Horses v. Stocks

Whether a stock market professional is a bull or bear, there is one sure way to get his goat: imply that investing is comparable to gambling. Howard J. Samuels, who is setting up a string of legal horse-race wagering parlors for New York City, did just that last week. He disclosed that his Offtrack Betting Corp. planned to run ads headlined: IF YOU'RE IN THE STOCK MARKET, YOU MIGHT FIND THIS A BETTER BET.

The reaction was predictable. New York Stock Exchange Chairman Bernard J. Lasker stuffily protested, "on behalf of more than 31 million share-owners who own stock in America's publicly owned corporations," that the only similarity/ between buying stock and betting on the nags is that "both involve a decision on the use of disposable personal income." Samuels teasingly replied: "On behalf of the 48,972 horses that raced in this country in 1970, I am sure that some of the horses feel they have been a better investment in the past few years than some of the investments on the New York Stock Exchange."

Perhaps so, but a horse player could not truthfully agree. Because racetracks do not return,, all the money bet with them, but take out a sizable cut, the inveterate gambler's chances of long-term gain are almost nil--in sharp contrast to the stock investor. Since the 1929 crash, shares listed on the New York Stock Exchange have returned an average 9% a year in price appreciation and dividends.

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