A couple of quick announcements before I begin today’s post.
1. My new book, Boundless, is now available for ordering: After a wonderful response during the pre-order phase, I finally have the book in my hands and am shipping it out quickly. If you’d like to get your copy, click here to order now. You can also enjoy lower prices on multiple-copy orders. Plus, I’m offering a special combo discount if you order Boundless along with my first book, The Sketchbook of Wisdom. Click here to order your set.
2. Relaunch of Value Investing Almanack: I have relaunched my premium newsletter, the Value Investing Almanack (VIA), which subscribers have called “…the best source in India on Value Investing, for both beginners and experts.” Click here to read more and subscribe to VIA at a special launch price (available only for the first 100 subscribers). Also, if you wish to check out the March 2025 VIA issue before deciding to rejoin, click here to download.
The Stock Market’s Casino Problem
Casinos have long known a simple truth: if you want people to gamble more, just add a subtle unpredictability. Just enough to keep people guessing. Make the lights flash. Add a few near-misses. Let them win once in a while so they feel like they’re on the edge of something big.
Slot machines, for example, are rigged not to steal your money outright, but to give you a series of small ups and downs. That emotional rollercoaster is what keeps people glued to their chairs for hours. The goal isn’t to empty your wallet in one go. It’s to drain you slowly, while making you feel like you’re still in control.
Even the layout of a casino is part of the game. They’re built like deliberate labyrinths. There are no clocks, no windows, and maze-like paths that are set up to disorient you. The goal is to trap you in a space that feels comfortable. You don’t notice time passing. And as you move around, something always catches your eye. You don’t plan to stay that long. But you do.
Now, the reason I’ve brought up casinos is that they remind me of today’s financial markets.
I am not trying to make a loose comparison here, because both casinos and modern financial markets are built on the same instinct: our tendency to chase reward under uncertainty, which is evolutionary. It’s wired into us from a time when we had to hunt and guess and react quickly to survive. That instinct is still inside us. And both casinos and financial markets have figured out how to turn it into a business.
Worse, the financial markets today play on that instinct more than ever. And they don’t do that subtly, but blatantly. Policymakers, central bankers, and financial institutions across the world seem to have figured out that if you want the markets to stay engaged, just keep things a little unpredictable.
One month there’s a rate hike. The next day, a “change in stance”. New tariffs are introduced, then increased, and then withdrawn. I mean, Mumbai’s weather during monsoons doesn’t change so frequently as those policy announcements. At least with the monsoon, you somehow know it’ll pour for a while and then go away. But with markets today, you wake up to sunshine and go to bed in a financial thunderstorm, all because someone hinted at something in a press conference halfway across the world.
While markets have always been volatile — that’s their nature — a lot of today’s volatility feels manufactured.
And just like in a casino, that volatility keeps people playing. The ups and downs create a game that’s hard to walk away from. When things are too calm, we get bored. When there’s too much noise, we get hooked. And that’s the trap.
Matt Levine, columnist at Bloomberg, captured some of this in his recent article titled At Least the Market Isn’t Boring. He wrote:
…it is worth recognizing that a lot of the modern economy is made up of entertainment. People do seem to enjoy literal sports gambling. “Sports are sports, and entertainment is sports, and politics is sports, and crypto is sports, and stocks are sports,” I wrote, not that long ago. Perhaps making the stock market more entertaining, for some definition of “entertaining,” is actually a sort of accomplishment? I don’t know? I don’t especially believe that, but one does want some sort of explanation for everything that’s going on. “The whole economy is a meme stock now, so enjoy the ride” feels like a grim but useful explanation.”
There’s a subtle but powerful insight here. Markets are starting to feel more like a show. There’s drama, emotions, taking sides, and sudden twists — or basically, everything that keeps people hooked to sports, news, or social media. Worse, a lot of people are showing up for the drama, not the discipline.
But the uncomfortable truth is that when the market becomes a source of entertainment, it stops being a vehicle for real wealth creation.
Investing isn’t supposed to excite you every day. In fact, the more exciting it feels, the more likely it is that you’re not actually investing but just speculating, with a fancier vocabulary.
The irony is that most people don’t even realise when this shift happens. They start with SIPs and long-term plans. Then they open a trading app. Then they join Telegram and WhatsApp groups. Then they see a reel of someone making ₹2 lakhs in a day selling Bank Nifty options. Slowly, the time horizon shrinks. What used to be a 10-year goal becomes a 10-day trade. What used to be a steady plan becomes a game of predictions.
The story doesn’t end here. Just consider how the financial services industry works. It doesn’t want you to invest in businesses anymore, but stocks or funds or asset classes or alternative investments now. Not just that, these products are diced into styles and sizes, like growth, value, momentum, mid-cap, small-cap, this ETF, that ETF…until we forget what we were investing in to begin with.
For someone who’s putting real, irreplaceable money into the market, most of these ‘labels’ are just noise. And because it all sounds so complicated, we hand over our decisions to brokers and advisors and wealth managers, a lot of whose wealth often comes more from ‘asset gathering‘ than from ‘asset management‘.
I don’t have a personal angst against traders, speculators, or the financial services industry. It’s their game to play. But I do worry that an entire generation of young investors is being trained to mistake speculation for investing, and to expect quick outcomes in a game that has always rewarded patience.
And this is what scares me most: even if markets rise in the long run, and history suggests they will, these ‘gamified’ investors might not benefit from that rise. Not because they chose the wrong stocks, but because they got knocked out early. They ran out of patience. Or capital. Or belief. They expected investing to feel like a rocket that escapes Earth’s gravity at 11.2 km per second. But real investing feels more like watching a tree grow at 0.0003048 km (12 inches) a year. It’s slow. It’s uneventful. And it’s mostly invisible…until it’s not.
The sad part is, a lot of these investors will leave with the conclusion that the market is a scam. That it doesn’t work. That it’s all luck. But the real problem wasn’t the market. It was the expectations they were sold, and the gambling they mistook for investment strategy.
And maybe the biggest irony is that many of them would have done just fine if they had simply done less.
Let me repeat something I’ve come to believe: the strongest edge you can have as an investor in this environment is the ability to stay boring. To stay consistent. To sit still while everyone else is jumping around. To quietly compound while the rest of the world confuses investing to be a ‘performance’.
You won’t get famous. No one will screenshot your portfolio. You won’t be invited to podcasts to boast about your wealth. But you’ll survive. And in investing, survival is underrated.
While volatility might make the game more exciting, it also makes it easier to lose. And when the music stops (and it does stop from time to time), the real winners won’t be the ones who played the loudest, but the ones who stayed in the game, ignored the noise, embraced the boredom, and let time do what time always does.
It doesn’t feel like much. But it’s everything.
The Sketchbook of Wisdom: A Hand-Crafted Manual on the Pursuit of Wealth and Good Life.
This is a masterpiece.
– Morgan Housel, Author, The Psychology of Money
