suggestion about cigarette pack-type labelling should be taken up. In fact, I think gambling is more dangerous, unhealthy and addictive than smoking.

Fever Guy ,
the biggest gambler in Singapore is our dear government who gamble billions of dollars into frailing banks and proclaim up to 30 years before ROI if it ever realized. In this scenario, the gambler is always the winner ! Why ? Because no one is responsible and accountable anyway. The oldman not there anymore then, the son disappear and his wife disappear and keep silent as usual. 30 years ? Every clown can says that too !

What is these billions compare to the citizens ? I think the government expect another few billions from casino to fill up their greed and lust for $$$$$$$$ !!

my experience is simply this – when you are up there, the stakes get bigger, and then bigger. very direct explanation for all the high stakes investment – you have money, you play, you get addicted and you give all kind of reasons to justify. solution, simple – start witha 50% haircut. then the socialist mentality will start to go away. the reserve collary of the communist thinking – what is mine belong to the state. Now it is moving in the direction that what is the state is mine. yes, we can easily be a nation of gamblers soon – monkey see top monkey do,

It took me a long time of self confession to quit!

Our Gahmen is really brilliant to have thought of ways of how to skim more monies from the peasants who will nonetheless spend their hard earned monies gambling at Genting, cruise ships, illegal lotteries, etc. Hence we have Singapore Pools.

Otherwise we can’t even have our dreams of becoming millionaires in our Toto draws. We should be thankful to our Gahmen for giving us an opportunity to have the Singapore Dream become a reality.

Bravo to PAP Government for allowing 2 casinos to be built. What more can we ask from our Government for giving us more opportunity to become rich.

[...] Discourse – TOC: A nation of gamblers – or investors? – Chia Ti Lik’s Blog: Campaign for All Singaporean SAF, Police [...]

Lim Chih-Yang,

I don’t think you can necessarily characterised “gambling” and “investment” as somehow a easily dichotomy. In the real world, both are in essence the same thing.

If you buy a house by mortgage for “investment” (i.e. in the hope that you will cash-in on rising value), you are in effect taking a pun just like you would in any bets. Buying a house using mortgage is a highly leverage formed of investment — you could potentially loose your deposit and still have a mortgage outstanding!

If you place a bet on 4D, you don’t win you loose only the amount you paid on the ticket that’s all. Now which is more risky? Buying a house or punting on a 4D ticket.

Ok, the example above is to illustrate a point rather than trying to argue which investment instrument is more risky. I am not saying what you have described in the blog is necessarily wrong, what I am saying is that life is too complex to say that one thing is gambling and another thing is investment.

As for educating Singaporean about money management, I don’t think there is a lack of education in Singapore. Contrast Singapore to say the UK where I am staying, I think Singaporean has just as much, if not more. access to money management information. Look at the book stores in Singapore there are more books sold on money management than another subject titles!

The problem I find in Singapore is that there are too many financial advisers who are themselves that are poorly educated. They don’t know understand the concept of risks. Many tend to have what I call textbook view of risks — i.e. saving account (“low risk”), equities (“high risk”) and buying house (“low risk”). Many don’t realise financial risk is personal not related to a financial instrument.

Let me give you another example to illustrates why this is a case. One the surface, it may seemed more like a good idea to say buy a life insurance than say buy the 4D. So you then tell Tan Ah Kow to spend money on life insurance rather than 4D.

Let’s say the life insurance will only (i.e. mature) when Tan Ah Kow reached 40 and he is only 20 and started paying in $4000 worth. But suddenly Tan Ah Kow at 25 hit an illness and unable to work had to stop paying into the life insurance and insurance had no critical illness or Ah Kow had illness not covered! What happens, Ah Kow now loses his insurance payout and his $4000+ invested. Is that not the same as gambling?

Let’s say you have magic and can see in the future, and Ah Kow was destined to hit a jackpot at 25, but since Ah Kow did not buy 4D it was a win never to be. So should Ah Kow had bought the Life Insurence or bet on the 4D? Which is risker or more likely to get a better return?

The answer is you will never know. Because you will never know whether investing in either instruments is the better bet since in both cases, you cannot see in the future? And which instrument is the risker (i.e. high chance of recovering money or make profit) applies to the average and not the individual.

And ultimately, all investment instruments carry risks even Government funded ones! When risk exists you it’s gambling!

Conclusion investment == gambling!

/// Now suppose this man was to spend that same amount in a portfolio of investment instruments comprising of 25% bonds and 75% equity. Investment firm Ibbotson Associates conducted a study of financial instruments from 1942 – 2001 and found that for a portfolio as mentioned, the average annual returns are 11.27% per annum. Now let’s assume a worst-case scenario — if this odd-job labourer was to invest $200 per month over the next 15 years with a conservative return of 5% per annum, what will the figures look like? This man is likely to get an estimated gross return of $51,788 at the end of year 15 with a total investment value of $36,000. In contrast, that same spending on 4D will win him only $7,200 over the same period. ///

Chih Yang,

You are a Financial Advisor. Pray, tell me, which bond can I buy for $200. Better still, to follow your advisor, I should put 25% in bonds and 75% in equity. Please let know which bond I can buy for $50.

Tan Ah Kow on June 23rd, 2008 8.51 pm

Good explanation. Investment is just a nice word to make sound professional & “acceptable form” of gambling.

Look at sub-prime and now the shift of attention to commodities which are being dealt by people mostly of high finance and traders taking bets and the cascading chaos that have been created.

@Tan Ah Kow

Very insightful.

What’s the issue here? I just want to add to my earlier comments. On one hand we want our government to give us more Rights and leeways and less control. We hope to shake that stigma of being called a nanny state. Then we turn around and want the government to regulate this, regulate that. control this, control that. What now? and What’s next? How contradicting can that be? Just today, I read in the Voices column in Today Online. Someone is asking whether the Government will regulate Tatoo shop (something to do with Lipo suction went wrong). It is just so ridiculous. Now we have another stigma added to it; schizo!!! No wonder we cannot get rid of the control freak stigma (sigh). This is exactly why the government continue to impose rules and regulations because it just proves them right that the maturity of its state citizens is not first world as yet. Snap out of it!

Aren’t we matured enough to differentiate? Are we matured enough to be responsible? Stop striving for perfect solution. There will be none. Come on! Let it take its natural course. Put it bluntly (no intention of insult), you can have the best financial advisor in the world and the best lecturer to teach you all sorts of trait, you cannot control how a person will apply all the traits that he/she had learned. If this person end up being an addict in gambling or investing (the professional term), you can only hope that clinical treatment will help. At the end of the day, it is that person’s will and determination to kick that habbit. I think you know what is “Suppress Syndrome Behavior” right? I am no advocate of gambling or investment. I view it as just ian ndividual’s choice.

Just to clarify, the earlier comment posted is not directed at Tan Ah Kow (just in case it get mis-construed). I fully support TAK’s view.

Tan Ah Kow, perhaps you would like to introduce a gambling entity that does not have odds in the house’s favour?

Gambling works (for the house) because of math. The more you gamble, the more you will lose.

Investment has risk, but it should not be a gamble. Perhaps you have been receiving the wrong investment advice?

@nhyone

For your good. In context of the article, anything excessive is addictive be it gaming or investment. The difference is the stakes involved. you call a $2 sweepstake gambling? 50cents to nvest in toto gambling? What is the avg amount to acquire a lot of blue chip stocks? Or you prefer to invest in penny stock? Are you not buying hope as well? You invest for the sake of fun?

Don’t kid yourself. Investmnet is not gambling? Really? What about those who use their assets as collateral to invest? What about those who invested in high risk options? What about those who investd in bullions? Ask Nick. Remember Barings? He will tell you whether investment = gambling.

Don’t go cry baby when there is a big stock market crash. What happen to those savvy financial advisor who advise their clients investment in sub-prime? They are no good? How about those financial investor in Enron? Heard of insider trading? Can your math really detect that? Really, there is no manipulation in the stock market? Think again. Forecast in itself is just a prediction. There are only two end results. Its either up or down. Have you ever found out what is your vested amount in your bank savings if the bank you deposited your hard earned money collapses? It never happen? Think again. So how do you equate the Bank loan as to loan shark? they are not the same? Technically, their difference is; one is made legal and regulated.

Compulsiveness = addict. Whether you like to term in Gamblers or Investor. It is still a personal choice. Edcuating the public can only warn them the risk and clinical help can only hope to cure the addiction. Still it is entirely up to that responsible individual.

Observer on June 25th, 2008 9.09 am

Good follow up. Keep it up. Investment or gambling. A matter of degree in the risk involved – on the limit of both upside & downside involved.

nhyone said:

Tan Ah Kow, perhaps you would like to introduce a gambling entity that does not have odds in the house’s favour?
Gambling works (for the house) because of math. The more you gamble, the more you will lose.

I must admit I don’t quite get what you mean by the question or the context in which the question was framed.

However, I am guessing what you are trying to point out to me that my illustration about odds of wining 4D, as a specific example of gambling, is stacked against the AVERAGE person. If that is what you mean, I say yes I fully agree with you!

However, what I was trying to say is that don’t assumed that odds against an AVERAGE person may not apply to an INDIVIDUAL person. In other words, an INDIVIDUAL may be destined to win the 4D, in which case the ODDS applies to an AVERAGE person is not the same when in comes down to the individual. The individual who is destined to win will have 100% sure win odd!

Of course, in reality, you or I as an individual will never in REAL LIFE know whether we are destined to win 4D or not.

So when you talk about Math, and ODDs it applies to the AVERAGE person not the INDIVIDUAL person. In this case, should the individual be deprived of the opportunity to punt on 4-D just because the odds against the average is bad?

Is it not down to the individual to decide whether or not to add 4-D or for that matter any form of “gambling” as one of their financial portfolio?

Hey, did you know that when you buy insurance, the ODDs of you recovering money that you invested in it is also stacked against you too? After all when you buy an insurance the insurance company will make it extremely hard for you to claim. Or did you know that insurance company often changes the terms of agreement to make it hard to claim too?

So if you want to outlaw gambling on the purely on basis of unfavourable ODDs than why not do the same as insurance?

Investment has risk, but it should not be a gamble. Perhaps you have been receiving the wrong investment advice?

Let’s not kid ourselves that gambling and investment are necessarily two different things. At the end of the day, what makes a financial instrument an act of gambling and another an investment is a matter of personal choice and aversion to risk!

Apologies.

The lower part of my previous comment should read:

Investment has risk, but it should not be a gamble. Perhaps you have been receiving the wrong investment advice?

Let’s not kid ourself that investment is not the same as gambling. Both are in essence the same thing. In both cases, what you are doing is to wage a stake in the hope of returns that is more than the stake. In investment you don’t use word like “stake” instead you used word like “principal” but in essence they mean the same thing. The risk, whether you call it gambling or investment is whether you get to loose only the stake or even more than the stake depending on the degree of leverage. For example, buying a house. The “stake” is the deposit you make on it. The potential return is the value that you capitalised when you sell it. If the potential value is less, you stand to potentially loose not only the “stake” but you also have to payback the mortgage too!

At some point, even if you as an individual puts money into some “safe” investment instrument, the money you invested will ultimately be use “gamble” in something else. Take you CPF, whilst you as individual may argue that your deposit is an “investment”, the government ultimately takes your money and then “gamble” on UBS and Citibank shares!

Let’s not kid ourselves that gambling and investment are necessarily two different things. At the end of the day, what makes a financial instrument an act of gambling and another an investment is a matter of personal choice and aversion to risk!

As for your question about me not getting the right advice, I am not sure what is the context behind your question. But for want of an answer, I often take advice from third parties with a pinched of salt, even from so-called experts and especially from the PAP Government.

Even if I were in agreement with a piece of advice, ultimately, if I choose to execute on the advice it is still incumbent upon me to know what I am getting myself into!

“…But wait, since the probability of him winning is only 0.01%, his winnings will be only $40…”

Actually, more accurately speaking, $40 should be his “expected” winnings, and not just his winnings. Allow me to point out why this distinction is important.

I believe the authour is confused between expected winnings VS actual winnings, or simply did not bother with the role that “expectation” plays here. And this is what led him to conclude the following:- “…if this odd-job labourer was to invest $200 per month over the next 15 years with a conservative return of 5% per annum, what will the figures look like? This man is likely to get an estimated gross return of $51,788 at the end of year 15 with a total investment value of $36,000. In contrast, that same spending on 4D will win him only $7,200 over the same period…”

Over a 15-year period, is it likely for someone (anyone) to hit the first prize? The answer is yes, but how likely is the question to which I have no answer for. Assuming that the payout remains constant at $400K (another one of the author’s flawed assumptions), this would dwarf the $51.8K that he would have potentially earn from 15 months of dilligent monthly “investing”.

Another flawed assumption is that each 4-digit number has an equal 0.01% of winning $400K. Conventional probability theory will say that this is so but historical data will show that certain numbers will have a higher probability while others will have lower probabilities, even on a 15-year horizon. We perhaps need to stretch the timeline to 10,000 years or more to achieve the theoretical 0.01% probability per number. So even if we start buying 4D from the day we are born till the day we die, we shouldn’t base our success chances on conventional probability theory.

Another problem with the above simplistic view is that the reward is not merely the first prize of $400K. You still have your 2nd prize, 3rd prize, consolation prizes and what-have-yous. I am not exactly sure how many prizes there are (as I am not aware of the actual mechanics of 4D), but my point here is that the payout is not simply 0.01% X $400K = $40. You have to take into account the other payouts.

I dont think people gamble because they dont know what investing is. They gamble because it can be potentially more rewarding than investing, as I have shown above. And let’s call a gambler, a gambler. A gambler is not just your odd job labourer, your ah beng/lian, your coffeeshop uncle/auntie nor your uneducated person.

I read an article that suggested Traders were more like gamblers (poker players), while Investors played more strategically, managing risk (like chess players). Others might find it interesting: http://www.helium.com/items/1090714-understanding-the-difference-between-investing-and-gambling

investing = taking calculated risks; acting on opportunities which odds are in your favour

gambling = … simply gambling; a leap of (blind) faith

[...] Discourse – TOC: A nation of gamblers – or investors? – Chia Ti Lik’s Blog: Campaign for All Singaporean SAF, Police Force – Sam’s thoughts: [...]

the way to evaluate a risky game is to imagine that you bet on all the scenarios, then get the winnings minus all the cost.

if you bet small $1 from 0000 to 9999, it will cost you $10K. You are guaranteed to win the top 3 prize ($3000, $2000 and $800).
Notice that your cost – winnings = $10 K – 5800 = $3200.

What it means is that for every $10k you wager you lose $3200: hence for every $1 you wager you lose 32c. That means Singapore pools wins 32c (in expectation)everytime someone makes a $1 bet. And that’s why lottery is called “poor man’s tax” and singaporepools is always one of the most profitable sme in singapore consistently.

Do note as well that just because something is random does not mean that the numbers will fall evenly in a short time – randomness does not mean that a lucky steak ( hence a lucky 4d number) does not appear. So looking at historical data and using it to predict its likihood is futile and baseless (except for the 4d book publisher). So we still have to use probalilistic expectation to decide if the game has positive expectation, and ignore shortrun lucky steaks.

But if you are poor and have not chance to change your life for the better, it makes all the sense to punt on 4D because someone has to be lucky, maybe its me. So lots of poor people takes a lousy bet and hope to get lucky ( they know the statistical mean is against them, but they are betting on the standard deviation or volatility)

Also, in the financial market it is often assumed that someone is a investor, or the smart money, if he makes money sofar. But it aint over till the fat lady sings. Just look at the Big investment bank traders for the last few years – they were making tons of money, and it isdifficult to argue that they are not strategic and risk managing “chess players” before the credit crunch. But one hot summer turned all of them into gambling poker players. hence in the financial market “lucky numbers” can last for quite a few years, sometimes a decade.

Lastly, if you compare track records of GIC, temasek or even our great leader, you have to take into account whether they are on a “lucky number” streak that is going to end.