Is the stock market a casino? The truth


Between the selected stock market highs which you can see in the chart above, there were in many other highs, frequently taking place several days in a row.

Long-term interest rates have never been this low in living memory nor has there ever been as much money in circulation as there is today. That explains the rise.

How long can the stock market keep rising?

Warren Buffett’s favorite indictor looks at the combined market capitalization of all publicly traded securities divided by the quarterly gross domestic product. It is a variation of the price/earnings ratio of individual securities.

This indicator stands at 200% now, indicating that a correction is coming. It does not say when. Monday Morning members see corrections as bargain buying opportunities.

We all know individuals who claim that the stock market is like a casino. When the inevitable correction does come, they will say, “See? I told so”.

The odds in favour of the casino are small. Casinos do want gamblers to win frequently enough to keep coming back. But at the end of the day, the casino always wins because they make many bets. Hundreds of thousands of times every day!

Gamblers frequently have a lucky break and make a big buck. But if they continue betting long enough, they will lose it all, guaranteed.

Investing in the stock market is the opposite. The longer investors stay in the market, the more they will make.

The table below shows the positive returns percentages of the US market since 1926.

Period of time

Positive returns

1 year


5 years


10 years


20 years


Except for owning your own business, other than stocks, you cannot find any other investment which actually produces anything of value. All other investments depend on the “greater fool theory” meaning that the buyers hope that down the road, someone comes along and takes it off their hands at a higher price.

Stating as we frequently do, historically, over the long term, properly selected US market index exchange-traded funds, held in tax-advantaged accounts, in an appropriate asset allocation, have been the investor’s best way for growing savings and are likely to remain so for many years.

Maintaining your asset allocation will get you buying when markets drop and taking profits when markets rise.

With the habits of Monday morning members, luck hardly matters.

Good luck!


We have designed the Monday Morning Millionaire Program to offer abstracted investment education. Over the last two decades, the program has outperformed over 90% of portfolios, including professionally managed ones.

The program does not provide any investment advice or endorsements.

Members can read our posts in less than five minutes. Following and studying the links embedded in these posts would take longer. How members manage a post depends on their level of interest and investing knowledge.

Dr. Milan Somborac

The Monday Morning Millionaire Program supports do-it-yourself (DIY) investors which I have been for over 50 years. About my team and me