Money Games Information

Many fortunes pass through the windows at race tracks and off track betting facilities and racebooks every day. It is no wonder that so many people around the world try to tap into this steady stream of money. But more often than not, those people that would be richer by the experience are poorer and wiser. Gambling at any facility is like a huge magnet that always seems to suck money in, but never shooting it back out.

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But the race tracks don’t wind up holding all the money. Some of it does make it back out the door in someone’s pocket. The problem is, it is usually the people who don’t need it who win it. In frustration and sometimes desperation people pour more and more cash into the game.

How can you take money home with you after a day of handicapping? There are several ways.

1. Don’t bet and go home with almost as much as you started with, just deduct your expenses.

2. Only bet part of your money and keep a few bucks in your shoe for the long ride home (this may be where the term stinking money came from).

3. Win more than you wager.

If number three appeals to you the most, you’re not alone. If you have a job, you probably go home every week with more money than you started with, if you don’t I’d recommend a change in employers. Let’s take a lesson from life and treat making money from horse racing as a job.

You should expect to need training for a job and also to have some expenses. Some job’s even require you to invest some of your own money on tools or supplies.

We’ll call your program, admission, travel cost as expenses, just like going to work any where else. You have to get there and when you do, you’ll eventually have to eat before quitting time. There is at least one more expense, it’s called the vig or track take-out. It is what the race track deducts from every wager made. Betting costs money.

Like any job, you’ll need training and then expect a reasonable amount of time in which you will make very little or even lose some while you learn the job.

Finally, if all goes well, you can start to show a profit and take home some money from the races. I recommend you bet very light in the beginning and only increase your bets when you are ready and can show a consistent profit. Start with a good system and as you learn how to use it and adapt it to your own style, you will find out if you are good enough to make money or if racing will continue to be just a hobby.

And now, finally, to answer your question, "How to make a small fortune from betting on the horses at the race track?" The old joke says, that’s easy, just start with a large fortune.

"Practice makes perfect," my mother used to say. It’s as true of futures trading as of anything else. Before you put your hard-earned cash on the line, you need to practice trading if you want to succeed as a futures trader.

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Making practice trades allows you to:

1. Test and fine-tune your trading system.
2. Learn to successfully pull the trigger.
3. Perfect your charting system.
4. Develop productive trading habits.
5. Practice self-discipline.

See if you have what it takes to be a futures trader.

That last item is very important. You can have the best system in the world but if you don’t believe in yourself, if you don’t believe in your system, if you don’t have the passion to trade, no system in the world will make you a successful futures trader. Like I tell my students, successful futures trading is 90% attitude. Not everyone has the skill, passion, ability or discipline to succeed. Better to find out before you lose your money.

In my Futures Trading Secrets course, I recommend that students practice trading on the e-Mini with Sims Broker until they achieve a certain level of confidence and consistency in their trades. Practicing futures trading on paper is important before you attempt the real thing. Before you start trading with real money, you must develop the discipline to control your emotions and stick to your system. Plunking down cold, hard cash opens the door to greed and fear, which can submarine even the best system if not held in check. Practice will give you the skill, confidence and courage to succeed as a futures trader.

Practice trading should be as detailed and meticulously recorded as the real thing:

1. Log and study your profits and losses.
2. Look for patterns that indicate when you successfully pulled the trigger and when you failed.
3. Work to increase successful strategies and decrease unsuccessful ones.
4. Develop successful daily trading habits and routines.

Remember to practice the discipline to stick to the daily habits and routines even when you don’t feel like it or they don’t seem to be working. Discipline and routine are essential habits of the successful futures trader. Every trader loses sometimes. You have to have the discipline to follow your routine and have faith in your system even when you’re losing, if you are to ultimately succeed.

You’ll find this systematic approach true of successful athletes, businessmen, writers, dog trainers and, of course, futures traders. If you look at what makes a person successful, you’ll discover that he or she has developed a specific routine and follows it religiously every day.

For instance, Tiger Woods doesn’t plop the ball on the ground and flail away. He follows a regimented and very carefully practiced series of steps to give himself the best possibility of success. Following a pattern of behavior time after time has helped to make him the world’s most successful golfer.

The routine is easy to see in dog training where each training module educates, reinforces, builds on success and leads to the next step. The trainer has broken into a series of steps the behavior he desires the dog to achieve. Before he can heel successfully, a dog learns to follow a series of necessary preliminary steps: sit, stay, start, stop, heel. With practice he learns to watch your left leg and move with it, starting and stopping as you do. In time, the behavior becomes so ingrained the verbal commands are no longer necessary.

My students say it with me: "One of the most important things you can do to improve your trading is to develop specific patterns of behavior."

This is not an article for large institutional investors but for individual investors like you and me. If you are a large institutional investor, you are probably familiar with ways to invest directly in other countries by now. If not, just get in contact with one of the global investment banks like Morgan Stanley, Merrill Lynch, UBS or Credit Suisse, which have operations in Brazil and can set up an institutional investor account for you pretty easily. However, if you are planning to invest less than US$1 million, these accounts are probably too expensive and complicated for this volume and you may benefit from this article as well.

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Also, this article focus on investors that are not Brazilians or not legally residents in Brazil. If you are Brazilian or residing in Brazil, all you have to do is go to your bank and open a brokerage account. However, as a foreigner, you cannot open a bank account in Brazil. So we will try to facilitate things a little and come up with alternatives using accounts in the United States, which you can use whether or not you are living there.

As a first option, there are currently 35 share certificates of Brazilian companies listed and traded in the New York exchange (and 1 in NASDAQ). These Brazilian certificates are called Depository Receipts (DRs) and are quoted in U.S. dollars. If you already have a brokerage account in the U.S. or in any other country that allow you to buy shares listed in the New York Stock Exchange (NYSE), you can buy these DRs just like any other share.

Brazilian companies that have shares listed in the NYSE are some of the largest companies in Brazil. You can find companies like Vale (RIO & RIO-P, top 3 mining company in the world), Petrobras (PBR & PBR/A, top 10 oil company in the world), Embraer (ERJ, top 4 aircraft manufacture in the world) and many other companies involved in natural resources (VCP, ARA), steel (SID, GGB), food (PDA, SDA), financial services (BBD, ITU, UBB), utilities (ELP, CIG, CPL, SBS), telecom (BRP, TSP, TSU, TNE), airlines (GOL, TAM), real estate (GFA), consumer and retail (ABV, CBD), etc. If you want a list of all Brazilian companies listed as DRs in the U.S. exchanges, you can go to Bank of America’s website and search their DR page (or google "bny adr" to find the right page).

A few other companies that operate in Brazil have decided to list shares directly in the United Stated (not as DRs, but as shares). Usually these companies have headquarters outside of Brazil, but all or most of their operations in Brazil. One example is Cosan, one of the largest sugar and ethanol companies in the world, which has an operating company listed in Brazil but also a Bermuda-based holding company listed in the NYSE (CZZ).

You can use the 3-letter symbols above (like RIO or PBR for example) to search for information on these companies in the S.E.C., Yahoo Finance or other financial websites. These are the same symbols you would enter in an online broker website to buy one of these DRs in the New York Stock Exchange.

If you don’t want to invest in a specific company, but would rather invest if a group of companies for diversification, there are two easy options for you to do that. The first option is to look for a stock mutual fund that invests in Brazil. Some of the largest banks and asset management companies offer Brazil-specific funds in the U.S. and Europe, like ABNAmro, HSBC and others. Just ask your bank or look it up in the internet. Some institutions tough only offer Latin American funds and they will try to convince you that these funds are better because they offer more diversification. Better or not, that will depend on your objectives. A Latin American fund will usually have a significant percentage of investments in Mexico, which is an economy much more "correlated" (as in dependent) to the United States. If you are OK with that, a Latin American fund may be the right choice for you. But if you have enough of your assets in the U.S. (or industrial countries) and is seeking global diversification, you may be better off looking for one or more country-specific funds.

The second option may be a little easier if you already have a brokerage account. There is a stock fund listed and traded in the NYSE ("Exchange Traded Funds" or ETFs) that "mirrors" the MSCI Brazil Index, which is an index of Brazilian shares published by Morgan Stanley Capital International. It’s called iShares MSCI Brazil Index (EWZ). You buy its share when you want to invest and you sell if you want your money back. As of this date, if you buy a share of EWZ you would be investing the equivalent of 24% in Petrobras (oil), 21% in Vale (mining), 13% in Brazilian banks (Bradesco, Itau and Unibanco), 6% in steel companies (CSN and Gerdau) and 36% in other Brazilian companies. You can look for information on this fund, including their holdings, and buy its shares, just like you would look up or buy any other share in the NYSE: just write the symbol EWZ in Yahoo Finance or your broker’s online trading system. You can also find other iShares regional ETF funds, like for China and Australia.

This is not meant to be a comprehensive article about equity investment options for foreigners in Brazil, but it gives investors easy and interesting ways to invest in the country without too much hassle. But before you make any investment, do not forget to talk to your financial advisor and do your own homework.

There are some big stock trading mistakes that you may or may not know about. Knowing about these ahead of time can save you a lot of time, money, and grief.

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Mistake #1 - Trading with money that you can’t afford to lose

This is much more common than you might expect. This could easily fall into the category of trading out of desperation. I also refer to this as trading with "scared money".

Mistake #2 - Trading Without A Well-Thought-Out Stock Trading Plan

Would you expect to start any business without a plan? You wouldn’t if you wanted to be successful. Successful stock trading requires creating, maintaining, and following through on your trading plan. I have seen people who have spent more time deciding what they were going to have for lunch than they did planning their next stock trade. Please keep in mind that "shooting from the hip" is not a successful stock trading strategy.

Mistake #3 - Having Unrealistic Expectations

Unrealistic expectations causes a great deal of frustration for beginning traders. The hyped-up returns on some stock trading websites make successful trading look like child’s play. The lure of the advertised astronomical rates of return can leave anyone daydreaming about raking in millions of dollars with little to no effort.

Mistake #4 - Not Understanding The Risk Involved

When you are just starting out it’s easy to concentrate on the potential returns from successful stock trading and not pay much attention to the risk. Please keep in mind that the risks in stock trading are real.

Let’s face it, you are going to have losing trades. In fact, at times you are going to have strings of losing trades. This is a natural part of the trading business and even the most successful traders on the planet have losing trades.

The smart thing to do is to assess your risk ahead of time for each and every trade that you take. Trade only if the trade passes the test and meets your risk profile requirements.