Why invest in the Australia Stock Market when you can invest in Roger Federer?
The 2010 Australian Open has finished and again Roger Federer has claimed the trophy. Wouldn’t it be nice if the shares you have invested in were as successful and consistent as the Swiss tennis legend?
At the start of the year, I had $2,000 and wanted to invest in ‘a sure thing’. But in the world we live in today, what exactly can we be certain of?
I decided to buy $1,000 worth of shares in the ANZ Banking Corporation. ANZ is a blue chip company placed in an industry with predicted growth and is also a major sponsor of the Australian Open.
Whilst online stockbroking has grown over the years since the Internet has reached households, so too has online gambling.
I also decided to ‘invest’ $1,000 in Rodger Federer making the 4th round of the Australian Open.
Federer, being the number one-ranked player in the world, has the luxury of playing the little known, lower ranker players in the early rounds.
Federer played Russia’s Igor Andreev, Romanian Victor Hanescu and the Spanish Albert Montañés in the first 3 rounds. As these players are all outside the top 30 on the rankings, Federer was heavy favourite. The returns for every $1 bet was $1.03 for Andreev and Hanescu and just $1.01 for Montañés on sportsbet.com.au
Some would argue that the return is so small that it’s simply not worth it but after comparing the tennis results to my ANZ shares, I’ll gladly take my one cent return.
ANZ shares started 2010 at $22.79 and are now worth $21.90. So from my $1000, I now have $960.94.
Federer gave me more financial success. In the first round my $1,000 became $1,030, the second round witnessed my $1,030 become $1,060.90 and increased to 1,071.51 after the third.
So instead of the $39 loss provided by ANZ, Roger Federer has provided me with a $71 gain.
But there is an anti-gambling sentiment in Australia and many will need a lot more convincing that betting on tennis is more rewarding than investing in Australian companies.
ANZ had a strong 2009 with the share price rising from $15.29 last January to $22.88 when the year’s trading finished in December. Investors are over the moon with their 49% annual return. But is Federer still better value than ANZ?
Federer was returning just one cent for every dollar bet against Montanes. Federer blitzed through the match winning his three sets in just 101 minutes. At that rate, Federer is returning 5204% annually. It would take him less than 4 days to match what ANZ achieved in 12 months.
Now many would automatically dismiss anyone who openly advocates gambling as a reliable revenue stream. Many see gambling as evil, claiming it has caused enormous financial distress around the world. But if Roger Federer were to lose a tennis game, would it result in a global crisis potentially losing trillions of dollars from household wealth? Most certainly not.
Roger Federer is just 28 years old and is expected to continue playing tennis until his mid 30s. The global financial markets are still quite volatile and have yet to maintain consistency since the global crisis began just over years 3 years ago.
For me, it’s an easy decision. Roger Federer won $2.1 million in prize money for his victory on Sunday night and that’s the kind of success I want to put my money on.