My mom’s stock portfolio cratered twice, in 2000 and again in 2008.
I was a precocious teenager and told her: “You shouldn’t invest in the stock market, it’s just gambling.”
1 in 4 survey respondents think the odds of making money in the stock market are the same as the odds of making money from gambling (Magnify Money).
Fast forward years later, still precocious, I roll my eyes when others make this claim.
The stock market is no different from gambling


I’ve come to realize the misdirection of this point of view. It’s a distraction from the truer statement: “I don’t know the game I’m playing.”
There’s a million ways to make a million dollars. You can do real estate, invest in stocks, create a blog, or—heaven forbid, work a high paying job. These are different games in finance, with varying levels of risk.
I believe one way to assess risk is to differentiate between two types of games – fixed and fluid games. Understanding the nature of these games can help us wrestle with financial questions, like:
- Why is it that some people play poker or bet on sports but demonize the stock market?
- What’s the difference between investing and gambling?
- Should I buy GameStop stock?
Fixed Games
Of the many carnival games, I’ve never won the ring toss. Why do I still play, even when the odds are shit?
The ring toss game is simple, such that a child can understand it. I feel a sense of control because I’m the one directly tossing rings.
The rules of the game are fixed because you can see the entire “board,” so to speak.

Despite low probabilities of winning, the cost of entry is low. Plus, there’s entertainment value. The most important aspect of a fixed game is that it ends. When it’s over, it’s over.
The connection between performance and result is tangible; ring toss, ring lands. Ring toss, ring bounces.
Now, imagine that the game operator gave the participant next to you a giant ring, making it 10x easier for them to win.

There will be uproar, and possibly blood, on the carnival streets.
Features of fixed games
- Sense of individual control
- Short term: the results are immediate
- Understood odds in the beginning
- Simple rules
- Clear beginning and end to the games
- Low probability of winning
“Fixed” games is meant to be a double entendre – it’s well understood that the game is fixed, such that the house always wins. I consider the lottery, slot machines, and sports betting to be fixed games. And fixed games, in my mind, are gambles.
Fluid games
How many of us have bought a stock without much research?
Slowly raises hand from the back of the room
Yet, we’re surprised when the stock takes on a life of its own. It can go on to do interesting things. It can go to zero, it can multiply many times its value, and… we don’t know why.
To make matters more interesting, the game doesn’t end until you choose it to end. Do you decide to sell to capture the gain, or cut your losses?
Features of fluid games
- Open-ended: your choice when to stop playing
- Long term
- Multivariate, massively multiplayer games
- Lack of individual control
- No clear rules
Fluid games allow you to buy, hold, sell, and various other options. Real estate, cryptocurrencies, and day jobs are fluid games.
The stock market is just about the most fluid game there is, with countless ways to play.
One of the boring ways to play is to invest in the S&P 500, not look at it, and get an average return of ~10% over a long time.
Statistically, this is what’s supposed to work. But anxiety can outperform patience. Some people turn to day trading, options, or play penny stocks. These strategies involve higher risk, with the hope of higher returns.
It looks more like gambling when a fluid game is played like a fixed game.
If I hear a hot stock tip and dump thousands of dollars into a stock – which I’ve done – then I’m approaching the stock market like a gamble. I use a barbell approach, such that my gambles are limited, and that most of my other investments are long term, fluid bets.
Comparing the stock market to the either/or outcome of the Russian roulette is a misrepresentation of the nature of fluid games: there is actually a range of outcomes with different perceived probabilities (credit Vincent Do).
While those who think the stock market is a gamble aren’t correct, but they aren’t necessarily wrong to feel that way either.
Why people conflate investing with gambling
Fluid games are more abstract, and less tangible, than fixed games. Physical bond and stock certificates used to get sent out to stockholders, symbolizing partial ownership in a company. Now, those shares are numbers on a screen.
Combine that sense of disconnect with a news cycle that promotes sensationalist stock stories.
Elon tweets and the price of Dogecoin shoots up. Hedge funds attempt to drive stocks down, lest WallStreetBets has anything to say about it.
It doesn’t help that corporations have been caught cooking the books, Wall street executives have been caught for insider trading, and the perpetrators of the 2008 financial crisis get bailed out.
Abstracted information combined with the media cycle = suspicion.
Abstractions leaves room to think something’s going on underneath the surface, and at the same time makes us feel like things are out of control.
I believe these are contributors to Main Street’s fears. Namely, the fear of not knowing how you’re being manipulated.
When what you thought was a ring toss game is now won by bowling over bottles with a giant rubber ducky…you’re going to think it’s a gamble.
That’s why it’s understandable to see people play the lottery yet avoid the stock market.
They prefer the transparency of bad probabilities in fixed games compared to the obscure workings of fluid games.
To know the games we’re playing, it helps tremendously to understand the structure of that game.
Does the idea of the fixed vs fluid game help you? It’s still a rough idea that needs polish. I’d love to hear what you think—comment below or reply on my newsletter.