307 Comments

1. Definitely sounds interesting. I’m definitely watching to see what happens with this.

   Comment by Jeramey Jannene — November 27, 2004 @ 3:35 pm

2. Two books for you written in the 60’s:
   How I Made 2,000,000 in the Stock Market by Nicolas Darvas
   &
   Wall Street: The Other Las Vegas by Nicolas Darvas

   You would enjoy based on this post!
   Piranha

   Comment by Christopher Perruna — November 27, 2004 @ 3:49 pm

3. interesting idea but i would rather play a thousand at roullette than buy stock in a company that files ch11 cleans you out and then one year later buys another company for billions ie:kmart at least in vegas you can watch naked people

   Comment by rodney frame — November 27, 2004 @ 5:18 pm

4. Undoubtedly you have the PERSONAL skills to make it happen. You truly are a jack of all trades, master of many. You know .com, you know business start-ups, you know derivatives well enough to structure your own hedge and school every engineer in GS Equity Derivatives, but hiring your talent for your gambling hedge fund is based on circular logic and unless the outcome is based on your personal skills, your returns will not be maximized and your venture won’t meet your expectations.

   Just like you don’t need money to start a company (even when you were worth $500), relying solely on sweat equity, the very best don’t need your capital to make their own calculated bets. So you are left with the supposed “smart money” that brags abouts their results and provides sub-par returns.

   *P.S. - Pushing bonds appears phony especially from a man that “touched all 4-bags” via equity euphoria.

   Good Luck,

   KJF

   Comment by Kevin Flick — November 27, 2004 @ 5:50 pm

5. I’m sure your friends at NBA headquarters will be thrilled with this idea.

   Comment by Stewart Ugelow — November 27, 2004 @ 7:15 pm

6. read Wall Street:the other vegas

   Comment by tk — November 27, 2004 @ 7:45 pm

7. This sounsd very similar to the SAC Capital model

   Comment by Dave — November 27, 2004 @ 9:04 pm

8. How do I get into this fund? Are you being serious or sarcastic. I’ll take the odds on Mark Cuban!

   Comment by Frank Z — November 27, 2004 @ 10:06 pm

9. Hey, Mark,
   A friend directed me to this particular post (though I had read other dispatches from you in the past), and I have to say that your idea is one I’ve tried to draw my friends in on for quite sometime. See, I deal in pari-mutuel wagering (Thoroughbred racing mostly, but I’ve dabbled in harness and greyhound racing), and I think that with the right capital, the game is beatable–even with the 20% takeout rate. Horse racing offers Pick 4 and Pick 6 wagers whereby you pick the winners of X amount of race (four or six, respectively, in this case), and the payouts can be quite handsome… easily six figures in the pick six case. The risk is large, but the reward is ALWAYS worth it because if you pick your spots well, then I could easily see a $25,000 investment returning six figures. Even after taxes you’re still talking a 200% ROI. Anyway, I’d like to join your team as the pari-mutuel analyst.

   Comment by Eddie D. — November 28, 2004 @ 2:01 am

10. Financial goals. Investment plan. Retirement planning. Are you still with me Mr. Cuban? Most people think the stock market is an easy method to make money. Experience investors know that it takes a lot of hard work to find a company that is a great investment.

    D&B reports, debt structuring, corporation legal entity studies, understanding of suppliers, customers—All this information is needed to find a solid investment.

    A lot of people have taken a chance on the market and lost. They followed a hot tip they picked up at last weekend’s cocktail party or tennis game, they invested in their brother-in-law’s company, or they bought into a company they believed in with all their heart. Then they saw it fold, and now they figure once is enough. That fear can be even harder to overcome than the fear that results from inexperience.

    First, its important to note that each particular investment is subject to all the general risks that come with that type of investment. For example, stock prices rise and fall with the stock market cycle, making stocks as an investment subject to market psychology risk. If you buy stock, you inherit that cyclical economic risk. Every bond or certificate of deposit presents some inflation risk, because a rising price level reduces the purchasing power of a fixed income. If you buy any single bond you inherit the inflation risk that comes with all bonds.

    Remember the goal in investing is not to make millions or get rich over night; the goal is to get as far away from zero as you can over a given period of time. You want to do it one penny at a time. That mean’s staying away from hot new companies like Sears Holding (unless you are shorting it), and opting for companies with a proven track record like Heartland Express (HTLD).

    Are gambling and stocks the same, yes! If you gamble without understanding, then you are the same as an irresponsible investor. If you learn how to card count then you are the same as a wise investor. Stock is about the numbers at the end of the day.

    At the end of the day there are a lot of ways the quality of a stock can be measure. Don’t bother with looking at earnings. Under the products and services that the business offers, its debt structure, and its competitors. If you find yourself not understanding the company’s given industry, the product, or structure of debt, then buyer b-e-w-a-r-e.

    Below are companies in which I have bought stock. And, I plan to keep it that way for the next year.

    Zimmer Holdings (ZMH)
    Marten Transport (MRTN)
    Heartland Express (HTLD)
    Kroger (KR)
    EADS NV (Paris: EAD)
    Metro AG (Frankfort: MEO)

    Comment by Sterling Wright — November 28, 2004 @ 3:12 am

11. An observation - it seems to me the most consistent way to “win” at gambling is to be the house.

    Interestingly, I recently had the opportunity to meet the founder and current vice-chairman of a very large, major gaming company. Great business for him as an owner - but he, personally, doesn’t gamble at all.

    Comment by Shannon Clark — November 28, 2004 @ 7:37 am

12. If you have the kind of money that you have, the previous poster is right. There is no reason to place bets when you can be the house. The reason for this is that you can gamble as the house by not trying to balance your books: You bias the line you offer the public in the direction that will get you money on the side you want to bet against and less money on the side you want to bet. Normally all you need to do is charge a fee to bet the side you don’t want them to, and give the public true odds on the other. In the meantime, you get everyone’s vig and most of the time you can get your real bets in without paying for them. There is at least one place I’m almost certain does this and does it well.

    Comment by Zvi Mowshowitz — November 28, 2004 @ 8:09 am

13. Good luck Mark

    Christopher

    Comment by LostInAmerica — November 28, 2004 @ 9:40 am

14. Mark,
    Your assumptions and observations are even more acurate then you expressed,how & why you ask. DERIVATIVES MARKETS, Let’s not forget that boondogle.

    Happy Trials, Whats your minimum?
    LeeF

    Comment by Lee F — November 28, 2004 @ 10:52 am

15. Mark,
    Your assumptions and observations are even more acurate then you expressed,how & why you ask. DERIVATIVES MARKETS, Let’s not forget that boondogle.

    Happy Trials, Whats your minimum?
    LeeF

    Comment by Lee F — November 28, 2004 @ 11:15 am

16. Here are the main pros and cons of your idea.

    The pros are that you are correct in assuming that the sports betting market is very inefficient in a number of ways.
    There are those that make better numbers than the bookmakers by using computer based stats mixed with injury reports and road trip reports.
    As an example the line may be Mavericks –4 and they predict that if the game were played a 1000 times the true line should be Mavericks –6 so they have an edge by betting on –4.
    They look at all results as a gaussian distribution with more positives than negatives.
    A good winning sports bettor (investor) will have a long term record of 55% winners Vs the spread.
    You need 52.38% winners Vs the –110 juice to breakeven.
    The beauty of the sports betting market is the ability to shop at different sportsbooks.
    In the above example most sportsbooks may offer Mavericks –4 but you may find a sportsbook that offers
    you –3.5. This means in the gaussian distribution of results, every time Mavericks win by 4, you win the game instead of push (tie) .
    Can you imagine a stock market that offers you prices on the same stock up to 5% cheaper!
    There is another area which is exploitable just as the stock market is.
    Arbitrage. You can arbitrage (scalp) lines across different sportsbooks.
    As an example in baseball you can often get +130 on one team and –125 on the other.
    This would give you a 0.98% ROI.
    Another form of arbitrage is the middle.
    Where one book offers you –6 on one NBA team and another book offers you +8 on the other.
    The favorite will win by 6, 7 or 8 enough to overcome the juice (commission).
    How do we know this is true? Quite a few other people and myself have vast databases of results and stat breakdowns, which tells us the estimate of the probability of a result happening.
    The above is very simplistic and only scratches at the surface of sportsbetting. There are a lot of methods and techniques that are not public knowledge for obvious reasons.
    The sharp bettors like to stay one step ahead of the bookmakers. They do not want them to plug up the inefficiencies.

    The cons.

    As a winning player you run into the problem of getting “backed off” from sportsbooks.
    Meaning if you win too much or they believe your action to be sharp they will close your account and ask you to leave. Just as a card counter in Vegas is asked not to play.
    The bigger the amount, the more trouble you will have getting down at the best prices.
    The stock market is a huge market compared to the sports betting market and can stand a lot more action.

    Saying all that there are large syndicates out there who are already doing what you are proposing.

    If you have any specific questions about the sportsbetting market feel free to email me at
    dreamer_bj21@yahoo.com

    Comment by Dreamer — November 28, 2004 @ 12:24 pm

17. Big, old-school, bookie-style sports books are dead. Taking a 50-50 bet at -110 is the same as equity commissions were pre-Fidelity, pre-Etrade, pre-Schwab. The strongest point that Mark makes is that sports betting really isn’t that different than equity betting (aka “investing”).

    Also, there is no reason sports betting markets should be seen as static investments. That’s like only being able to trade YHOO at open and at close.

    Sports markets will evolve the same way that personal investor equity betting has evolved. There is absolutely no reason that a sports wager can not be traded dynamically, during the running of a game. Some people may want to bail on a wager to recoup 10 cents on the dollar and some way to throw the dice on the longshot and buy a wager for 10 cents on the dollar. Let the market work.

    Tradesports and others are doing some of this with intra-game trading, but this is a whole new world. When you see sports wagering as a market and not just as a 50-50 proposition bet, then I can imagine whole companies dedicated to it. And the scary thing is, that company looks a lot like a hedge fund: portfolio manager, cfo, game analysts, traders, and a whole boatload of quants.

    Comment by Sam O — November 28, 2004 @ 12:58 pm

18. Mark Cuban has enough money to own a sports book. This would give him the opportunity to bet on a particular game (by shading the line slightly to attract money on the side he wants to bet against) and in effect get +110 on his wager rather than -110 if he was a bettor.

    Comment by Scott V. — November 28, 2004 @ 4:51 pm

19. I highly reccomend you investigate the business operations of casino companys such as Bodog, Party Poker, and Paridise. Paridise is a prime example, it was just bought out and could have been primed for the picking. These offshore ventures are far more profitable and easier to operate than traditional casinos, and with Mr. Cuban’s name and relationships this could possibly be his largest venture to date. Low overhead, 80% of the expense is marketing & customer service… you have just got to love this formula!

    Lets just consider low limit poker. According to the industry source - http://www.pokerpulse.com, there has been $153,422,016 wagered online playing poker in the past 24 hours, with an estimated 1.3 million customers during the month of October. The house makes it’s money off the rake, at an average of $1.75 per hand played at each table, this equates to $2,530.00 per table per day. Lets now assume that Party Poker has on average 600 tables that collect rake. This is a gross revenue of 1.5 million per day, or 1/2 billion per year. Of course this does not include soponsorship fees or mercendising rights… but you can see this becomes a very profitable business whose overhead is probably less than 15% of Gross revenues.

    Mr. Cuban… I think THIS is your future. Now that the WTOP has rules the US cannot prohibit it’s citizens from offshore gambling, perhaps its time to relocate to Antigua?

    Comment by Drive TT — November 28, 2004 @ 6:26 pm

20. Mr Cuban is joking, right?

    Comment by Molly — November 28, 2004 @ 7:04 pm

21. My first impulse when reading this was that the NBA would have to look poorly (to put it mildly) upon such an operation. Maybe if there were no sports bets being made by the fund, and certainly not any NBA bets it would be allowed by Stern et al. But then I remembered the Maloofs. Does the Palms have a sports book? And if so do they take bets on the kings games? I would imagine the answer to both of these questions are yes which brings up some interesting conflict of interest issues.

    Mr. Cuban I’m curious how far you’re willing to go with this idea. Would there be restrictions on the type of gambling or would anything suffice?

    here’s a few ideas.

    Forming a team of poker players and paying their expenses, entry fees, etc… similar to what you already do with the Mavericks. Essentially you would be running another team and then pooling and distributing winnings, while keeping a share for the owners. this would almost be like a NASCAR team.

    I don’t think this would work well for a casino, the table games have too big of a house edge, and the only way to consistently beat them is to cheat. And cheating gets you kicked out of casinos. Hell just winning consistently would get you kicked out of a casino, so running some kind of scam similar to those MIT kids would probably not work.

    Parimutual betting would present an intriguing possibility. Bringing resources to bare on racing may make it possible to beat the system, i just don’t know enough about it. The few people i know who were heavily into racing lost money, but as time went on they did seem to lose less of it, implying that they were at least learning something from the system.

    Another interesting possibility would be betting on unusual things that you would have the power to influence. e.g. betting on the presidential election and then working towards getting a particular candidate elected to collect the payoff. With the resources at your command this would probably be feasible.

    State lotteries and contest give aways might also be an opportunity. I’m thinking specifically of Lazlo from Real Genius and the contests that he won, although that might be too small of a scale for an investor like you.

    Anyways it’s an intriguing idea, thanks for giving me something to think about for 15 minutes. Oh and thank you for the last several years of the mavericks, for this depressed bulls fan, they’ve certainly been a bright spot in the NBA.

    Comment by alex — November 28, 2004 @ 7:37 pm

22. I like it. This idea kicks ass. I want in.

    Comment by James King — November 28, 2004 @ 8:36 pm

23. Mark, if you need anyone to help ya out who knows jack squat about what you just described, then i am your man.

    Comment by John — November 28, 2004 @ 10:27 pm

24. Our company is in the process of finalizing software that allows investors to buy and sell stocks in an automated fashion via their computer. It never makes a mistake and never loses money. Just like the computers the big guys use in NY on Wall Street. We will make this software available for sale in 2005 and Mark, if you want to reach that 100% level of stock winners,we’ve got your ticket to our game and we can help you do that. This formula could also be applied to making bets on sporting events etc..I guess my tech guys just got a new reason to put in more O.T. Our main business is golf ball manufacturing but the pathetic stock trading software on the market forced me into developing another arm of the company. Hey Mark..want to discuss an opportunity?

    Comment by Greg Martin — November 29, 2004 @ 9:15 am

25. The Maloof’s don’t take NBA bets in their sportsbook @ the Palms - obviously, Mark would operate the same way.

    Comment by Joe S. — November 29, 2004 @ 9:33 am

26. I have been gambling on sports since 1995. Each and every year I usually profit. My low was a profit of $16,000 and my high was a profit of $33,000. I am very consistent in my money management which is just as important as picking the games.

    I only rely on my own picks and feeling. Any gambler knows that to rely on someone elses picks is risky. However, there are some outstanding cappers with excellent track records.

    Sometimes I call or watch the tv for a man named Michael Cash Pomer located in the Toronto area. This man is the most personable entertaining man ever. He does charity work, and always promotes businesses in the area. He is logical, realistic and fun.

    Mark, I would love to be paid to make picks for you as well as recommend Mr. Palmer.

    I will not make you a million bucks if my starting seed money is a thousand. But I can with reasonable certainty give you a good % profit.

    Let me know

    Patrick Muldoon - Mark Cuban Fan For Life

    Comment by Patrick Muldoon — November 29, 2004 @ 11:15 am

27. A couple of things:

    Sports bettors regularly make money. All you have to do is be able to beat the conventional wisdom, which is often wrong. There was an article in my alumni magazine about an alumnus who was a professional gambler, and that’s what he did. He’s compute his own odds on sports games, and if his odds were better, he’d bet.

    There are some syndicates that do this in Asian horse racing as well.

    Second, check out http://www.marketocracy.com (disclaimer, I work for them) you can start a virtual fund there with $1,000,000 of pretend money and see how you do. If you do well, you can automatically get selected for running the main fund that uses real money.

    Comment by Pierce Wetter — November 29, 2004 @ 12:06 pm

28. i was lost mid way thru…but read on anyways. i got 20 bucks mavs make the lil general their next coach…
    https://dallaspartyrental.com

    Comment by Luis — November 29, 2004 @ 12:35 pm

29. Mark, where do I send my resume?

    I trade based on psychology. It is IMPOSSIBLE for the market to trade efficiently. People do not make decisions based on logic.

    I’m 25. I was going to start up my own fund after getting a few more years of a track record beating the S&P (I currently am at 5+ years). But you present a better opportunity.

    Interview me. I’ll wash the analysts dishes if it gets my foot in the door.

    In a past email you said that if I apply myself I can learn more on my own, then I can in grad school. Let’s prove you right!

    email me and let me know where to send my resume.

    Comment by Greg Wilson — November 29, 2004 @ 1:44 pm

30. Cuban, you suck and so do the Mavericks. The Celtics will win the championship, mark my words.

    Comment by Dennis — November 29, 2004 @ 2:09 pm

31. While it is an “idea whose time has come”, I suspect the DOJ will think otherwise, as I’m sure you know.

    As a co-founder of a company that pioneered exchange betting around the world and has just launched the world’s first true peer-to-peer betting network, (www.betbug.com) I’ve spent many hours discussing the similarties between acquiring risk on sports, stocks, commodities, etc. If you are interested in this sort of thing, you may wish to speak with Justin Wolfers, formerly of Stanford and now I believe at Wharton. A professor at the MBA school, he’s the only guy I know who has officially recognized the similarties at such a high academic level. I’ve corresponded with him a number of times and he’s very approachable.

    You might also be interested to know that our company was the first to do Monte Carlo modeling and build sophisticated market making tools for sports betting exchanges.

    If you remain interested, feel free to drop me an email.

    Great site by the way. I read it every week.

    Comment by Anthony Novac — November 29, 2004 @ 2:15 pm

32. Mark,

    It seems like this would be similiar to other hedge funds but a slightly different focus. It would be highly profitable if the team worked very hard, did lots of research and occassionally got lucky. I think you should go for it. I also think that the NFL is the easiest target. I have picked over 60% verse the spreadthe last 6 years and I don’t think I have any extra special system.

    Comment by Joe B — November 29, 2004 @ 3:38 pm

33. Response to Greg Martin’s post,

    To my knowledge, there is no system in existence that achieves 100% profitability (after inflation and taxes, that is) over any given time period. I find it difficult to believe that your quantitative trading system can deliver as promised when implemented in a real-time trading environment (i.e, not back-tested). However, there are a number of quantitatively-oriented hedge funds that have performed spectacularly well over multiyear periods: Renaissance Technologies, SAC Capital, Paloma Partners, DE Shaw and Atlas Fund all come to mind (along with the proprietary trading desks at Goldman & Lehman). AlphaSimplex Group, run by MIT professor Andrew Lo, is another interesting shop. In any case, I would subject the model to rigorous stress testing, etc. If you can truly prove the model’s utility through an actual performance record, then I would approach a number of these and other money managers. If you plan to distribute the system on a mass retail scale and are successful, then the model has to be dynamic and “intelligent” enough to overcome the inevitable performance degradation that accompanies widespread use (in other words, the trades recommended by the model may become too crowded if a lot of people utilize it). The same outcome applies to hedge funds and institutional money as well: many hedge funds are short the dollar, short tech, and are mostly crowded into the exact same trades, names, etc. This groupthink has resulted in most funds posting YTD performance numbers that are downright embarrassing. Just because common sense, academic theory and/or market precedent dictate that a security should be priced at $X doesn’t mean that it will trade for $X. Good luck.

    Comment by Steve — November 29, 2004 @ 5:06 pm

34. I knew it was only a matter of time before the touts and get rich quick schemers would show up with their pie in the sky.

    Comment by Scott V. — November 29, 2004 @ 5:48 pm

35. Is it April 1st? Good timing! I subscribe to the email called “Napoleon Hill - Thought of the Day” and on Friday I got this: (fyi, N. Hill’s ‘Think and Grow Rich’ is probably the best book out there on success)

    ******************

    November 26, 2004

    PEOPLE WHO GAMBLE FOR MONEY ARE POTENTIAL CHEATERS BECAUSE THEY ARE TRYING TO GET SOMETHING FOR NOTHING.

    Anyone who risks his or her wealth upon the fickle whims of chance is usually not the type of person you would like to have for a business partner. They are individuals who are most likely to yield to the temptation to cut corners on product quality, overlook unsafe working conditions, and generally fail to deliver on their promises. It is impossible to get something for nothing for a sustained period of time. The law of compensation is unforgiving in its demands that you get what you deserve. You may feel at times that you deserve better-and you may-but eventually your payback will be commensurate with your efforts.

    This positive message is brought to you by the Napoleon Hill Foundation. Visit us at http://www.naphill.org. We encourage you to forward this to friends and family. They can sign up for this free service at our web site.

    ***********

    Comment by greg — November 29, 2004 @ 6:17 pm

36. Don’t do it! You’ll be sorry!

    …on second thought, where do I sign up?

    Comment by Pete Rose — November 29, 2004 @ 6:54 pm

37. Mark - Every action in life is a gamble (not just investing), but most of our actions are gambling choices we make subconsciously everyday.

    I always get a kick out of folks who say that they are not risk takers, yet as an example many are too lazy to check their car’s tire pressure at regular intervals for instance (if ever at all). Heck just getting in your car and driving is a quantitative and qualitative risk - most just don’t realize that they’re betting something really valuable right then and there. They don’t even think about the risk of car trouble, or wrecks or god forbid injury or whatever because “the odds are it will not happen to me”.

    Life is full of hedges, but living it makes it work the risks we rarely realize we’re taking. When people open their eyes and see just how often they gamble what they take for granted each and every day, they’d look at your little crafty hedge idea and say .. hmm that’s not such a big risk afterall.

    Comment by Jason in Tampa — November 29, 2004 @ 7:37 pm

38. Mr. Cuban - this is going to draw a fine from the NBA.

    They are so sensitive to this stuff (as they should be) that even the slightest infringement into this area is going to send alarms ringing throughout the Sterm Compound in NY.

    I can see it now, Mr. Stern (let’s give the man his respect here - he isn’t David b/c I don’t know him the same way you are Mr. Cuban and you are both very good at what you do and deserve that measure of respect) being awoken by the Cuban hotline - a little blue number on the bedside table and matching one on the office desk ringing with a flashing Mavericks logo - “alert alert alert”…

    Within minutes your mobile phone is ringing and your e-mail is screaming, “You’ve Got Mail!” with Mr. Stern on the line.

    In his most impressive and professional voice he speaks slowly into the phone, “Now Mark. You know you shouldn’t be saying this stuff. Any impropriety will reflect poorly on the league and put into question the integrity of our great sport.”

    Sighing you reply, “David, my man. Who do you want me to make THIS check out to….”

    Rack me!

    Chris

    Comment by Chris — November 29, 2004 @ 7:39 pm

39. Funny most serious hedge fund managers apply gaming theory to the money management and position sizing of their fund management.

    Comment by Ken — November 29, 2004 @ 8:52 pm

40. darvas? what does a dancer who used channel breakouts have to do with sports betting? you would be better served reading about bill walters and the computer group…

    to make this venture worthwhile, you have to have the same characteristics of a sucessfull hedge fund - namely, have an “edge”, or be able to absorb risk premiums from various markets. i believe as certain hf strategies lose their returns due to capital constraints/competition (think declining returns for merger arb), you will find a number of new alternative strategies to diversify for the endless appetites of fofunds.

    i work as a quant, and there are a number of parallels with investing/trading where you can find this edge in sports betting.

    fundamental - ie you know more than anyone about biotech stocks or UNC-Charlotte basketball, etc. you know that the star point guard has the flu, went out drinking last night, etc. this is simply being more informed (almost like information arb) than anyone else.

    quantitative - build perdictive models and/or arb. ie what statistics are important to the line? an associate and i use an arb model sucessfully, but not in the traditional arb where you arb the lines between differrent sportsbooks…

    behavioral - realize there are psychological tendancies of the human brain - ie failure to emphasize one event and over-extrapolating a series of events…

    Comment by bubbrubb — November 30, 2004 @ 1:01 am

41. Just to be a wet blanket here —

    The “big” money is not in the bets, unless you’re the house (or Lyle Berman). It’s in the marketing. A Cuban Crew at the WSOP, WPT, etc. would just slay the poker world. Think of all the 20-somethings that would be all over you, Mr. Holdem Hoops! I still don’t think Stern would ever in a million years let something like this slide for an NBA owner, and who would ever give up *that* gig?

    Ride the wave, baby…fund a crew.

    Comment by Scott Chaffin — November 30, 2004 @ 1:26 am

42. Great points Mark, but just to clarify a bit on the Blackjack bet not having value. A players advantage changes as the cards are dealt out(ratio of low cards to high cards. It’s not like slots where there is a constant house edge. That’s how card counters get their edge–bet big when you have the advantage and bet little or nothing at all when the house has the edge. That’s also how I pay my college tuition. Oh well, just my 2 cents.

    Comment by Anthony — November 30, 2004 @ 5:03 am

43. Sign me up Mr Cuban!

    On another note. Itra-game trading for sportsbooks is a BILLION Dollar idea.

    Comment by KC — November 30, 2004 @ 9:02 am

44. Mr

    This sounsd very similar to the SAC Capital model

    Comment by hunhun8 — November 30, 2004 @ 9:15 am

45. You have some tax issues of course unless you can package this into something. This wouldnt be tax friendly at all.

    If you are looking for a CFO, I’m available! Check out my web site, all about hedge funds.

    Comment by B Bulsara — November 30, 2004 @ 10:38 am

46. Mark,

    This sounds like a good deal. Let the fans know when you can start this and what the minimum is. I’m ready!

    Jim

    Comment by Jim — November 30, 2004 @ 11:22 am

47. I suggested that he should start a private equity firm focusing on early stage tech companies in response to an earlier post. “Smart money” employs an information and analytical advantage to beat the market; the only relevant industry knowledge that Mark brings to the table is in technology. Successful investment funds generally have a focus in an area where they have expertise and an analytical advantage: Soros->currency markets, Griffen->risk arbitrage and event driven strategies, etc.

    Mark Cuban has bootstrapped several start-ups and would be a tremendous value add to early stage tech companies that he invests in.

    Comment by Anonymous Coward — November 30, 2004 @ 12:25 pm

48. How novel that you think a ‘betting’ hedge fund is better than the stock market. Try to remember how you became a Billionaire. Thank the stock market for your success!

    Comment by Susan — November 30, 2004 @ 1:11 pm

49. How novel that you think a ‘betting’ hedge fund is better than the stock market.
    Try to remember how you became a Billionaire. Thank the stock market for your success!

    Comment by Susan — November 30, 2004 @ 1:13 pm

50. Please hurry up and post another fine entry in your blog, Mr. Cuban. I’m sure your Hedge Fund is going to be great, I just don’t understand it.

    Dude, write about fighting Pacers or rip on Trump some more!!! Ya know, something I can understand.

    Comment by Paul Pate — November 30, 2004 @ 1:57 pm

51. Mark, interesting quote that ties in with your thoughts: Gambling and money management are the same. In each the goal should be to spread risk, avoid becoming emotional, and focus on the odds. An investor succeeds by hitting singles and doubles-not by going for the fences. In fact a home run is a sign of a mistake, because it deviates too far from the mean. “Vegas taught me I could beat the system with a combination of hard work, ideas that no one has thought of yet, and the ability to tolerate a constant routine that to many people seems monotonous”, “but to me its the most exciting thing in the world”–Bill Gross

    Comment by Jamie Lissette — November 30, 2004 @ 2:32 pm

52. I’m in! I’m tired of driving to Shreveport anyway.

    Comment by Daily Texican — November 30, 2004 @ 3:01 pm

53. I like this idea and I am in contact with some math/statistical whizzes, who also have a passion for sports and betting. Please let me know if you follow through with this idea, I would like to read some more information on it. Thank you

    Comment by Stephen Butkovich — November 30, 2004 @ 3:25 pm

54. I would be very curious Mark to find out how you would select your ‘managers’ for this hedge fund. Would you create an open competition to find the best sports cappers? There are thousands of people who promote themselves on the web or tv & brag about great winnings, however very few actually post their track record or allow an ‘independent’ 3rd party to monitor their results. Would love to hear how you would form your ’sports braintrust’.

    Cheers,

    George

    Comment by George — November 30, 2004 @ 3:30 pm

55. I have been in the sports handicapping/investing business online since 1996 with an exclusive focus on college sports.

    I have envisioned having several sports handicapping funds each with its own set of guidelines (i.e. low risk, high risk, college basketball totals, college basketball money lines, college basketball underdogs, etc, etc.)

    This would once in for all bring legitimacy to the sports handicapping world and the handful of hard working honest guys out there like myself. Instead of claiming great records and win percentages, handicappers could simply point to the performance of their fund. An investor in the fund would have the advantage of getting the best lines and built in money management. There are also sportsbooks out there who do not mind winners, they like the high volume. It is a win-win for everyone involved. Also, it is a lot more fun for investors to track the results of sporting events that it is to watch stock quotes come in all day. Much more entertaining action as Mark eluded to.

    I LOVE the idea. I bought the domains SportsFunds.com, BetFunds.com, BettingFund.com, SportsBettingFund.com, SportsBettingFunds.com years ago but I have always been concerned of legal issues.

    Mark, I would love to exchange thoughts and ideas on this with you. It has been in my head for years. Do not hesitate to contact me.

    Cordially,

    Edward
    Handicapper.net

    Comment by Edward Golden — November 30, 2004 @ 4:10 pm

56. I had this idea last year.
    you can leverage the spreads in the sports industry
    because they are not as tight as banking/trading etc
    and treat prices and do the technical analysis the same way
    as other financial vehicles

    Comment by chris fox — November 30, 2004 @ 4:14 pm

57. I think the idea sounds NEAT!!!!!!!!

    Comment by Gregg Soeder — November 30, 2004 @ 4:41 pm

58. interesting concept,but why a hedge fund? if you are doing it with your own money, just hire a couple of ‘experts’, fund an account and set up a small office in nevada and give it a whirl-david stern would probably watch it like a hawk, but i don’t think his oversight would be near as oppressive as the SEC if you were to go the hedge fund route…if your intention is to attract outside capital to fund this venture, if you went with a small-cap IPO, a lot of maverick fans could participate who would not pass the ‘accredited investor’ test for the hedge fund

    Comment by tom pendleton — November 30, 2004 @ 4:43 pm

59. Noone gambles. Everyone trades.
    http://www.betfair.com

    Comment by nuff said — November 30, 2004 @ 4:54 pm

60. I lost to a woman with Jack-Five offsuit.

    How ’bout those cowboys?

    Comment by b-lud — November 30, 2004 @ 5:03 pm

61. I want to manage your Pai Gow Poker Portfolio. I beat my mommy all the time.

    Steve Jeltz 4 Life.

    Comment by kevin Cooper — November 30, 2004 @ 5:07 pm

62. Mark,

    Great Idea with huge potential.
    I sent you an email regarding our site, http://www.wicked-picks.com.
    We provide our members with picks from the nation’s best handicappers for any & all sports.
    We’ve been able to provide consistent winners, as we use the “two heads are better than one” philosophy by getting a host of picks from the expert cappers…then analyze them for strength and consistency.
    We would be happy to offer our services to the fund and it’s success.
    Best of Luck with this endeavor!!!
    Jay Rabalais
    wicked-picks.com

    Comment by Jay Rabalais — November 30, 2004 @ 5:09 pm

63. Mark,

    I’m the webmaster for TraderWizard and SecurityTraders and WinningStreak always knew that Sports Betting was more fair than the Stock Market but now you’ve said it, and very eloquently.

    I’ll devote WinningStreak.com to your plan and my time and resources.

    Regards, Aaron

    Comment by Aaron Day — November 30, 2004 @ 5:54 pm

64. Love it!

    You’ll have to get special exemptions from the casinos to handle the size of your bets. The sports books are operated as loss leaders to get people into the casino but they are not designed to handle huge amounts of money. Furthermore, they simply stop offering certain types of bets if they lose money on them.

    For instance, In 2002 Golden Nugget stopped offering regular season over/under win totals in for NFL after their best season was an $800,000 loss. They couldnt set the win totals properly (i.e. San Fran Niners to win over or under 5 games this 2004 season is good example) so they just quit offering the bet. the pros kept cleaning their clocks!

    I think your point on local teams is great one. Getting an edge is easier with local teams/small cap companies where you can have an edge vs. the national point spread setter (generalist small cap portfolio manager) responsible for setting lines every day and unaware of nuances with an obscure team. Again you run into a liquidity problem - you cant get enough money down on the game and you dont have enough dumb money betting Miami of Ohio basketball on a monday night so the casino cant lay off your bet. At some point the casino will just stop taking bets.

    I think you can get this edge in small cap stocks because

    1)you can get that same knowledge level through conducting primary reasearch through gerson lehrman (you should buy them) tlaking to doctors about drugs or purchasing managers about retail and

    2) you can get enough money down on your bet to justify running a $1B fund and still stay in small cap land

    3) Enough dumb money to take other side of bet. Tons of small cap long only managers who have to follow 1000-2000 companies by themselves with no specialist anlaysts to help get expertise on specific sectors. They cant possibly know as much as hedge funds who hire analyst to follow 50-100 names only. But there are enough mutual funds, long only, (with approx $6 trillion in assets vs. maybe $800B-$1trillion in hedge funds) to where you have the dumb money to take the other side of your bets. i.e. Krispy Kreme (KKD). Hedge funds shorted for years and finally won the bet while growth funds owned it and took the other side of the short bet… and lost.

    Best of luck - would love to talk abou this. Mavs fan, Dallas native stuck in NYC waiting for Knicks to get beaten down on the 21st! out

    Comment by AlexNY — November 30, 2004 @ 6:00 pm

65. Hi Mark,
    All these people looking for your money Mark!All these “so called” experts. I’m only an expert in software development, so I can’t help you. Good luck though in your venture!

    Comment by Michael — November 30, 2004 @ 7:03 pm

66. Cuban,

    Of all these posts I’m surprised nobody has mentioned your sneak pat on the back to NFI. That and your proclamation of loving bonds. It makes me wonder how invested you are in the stock as it behaves somewhat like a high-yield bond without the junk (except when false and misleading information is printed about it by a certain supposedly venerable financial rag). Perhaps you mention it because it is consistently one of the top 10 most visited Yahoo stock message boards.

    Comment by NicholasK — November 30, 2004 @ 7:13 pm

67. I really like your idea, but i think that many others have had the same idea (and have been acting on it) for a long time now. Those people are well aware that gambling is a Zero Sum Game (actually worse because of the vig), and the only way to consistently make money is to consistently take it away from other players. So, the fact that “there really is far better information about your local sports team than there is about any local business in your market.” (your words) is not of primary importance. Of more relevance would be your ability to get information that other bettors don’t have.

    The most obvious strategy is to influence the outcome of an event after you place a wager on it. This is attempted, with varying degrees of success, in countless different universes. Insurace fraud is one simple example of that. An example in the news today would be the manipulation of the upcoming shareholder vote in Mylan Laboratories’ by hedge funds who have an economic interest in the result of that vote but no net economic interest in Mylan itself (much to Carl Icahn’s chagrin).

    Powerful people such as Yourself and Mr. Icahn just to name two, have a great advantage in their ability to influence outcomes. This is an area in which you truly have an “edge”: your own knowledge of what you intend to do in the future. I would guess that represents the best opportunity for those fortunate enough to be in a position of power. It is likely easier to hide your intentions and cover your tracks in areas outside of “Wall Street”, such as sports betting, and that might be the reason that your idea makes sense. The SEC, Elliot Spitzer, etc are watching the financial markets more closely than ever- why not move into an area which has yet to fortify itself against manipulation?

    Finally- your comments about the payout ratio are factually incorrect, and i would hate to think that some average joe is going to lose his money in Vegas because a billionaire gave him an erroneous lesson in stats. If you play a slot machine with a payout ratio of 97% or 98% for a long time, the Casino ends up with ALL of your money, not a mere 2-3% as you state. The 2-3% is the average amount lost by the player PER PULL on the lever.

    Your conclusion about the cost of placing bets using financial derivatives is based on your mistaken notion, so naturally the conclusion is mistaken as well. In fact the exact oppposite is true: Financial derivatives that are freely traded (such as the IBM options you mentioned) are extremely efficiently priced, and therefore are very inexpensive means of placing bets. It is harder than ever to make money trading these things because it is harder than ever to get a clear “edge” (legally or otherwise) over the other players.

    Anyway, best of luck with this- whatever the outcome, i’m sure it will make a splash

    Comment by no one important — November 30, 2004 @ 7:19 pm

68. Hey Mark,
    I’m a professional in the hedge fund industry and would like to make the following observation regarding your comments: you’re describing the sports bet market as having all the attributes of an efficient market (full transparency, availability of information, etc…) and the stock market as inefficient (low transparency, not enough regulation, etc…) however, smart investors make money in stocks PRECISELY because markets are inefficient, not the other way around. Since companies “massage” their numbers, don’t disclose all their information, traders get emotional, etc…good and thorough analysis can enable an investor to bet right on a stock, in essence “reading between the lines” of financial statements. If markets were efficient, all available information would be instantenously priced into a stock at all times, so there would be no opportunity to profit from msipricings (as hedge fund managers do).

    Moreover, markets that are more transparent (like global fixed income and currency markets) offer less arbitrage opportunities precisely because the information is available to everyone easily (anyone can look up US GDP on bloomberg).

    In any case, good luck with your fund, I look forward to hearing more about it!

    Comment by Jean-Philippe Odunlami — November 30, 2004 @ 7:50 pm

69. I am sorry but after reading these comments I had to go back and read the entry for the third time!
    I am amazed at how many people took it seriously!

    Comment by Amazed — November 30, 2004 @ 8:49 pm

70. Would not the league frown upon your involvement with a fund that very well may WAGER on NBA BASKETBALL?

    Comment by David Archer — November 30, 2004 @ 9:08 pm

71. I’ll make you more money than ANY hedge fund.

    Comment by David Online — November 30, 2004 @ 10:48 pm

72. Hi Mark … I am an aspiring professional sports bettor … Hire me because I’d work for free! P.S I just won 3rd place in a sports betting contest. Thanks.

    Comment by Marc — December 1, 2004 @ 12:21 am

73. what i love is the amount of people that are warning mark about the SEC, the govt, and david stern. call me crazy, but i think he has already taken those factors into account. but by all means, continue to point out things he already knows. and i’l get capt obvious’ car warmed up for the ride around town.

    Comment by John — December 1, 2004 @ 12:24 am

74. I am with the few people around that have posted. I think it’s Mark’s way of pointing out the craziness of buying into a Hedge Fund.

    I could be wrong, but I am pretty sure Mark is just trying to open your eyes before you leap into investments. I am with the minority on this one, its NOT REAL!

    Comment by Scott — December 1, 2004 @ 12:56 am

75. Mark,

    Great blog!! I read as often as possible and noticed that even Yahoo has taken interest in this entry, so now I am curious how much this trouble you stirred up with Stern..Let me know where I can sign up.

    JB

    Comment by Jbsmoothh — December 1, 2004 @ 12:56 am

76. I would recommend setting up or investing in a legitimate US-based futures exchange, by filing with the CFTC. Based on my research thus far, such an exchange would have to argue that the sport events-based futures/options contracts that people would hedge/speculate on are legitimate risk management tools for a significant number of enterprises. An endorsement from you in support of their CFTC application would be very meaningful to that exchange’s argument.

    sourabh niyogi

    Comment by Sourabh Niyogi — December 1, 2004 @ 12:58 am

77. Hey Mark, you like danger and adventure, how about investing in a sports car company? A car that can go 200mph, with a 2000hp, V-12 engine, and a million dollar price tag.

    Comment by Darryl — December 1, 2004 @ 1:01 am

78. Gambling has always been better than the stock market, Mark. When you lose in the casinos the dealer at least has the decency to look you in the eye.

    Good luck with Stern on this one.

    Comment by Jevin — December 1, 2004 @ 1:12 am

79. Hey Mark,

    I’m an investor for a well-known, multibillion dollar long-short equity hedge fund, and also a recent graduate of the Stanford Graduate School of Business, where, among other courses, I took a seminar taught by Justin Wolfers (see posting #31) entitled “Market Psychology, Behavioral Finance, and the Impact on Sports Betting Markets.” During this seminar, we were given access to an enormous amount of empirical data and asked to generate hypotheses on ways to make money in a “black box” manner based on numerous years of historical actual performance. I would be happy to share with you the examples that I have from this seminar, which I believe could be just the beginning of this idea’s potential. I would also encourage you to talk to Professor Wolfers directly on the subject (his research has been mentioned in Forbes, among other places). I have a passion for this subject and am convinced, based on this seminar that I took, that there are numerous ways to make money in a very inefficient overall sports gambling market. I have often wondered how I could raise the capital to start something like this, but have not considered it realistic to do it on my own. I would be interested in discussing it with you if you were interested. Feel free to reach me at any time to discuss.

    Comment by A Very Interested Reader — December 1, 2004 @ 1:31 am

80. Not sure if you are being facetious or not. If not, you might want to check out the above website. The guy is good, very good.

    Comment by Isaiah Micah Shiloh — December 1, 2004 @ 2:19 am

81. i cannot ascertain whether the hedge fund idea is something you actually plan on pursuing, or just a thought experiment to stoke discussion. my comments are based on the assumption that this is ‘real.’

    i am surprised that someone of your creativity and wealth would consider allocating time and capital to an idea that basically attempts to game a system. the money gained in a winning bet is money taken directly from a losing gambler minus the commission taken by the house. nothing is generated.

    the business opportunities that you have available, due to the wealth and status you have attained, are virtually unlimited. you could actually CREATE value and wealth instead of try to siphon off a few percentage points. if you are short of business ideas, you could start an incubator, or a venture capital fund. it seems to me that starting new businesses has greater long-term potential and will certainly be much more fulfilling for you and your associates.

    Comment by wiseGEEK — December 1, 2004 @ 4:45 am

82. First The Benefactor, now this?

    Try telling successful fund managers who have spent a lifetime returning amazing results that stocks are just “gambling”.

    The only people who make money off of gambling are bookies and casinos. Maybe you should look into investing in Las Vegas instead.

    Comment by Steve S. — December 1, 2004 @ 7:56 am

83. Gambling bets are binary events. You either win or you lose 100% of your wager (in most cases). It would be impossiple to properly hedge any bet when all you have are binary events which are not related to eachother.
    Another point…why would you want “perfect information” which everybody has? You would have no “edge”! There are too many articles about unsuccesful investors. The fact of the mater is that 90% of professional money managers are worthless. They add no value. There are, however, very competent investors that over the long term have consistent, outsized returns. Most people do not have access to these investors. Including the press.
    Mark, I’m a little dissapointed with the content in your blog. It sounds like something CNBC would write.

    Comment by Mark — December 1, 2004 @ 8:54 am

84. Hi Mark,

    I was pleasantly surprised to read your most recent blog entry. This past summer I created a betting hedge fund, complete with prospectus. Unfortunately I was unable to raise enough capital to start the fund. I would like the opportunity to send you my prospectus and speak with you further about your idea. As someone who has invested and worked on Wall Street, I strongly believe that it is nothing more than gambling. I think it comes down to which medium someone has a greater strength in…mine is sports gambling. I look forward to speaking with you further.

    Regards,

    David

    Comment by David Koroghlian — December 1, 2004 @ 10:15 am

85. Hi Mark,

    I was pleasantly surprised to read your most recent blog entry. This past summer I created a betting hedge fund, complete with prospectus. Unfortunately I was unable to raise enough capital to start the fund. I would like the opportunity to send you my prospectus and speak with you further about your idea. As someone who has invested and worked on Wall Street, I strongly believe that it is nothing more than gambling. I think it comes down to which medium someone has a greater strength in…mine is sports gambling. I look forward to speaking with you further.

    Regards,

    David

    Comment by David Koroghlian — December 1, 2004 @ 10:20 am

86. Mr. Cuban, there are wiseguys throughout Vegas making hundreds of thousands in sports bets each and every year. The perception is that the house always wins but their average return is only about 5% annually, by far the lowest out of any games the casino offers. The vast majority of this profit, like you mention, comes from a betting public that knows very little about the teams they bet on, often inflating lines by betting on favorites. Sure your Mavs are going to win the majority of the games they play this year, but will they cover 4,6 or 10 point spreads? Most of the betting public doesn’t differentiate between a cover and a win.

    The key to your project’s success is picking the right managers for this hedge fund. There is absolutely no program or model that will accurately predict winners 60% of the time. If such a model existed, there would be no betting market.

    The right handicapper needs to mix gut instincts with statistical analysis. Rely solely on the former and you’re no better than the betting public that perennially loses. Those that rely on the latter often miss the mental aspects or nuances of a game that go far beyond the numbers. Revenge games, fatigue, home or away are all difficult aspects to quantify.

    Lastly, a lot of people have mentioned starting your own sportsbook. Sure, it’s a profitable venture, but what’s more enjoyable than being the underdog and going after the house??

    Comment by VC — December 1, 2004 @ 10:27 am

87. Hi Mark,

    I was pleasantly surprised to read your most recent blog entry. This past summer I created a betting hedge fund, complete with prospectus. Unfortunately I was unable to raise enough capital to start the fund. I would like the opportunity to send you my prospectus and speak with you further about your idea. As someone who has invested and worked on Wall Street, I strongly believe that it is nothing more than gambling. I think it comes down to which medium someone has a greater strength in…mine is sports gambling. I look forward to speaking with you further.

    Regards,

    David

    Comment by David Koroghlian — December 1, 2004 @ 10:28 am

88. Hi Mark,

    I was pleasantly surprised to read your most recent blog entry. This past summer I created a betting hedge fund, complete with prospectus. Unfortunately I was unable to raise enough capital to start the fund. I would like the opportunity to send you my prospectus and speak with you further about your idea. As someone who has invested and worked on Wall Street, I strongly believe that it is nothing more than gambling. I think it comes down to which medium someone has a greater strength in…mine is sports gambling. I look forward to speaking with you further.

    Regards,

    David

    Comment by David Koroghlian — December 1, 2004 @ 11:05 am

89. Hi Mark,

    I was pleasantly surprised to read your most recent blog entry. This past summer I created a betting hedge fund, complete with prospectus. Unfortunately I was unable to raise enough capital to start the fund. I would like the opportunity to send you my prospectus and speak with you further about your idea. As someone who has invested and worked on Wall Street, I strongly believe that it is nothing more than gambling. I think it comes down to which medium someone has a greater strength in…mine is sports gambling. I look forward to speaking with you further.

    Regards,

    David

    Comment by David Koroghlian — December 1, 2004 @ 11:12 am

90. Mark,

    This looks like a good idea, would be interested in seeing how this comes out.

    Comment by Shawn Murrell — December 1, 2004 @ 11:25 am

91. So I’m driving home yesterday and the News and Weather together comes on. What do I hear? Mark Cuban’s name and this blog entry. Granted it must be news as I live in Reno, NV and we welcome any taxable revenue, but I was interested to see what other networks/locations broadcasted such a small item.

    Comment by Patrick Crofoot — December 1, 2004 @ 11:55 am

92. After putting 100g’s on black 31 bc I’m a pro at what I do, I love the idea of bellying up to the cashier at Horseshoe and looking the fat slob dead in the eye and saying,”Listen here jerkey, yeah you, you sloth,”
    then with my dead sexy smile whisper,”I’m with the Gambling Fund, I don’t want any sudden moves. Give me a mil large for my hard work, and a pen to make sure you’re not pulling any funny stuff.” When the greaseball returns the favor, tip him a GDubya, spit in his eye, and reassure him,”I’ll be back punk.”

    Cubes, I own black 31. Sign me up!

    Comment by Medman — December 1, 2004 @ 11:59 am

93. Hi Mark,

    I was pleasantly surprised to read your most recent blog entry. This past summer I created a betting hedge fund, complete with prospectus. Unfortunately I was unable to raise enough capital to start the fund. I would like the opportunity to send you my prospectus and speak with you further about your idea. As someone who has invested and worked on Wall Street, I strongly believe that it is nothing more than gambling. I think it comes down to which medium someone has a greater strength in…mine is sports gambling. I look forward to speaking with you further.

    Regards,

    David

    Comment by David Koroghlian — December 1, 2004 @ 12:05 pm

94. Might be interested to read “Bringing Down The House” by Ben Mezrich–an account of how a team of MIT students trained in blackjack strategy sucessfully beat Vegas over the course of several years, making millions of dollars for their investment backers.

    Comment by AW — December 1, 2004 @ 12:08 pm

95. Seems they do come out of the woods when a Billionaire speaks of spending money on some bet… Personally Mark, to me the only sure bet is the one we make in our families.

    Christopher
    http://www.lostinamerica.blogs.com

    Comment by LostInAmerica — December 1, 2004 @ 12:31 pm

96. I actually think Mark STOLE these ideas.

    I just finished a book called “Investing in College Basketball” that contains EXACTLY the same arguments. (I got it from Amazon).

    The book talks about investing in college basketball as a stock market where you know more about the stocks than anyone else. Where most of the other investors are amatuers, not professionals. Where there are few frauds like Enron, Marsh, WorldCom or HealthSouth to tank your portfolio. Where investment gains come immediately, not after years. Where there are dozens of brokers keeping commissions low.

    The book also goes into information availability and different kinds of bets (first halfs, second halfs, interactives, etc.)

    Mark, you and the author are so in sync. He should be the manager of your fund!

    Comment by Barry — December 1, 2004 @ 1:21 pm

97. Mark-
    I have been a ’stockbroker’ or a ‘financial adviser’ (for lack of better descriptions) for the last 13 years. Wall Street makes me sick. The average person, who my whole business is made up of, has NO shot in the stock market, and only a decent shot in growth/value funds. I will not let any clients of mine own a stock. There is not one publicly traded company that cares about its shareholders. Look at the shareholders of WCOM and KMart after they declared bankruptcy. They were left with nothing. Now KM has gone on to make a lot of people huge money — except the original shareholders, typically the little guy. Anyone with any knowledge got out prior to the BK.

    The reason that I say most investors have a decent shot in funds, if they own the right ones and there is such a thing, is because the marketing machine of Wall Street does not advertise the ‘best’ funds. Most of the better funds do not advertise, because they do not want the expense, because it costs the shareholders in the long run. However, most clients are not smart or logical, only emotional. They only want to buy what they see advertised and that is typically the garbage product only produced so the fund company can make the huge money. So after many years in business, my book has low turnover because I have fought the uphill battle of teaching, teaching, and teaching my clients to stay on the right track and not to flip in and out of the hot funds.

    The other half of my book is in bonds. And guess what? Within my industry, I was not looked at fondly by my brokerage house because I did not flip clients around, I bought either no-load or C shares, and I had a lot of clients in their 30’s and 40’s in bonds — which are investments that firms don’t like unless you are trading them. All firms want brokers to produce commissions at any cost to the client. We are taught that “moving money around is the name of the game”. I reject that logic entirely, which is the reason that I do not, and will not, work for a large firm.

    It is good to read your sane comments regarding Wall Street because I feel the same as you. Wall Street, CNBC, CNNfm, Rukeyser, and all that crap makes me sick that my normal, ‘hardworking Americans’ have to be subjected to those talking heads without any real desire to give objective, sensible advice.

    Ted Baturin

    Comment by Ted Baturin — December 1, 2004 @ 1:27 pm

98. Well…say what you will but, Mark Cuban sure knows how to create a buzz. I see USA Today has picked up on this and CNBC is prolly on the phone as we speak trying to line up Mark for a comment or a future Squawk Box appearance. And perhaps ESPN’s “Outside The Lines” is holding on Line 2.

    Oh…and by the way…who would run this fund…Kwamie Jackson ? Too funny !

    Lots of great posts though. The post (I think it was AlexNY) wrt “liquidity problems” was one that I had considered. It would seem betting large sums and moving money in and out would be difficult if not impossible. Not to mention the “footprints” that would be apparent to those that watch the action closely. If you think the hysteria created around MAMA.com, when it was learned that you were a BIG investor was bad…imagine what it might be like in a …ah hem…”gambling” environment.
    Oh well, I’ll continue to read with interest. It is a cool idea.

    skyfisherman

    Comment by skyfisherman — December 1, 2004 @ 1:52 pm

99. Mark… Great idea! Please let me know if you’re looking for help in this venture. I used to work with a guy who managed a futures fund. On the side we ran an NFL betting fund for his friends/family etc… totally legit, betting in Reno casinos. In the three years I worked with him our NFL fund return was greater than that of the futures fund. I’m now a satellite insurance underwriter but would relish the opportunity to get back into the NFL Fund Management business.

    jdclark@thegrid.net

    Comment by James Clark — December 1, 2004 @ 2:25 pm

100. Well…say what you will but, Mark Cuban sure knows how to create a buzz. I see USA Today has picked up on this and CNBC is prolly on the phone as we speak trying to line up Mark for a comment or a future Squawk Box appearance. And perhaps ESPN’s “Outside The Lines” is holding on Line 2.

     Oh…and by the way…who would run this fund…Kwamie Jackson ? Too funny !

     Lots of great posts though. The post (I think it was AlexNY) wrt “liquidity problems” was one that I had considered. It would seem betting large sums and moving money in and out would be difficult if not impossible. Not to mention the “footprints” that would be apparent to those that watch the action closely. If you think the hysteria created around MAMA.com, when it was learned that you were a BIG investor was bad…imagine what it might be like in a …ah hem…”gambling” environment.
     Oh well, I’ll continue to read with interest. It is a cool idea.

     skyfisherman

     Comment by skyfisherman — December 1, 2004 @ 2:38 pm

101. i’m currently an analyst at a nyc investment firm and i have one question. how do i join?

     Comment by Sang — December 1, 2004 @ 2:40 pm

102. Enjoy!

     Date placed:
     Dec 01, 2004 3:24p Single
     Basketball - NBA Lines Total
     Game can be seen on YES, Comcast
     (701) New Jersey Nets vs. (702) Washington Wizards Over 184 Wed@7:05p

     Risk $1600.57 to win $1450.97

     Comment by John Camacho — December 1, 2004 @ 3:33 pm

103. “As someone who has invested and worked on Wall Street, I strongly believe that it is nothing more than gambling”

     The irony in this statement is almost blinding.

     Don’t you get it-that’s EXACTLY what he’s saying; they’re no different, the only “sure” things are bonds.

     It’s meant to prove a point people; take a deep breath and put away your money-making schemes; you’re not going to get rich here.

     He makes a very good point…

     Comment by Jesse — December 1, 2004 @ 3:33 pm

104. In response to Ted Buturin’s post:

     I agree with you wholeheartedly about brokerage firms, money managers and the entire “promotional” complex. David Swensen, the CIO of Yale’s endowment fund, remarked at a Congressional hearing last year that there are about a dozen mutual funds worth investing in. Hyperbole aside, I think that he’s absolutely correct. However, taking isolated events such as KMRT and applying them to the whole of the equities market is an extreme and logically flawed position. You can’t be an uninformed active investor or trader and expect to make money. It’s that simple. I certainly feel for pre-Chapter 11 KMRT common holders, employees who lost their jobs and others impacted by the restructuring. But you could just as easily have purchased the bonds (along with Eddie Lampert and Marty Whitman) before the filing, which were converted to common post-filing. Tyco, Enron, Worldcom and other cases of corporate malfeasance and outright fraud do little to inspire investor confidence in corporate America. But the majority of managements don’t engage in fraudulent activity and are concerned most with maintaining and growing their enterprises. There is usually money to be made somewhere in the markets (long or short), whether through investing in equities, fixed income, real estate, currencies or commodities. If you are convinced that the average investor doesn’t stand a chance in choosing individual equities, then you may want to consider an ETF portfolio for your clients that is automatically rebalanced on an annual or semiannual basis, a service which one major online brokerage firm currently provides for 50 basis points/year.

     Comment by Steve — December 1, 2004 @ 3:46 pm

105. I would like to invest in your fund… except I am broke right now. I always lose money in Vegas, anyway
     -Q of S

     Comment by Queen of Sky — December 1, 2004 @ 4:07 pm

106. Interesting concept. I know there are loads of us already out there tring to make a buck by gambling on sports. I came acroos an interesting site a while back to help the budding gambler get an edge, you may find it helpful. http://www.covers.com.

     Comment by Sean — December 1, 2004 @ 4:21 pm

107. MARK CUBAN !!!
     I read your comments in the newspaper and you are on to something.Seldom have the resources of a billionaire been applied in the sports betting business.Some of it can be coupled with your specialty COMMUNICATIONS.
     I have owned 2 premium SPORTS BOOKS.In my career I have been a pioneer on the bookmaking side,most notably in the field of halftimes.
     Now I am strictly involved only on the player side,but since my chance of getting to speak to you directly are not good,I will put a few ideas for the WORLD to see,you will have my E-MAIL and my identity can easily be confirmed.I spend half the year in NYC and half the year in Vegas and can present a list of concrete proposals in a days notice.

     AS A HALFTIME EXPERT
     I can give you a concrete example.
     The NBA games and major universities are under tremendous scrutiny.
     BUT
     when SIENA plays NIAGARA
     and it is not on TV
     IF THE LINE IS 8
     and NIAGARA is up by 4
     4 will be the 2nd half line !!! PERIOD
     even if 3 Siena PLAYERS leave on crutches and 3 have 4 fouls.
     COORDINATING a group of kids to attend every game and getting quality halftime reports and charting the success of the reporters ,we could form a network with shrewd observers,and destroy the very weak market.
     I have 5 employees and on a small scale we are destroying it.

     RADIO LISTENING ROOMS
     between real player and Yahoo almost all college hoop and pro hoop are available on radio,almost all have pre game interviews with the coaches,sometimes a coach may say either his team is surprisingly banged up or they are going to change the tempo of the game ,making the total of the hoop game radically off.We could organize listening rooms after employees were trained what to listen for.
     They could have stats for the teams in front of them so they would be able to know if a player removed from a lineup would have an impact.
     on the PRO level injuries are the key factor
     it is an ankle and knee problem sport as ,extra long people go up and down on a hard floor constantly doing damage.
     There are many game time decisions.
     1 year Allen Iverson was questionable so many times they would make a generic 76er line.
     It would be 5 when it really was 3 or 7
     We could position ourselves to be first in that regard.
     Baseball is MY SPECIALTY
     with the vig half of what it is in foots or hoops,there are plenty of times where billionaire money when a market is 20-28 ,and we can lay all the 20’s and get the lines past 30 .Especially when we have the lineups first ,which to my knowledge ,I am already in possession of.I pay good money for that service but in 12 out of 15 games i usually have the lineups well before they are posted on Don Best ,which is the industry standard.
     While some of the work I have done with pitchers I consider to be unremarkable ,I have detailed offensive studies which really predict vs the spread how teams will produce.
     Much of what is important in a baseball game as described in MONEYBALL and confirmed by owners who are hiring GM’s to acquire the right type of baseball can be applied.
     Their formulas are based on getting players who provide production on a per season or multi-season baseball,they key betting baseball day by day is to isolate it with a degree of accuracy on a GIVEN DAY.
     I will tell you that on May 26th when trying to bet game 44 a player is who he is
     on a LONG TERM INTERVAL
     over who he is on a short term interval.

     I already have computer guys on the payroll
     and everyday players are fit into a grid and team offenses on a given day vary differently to the spreads.
     There are times when I have a GAME RATED DEAD EVEN

     where you are able to take $ 1. 60
     In a meeting I will show revolutionary baseball ratings.

     I can tell you
     I could not coach a basketball team
     I could not coach a football team
     I could MANAGE a baseball team.

     Anyway those are some concrete suggestions
     I hope someone is in charge of getting this message to you.
     IF you E-Mail me I can pass on relevant information so you can verify my identity before going further.

     Comment by skybox — December 1, 2004 @ 4:41 pm

108. Wow. Betting on sports. Why didn’t I think of that? It is rumored that I have some knowledge in this area. Where do I submit my resume?

     Charlie Hustle

     Comment by Pete Rose — December 1, 2004 @ 4:46 pm

109. As much as I love your other views (esp the trashing of Trump who I have derided as a fraud for 20 years) this gambling hedge fund will end in disaster. First off, the stock market is NOT a zero sum game as gambling is. Sure, there a lots of idiots who buy shares in fly-by-night stocks that pay no dividend on just the hope a greater fool will come along. So what? Does that mean you have to lower yourself to literally gambling with a fund? Makes no sense.

     The likelihood of the entire planet ceasing to buy a Coke product for 6 months and cratering the stock to zero is nonexistent. The likelihood of Manning getting up on the wrong side of bed and getting completely killed in a supposedly easy game is FAR more likely.

     Further, your involvement in the NBA will preclude you from getting involved in this AND good luck finding a book to take the kind of size you are going to have to throw around to make this venture worthwhile. The stock market is hugely liquid - sportsbooks are not. Wait and see how you move the line with just a relatively small bet.

     I have been a bookie for 5 years and not ONE of my customers has made money. And they have all the information in the world. Nothing can protect against a crazy outcome (Bucs vs Colts on MNF last year, the Pistons brawl stopping the clock with 45 seconds left and dooming the people who bet the over by 3 points, etc, etc)

     I suspect this is all tongue-in-cheek to point fun at what a casino the stock market currently is at its wildly overvalued level. Of course, it was dupes like these who made you rich.

     If this ever does get off the ground (which I highly doubt) I am willing to publicly wager you $20,000 that your five-year returns will be negative. Sincerely Matt Beauchamp 407-340-2405 - I am serious about the bet.

     Comment by Matt Beauchamp — December 1, 2004 @ 4:48 pm

110. I LOVE this idea. I’ve been a sports gambler for the better part of 2 years, following strict money management strategies. Honestly, it’s been like stealing. With this success, I’ve truly given consideration to establishing a fund (obviously on a much smaller scale) and managing the money through sports gambling “investments.” You’ve beaten me to the punch, and on a MUCH larger scale. So…do you need an analyst? It would be my dream job!

     Comment by Bob N. — December 1, 2004 @ 4:53 pm

111. If you’re really serious about this offer, email me… my record is, in fact, documented & I’d be more than happy to share it with you.

     Comment by David Wilson — December 1, 2004 @ 5:39 pm

112. Mark,

     I don’t know if this idea is better or the buzz you are creating. I do believe there is money to be made and do know one person that does make money gambling on sports. I try to learn from him as much as possible. I have been gambling on and off for the past 8 years and overall I am down of course. What has changed for me though in the last 3 months is the knowledge I have gained from this person. And my returns have been very good.

     Picking your managers will be very difficult. So many people throw up smokescreens when it comes to gambling. I like to equate pick services to stock brokers. You should never higher anyone that has had anything to do with a pick service. They are constantly ripping people off just like brokers are everyday.

     Comment by Joe — December 1, 2004 @ 5:48 pm

113. As you mention in your posting, most recreational gamblers go to Vegas expecting to lose, and when it comes to sports gambling, it’s no different. They bet the games to “up the ante” and/or make their viewing experience more interesting, but over the long haul, very few should expect to win any money. As with blackjack players and slot addicts, the thrill is the action, not the potential payoff. For that reason, if you started a fund like this, it would be essential that each “investor” be aware of each bet that is placed by the fund. Additionally, the rules by which both casinos and offshore gambling establishments operate prohibit bets above a predetermined maximum ($5,000 to $10,000 in my experience). As you are aware, any reputable sportsbook knows that wagers above this amount would only attract “smart money”, and that’s exactly what each hopes to avoid. For that reason, if you were to raise a hedge fund of any significant size, how would you lay off bets? In other words, if you’re running a $100 million fund, it’s futile to go around placing $10,000 wagers, all of which have very little impact on the return to your “investors”. Not to mention the built-in “vig” of 10% that you pay on losing bets. If you run the numbers, you have to pick something like 56% - 58% of your games correctly JUST to break even… That’s hardly a slam dunk in my book.

     Comment by TES — December 1, 2004 @ 6:01 pm

114. hmmm, so….. how can a reg joe get his mits on this….. may be a way to finally have my ship come in, lol

     Comment by Big Jim — December 1, 2004 @ 6:07 pm

115. Well Mark you will need to invest in something new once you loss all your money in Charter (CHTR). Amazing to me you still own that stock while Paul Allen your moron of a friend screws the shareholders everyday. Only problem with sports betting is the fix is just as bad as Wall Street. Even if you use tradesports you’re still going to have no advantage. Market makers use overs and unders for a reason. That’s the problem with sports betting. I can always figure out roughly who will win, but can I beat the fixed and manipulated odds? Good luck, you’re going to need it. Your not the first person to think of this either, hedge funds are already doing it with tradesports. They bet on more then just sports as I am sure you know.

     Comment by roberto pedone — December 1, 2004 @ 9:11 pm

116. Don’t take betting advice from John Camacho.

     Enjoy

     Comment by Scott Patterson — December 1, 2004 @ 9:37 pm

117. If this is a serious proposal, I have to echo the suggestion that you’d probably be better off working as the House. The problem with the player side of the table is that it doesn’t scale well. The casinos won’t let you make big enough bets to get a decent ROI once your bankroll is more than a million or so. Only a few casinos allow really big bets, and they keep close track of the big players, eventually barring the biggest winners even if they can’t figure out why you won.

     My game of choice is blackjack, and I was on a team with a 6-figure bankroll some years ago. Now I’m listed in the Griffin Book and mostly can’t play under my own name. Blackjack might work for your venture if you could recruit and train a continuous stream of new faces, but quality control is very difficult. It takes a while to develop the necessary expertise and you need to make sure your players are playing well even when you aren’t watching them. Your players can’t all use the same strategy or the same betting range or be seen together. And at the larger stakes, when you get barred at one casino they send the picture around everywhere else too.

     Still, it’s intriguing. Teams do have a huge advantage over individual players if you can make it work.

     Comment by Glen R — December 1, 2004 @ 10:10 pm

118. Obviously this is a joke now that I think about it. He just cant do this without issues with the league. But I am pretty amazed at the ranking this thing received on google in just a matter of days. 2nd page on a search for “hedge funds”.

     I dont know what this Weblogs company is that Cuban uses but methinks he done dragged us all over here to see his nifty blog! I like this blog setup better than blogspot. So I tried to get myself one and couldn’t……so whats the real deal here? Trying to attract Hedge Fund capital for this blogging company?????

     :0)

     Good luck, feel free to send me an email when Weblogs, Inc. starts letting us poor folk get this blog! If I am pretty close to why you posted this entry send me an email! You have generated more comments on this post than any other I think. Afterall, blogspot was bought out by google and blogging is all the rage now allowing people to bypass the media as well as participate in it.

     Comment by BB — December 1, 2004 @ 11:44 pm

119. Mark,
     For the first time I can’t understand the logic in your post. I’m assuming it’s a test because I think you know that the NBA would probably not allow you to pursue this venture. The way a person make REAL money from their investments is the VERY reason that you mention as the problem with investing in stocks - inefficient information. It’s that the majority is usually wrong and are too lazy to do the due dilligance to make an informed decision. When a situation arises where there is large amounts of information like sports betting, the difficulty in making money in such a venture is extremely difficult. You have to beat the juice and the spread - the people making the spread have access to all the information and more that you are talking about so the sports betting market works very efficiently. If you throw in the juice you are setting yourself up to lose 100% or make 91% on each investment. I doubt that you would put your money in any venture where the risk is 100% loss only to have the gain capped at 91% - you scored a much higher return with your business ventures.

     I’m surprised that you have brought this up as a viable venture. I’m even more surprised to see all these people thinking that this is a great idea. An individual makes money because the markets are inefficient not because they are efficient - every finance undergrad understands this - if efficient market theory holds true nobody makes money in the markets because it assumes that all the information is public. You have acknowledged that this is not true - therefore, there are more money making opportunities in the markets. Sports betting works more efficiently than the markets because of the vast amount of information out there so it’s logical that a gambler will have a more difficult time making money because they have to beat the spread which is a reflection of ALL that information.

     I hope that you were joking at this suggestion and look forward to you posting about money making opportunites in business and capital markets.

     Dan

     Comment by danj — December 2, 2004 @ 12:10 am

120. Ok, sorry for the double post, I currently run HedgeBlog at my website http://www.xhedgefund.com and this is my latest entry:

     Mark Cuban’s Hedge Fund Article
     I am extremely skeptical, more than skeptical that Mark Cuban, owner of the Dallas Mavericks is launching a Las Vegas style gambling hedge fund.

     He cannot do this without David Stern going ballistic on him! Just not possible.

     So after visiting his blog and reading the 100+ and counting comments I came to the conclusion that he lured all us hedge fund people over there to see his nifty blog. It was so nifty that I wanted to trade this one in for theirs!

     My snooping around led me to the company that hosts his blog. It’s a company called Weblogs, Inc. and he is the seed investor in that company. It appears that they are targeting their product to different niches and currently have 50 blogs up and running. This is not a blogger for the average person, it seems like it is invite only with editors to boot.

     With blogs all the rage, Mark Cuban just gave us a nice little demonstration of its reach and potential, better than anything he could do with a Powerpoint presentation. We’ve all been suckered by Mark Cuban! Now who wants to invest in his blog company because this was the best Powerpoint presentation on Weblogs, Inc. you could possibly give.

     Comment by BB — December 2, 2004 @ 12:11 am

121. Mark,

     The fund could get a lot of attention from institutional investors and large asset managers in the pension and endowment fund business, because of the diversity it could bring to their portfolios, as well as the superior returns.

     Bottom line is that “betting” is what the entire financial sector is in the business of. It all comes down to risk/reward. The controversy stems from the fact that most lay people aren’t going to understand it unless it is put in perspective. Sports and entertainment represents a huge sector of the economy and the synergies between it and the rest of the financial community have never been exploited. Good PR for this will be essential.

     The fund could actually be set up to be effectively self managing (by indexing the fund to existing odds boards in Vegas that already have visibility). This would dramatically reduce overhead costs at the same time. This reliability would help make the fund more attractive to large outside investors and would legitimize it to the public at large.

     I’m a 28 year old about to graduate with a Masters in Finance and Economics up here in Boston. I’ve become somewhat of a sports specialist on all of my class related projects (much to the dismay of my professors). I’ve come up with a proposal for the NHL to get back in gear through a bond securitization of their TV contracts and other revenues that could fetch as much as $10 billion for the NHL right away and countless millions for bankers…the project is still an academic exercise at this point. I’ve also done an econometrics project on football plays in the red zone…my results were reviewed by Bill Belichick and the New England Patriots.

     Anyway, I’d love to be associated with this at any level given that I believe it has the potential to become the first and most successful fund of its kind given the exposure that you could bring to the table.

     Comment by Brendan — December 2, 2004 @ 2:12 am

122. Why start this fund for other people to gamble with your money? If you want the best return for your investment, and want to be involved in gambling, buy your own casino.

     Comment by Andy — December 2, 2004 @ 10:04 am

123. Where would you get the volume to make this worthwhile? Sportsbooks don’t just take three million dollar bets. Their whole goal is to be flat, and just keep the juice. You could use tradesports.com or some other online futures market, but their isn’t enough volume there for a hedge fund of any size.

     You could start your own sportsbook, but then there are legal issues galore and if your lines don’t match up with other sportsbooks, people will only give you one sided action, a huge risk.

     I don’t think sports betting is scaleable, at least not now. I normally like what you have to say, and you never said how you actually plan place your bets but i find it hard to believe that you are serious.

     Comment by John — December 2, 2004 @ 10:24 am

124. Traditional gambling is great, if you know how to utilize the information and pick your spots you can basically just wait around and make tremendously positive EV bets. The only problem is, you’ll never be able to scale any operation to any significant size. Sure, if you get all-in AA heads up vs. AK in a game on NL hold’em, great for you, but how much could you possibly have riding on that bet? Let’s be extreme and say $1M.. a near worthless figure if you’re managing a small portfolio let’s say 250M. Same thing with blackjack or sports betting, you’re not going to find anyone who’s willing to give you action at any sort of significant level that you’ll have any sustainable edge in. The only plausible way to build a true fund would be to hire hundreds of the best gamblers in the world who could each manage a seperate bankroll of a few hundred thousand? million? the costs of which would be astronomical… provided you can identify (skill vs luck) and convince them to work for you.

     Comment by David — December 2, 2004 @ 10:54 am

125. Mark,
     Equating the “market” to Vegas simply means your working with the wrong Wealth Creation and Management Group. Send me an email and I’ll try to work you into my schedule.

     Comment by Walter Huzarevich — December 2, 2004 @ 11:29 am

126. Congrats Mark.
     This blog. just made the Front page on cnn.com

     you da man “carville”… “spinster”.

     Comment by Mike Verinder — December 2, 2004 @ 12:04 pm

127. This sounds interesting, if you’re serious. How are you going to recruit your players? Gamblers know other gamblers especially poker players, its part of the game. I am in and I know of a few others that are interested.

     Comment by Cory — December 2, 2004 @ 12:14 pm

128. I have some comments on the economic aspects of this topic over at my blog (click my name for the link).

     Sorry if this seems like a “promotional comment,” but I actually do have some relevant thoughts.

     Comment by Jeremy — December 2, 2004 @ 12:16 pm

129. This is going to be very difficult to implement for a number of reasons:

     1. economies of scale…for “market”-type betting (sports, horses, etc), the more money you put in, the more you are moving the odds (payout) against you. There is a limit to your profitability due to this.

     2. Finding enough profitbale bets. For normal casino games, the casinos will move to eliminate any exploitable, provitable edge when it starts costing them enough money…this is why you now see reduced pay tables for video poker, continuous shufflers and no mid-shoe entry for blackjack, etc. Casinos will only allow so much money to flow out their doors until they put a stop to it.

     3. Sure, you could “employ” skilled people such as expert poker players or top sports hadndicappers. But to have them work for you, you would have to pay them MORE than they are making playing for themselves.

     In all, this is a much more complicated proposition than a lot of people seem to believe, never mind the regulatory and legal issues.

     There are some more comments here:

     http://offshore.ipbhost.com/index.php?showtopic=25309

     http://offshore.ipbhost.com/index.php?showtopic=25405&st=0&

     Comment by drunkguy — December 2, 2004 @ 12:46 pm

130. Comments 122, 123 and 128 touch on the biggest challenge you’ll face–that is finding a way to extract the inefficiencies in a scalable manner. It comes down to a combination software architecture, statistics and common sense engineering problem at the end of the day. The answer is a small team of experienced arbitrage traders who are versed in software development, sophisticated data analysis/mathematical techniques and a large measure of creativity and common sense. The entire investing process will need to be almost completely automated in order to make the economics work out. You won’t be able to afford much overhead either. It’s a lot of fun and very doable if you’ve the right skillset though.

     Comment by JM — December 2, 2004 @ 2:04 pm

131. Two amazing, simply amazing, aspects of the comments to Mark’s blog: 1) the “experts” willing to help! Goodness this man has proven his ability to make money, but these folks know more 2) Not one loser! Everyone who gambles beats the line 60% of the time, or outperforms the S&P for 10 straight years, or easily wins tens of thousands on sports annually. Let’s hear from the guy(s) who lost it all–their assets, their jobs, their families–because they knew winning was easy.

     Comment by Dennis Smith — December 2, 2004 @ 3:08 pm

132. I’d have to say that 10% of the “utility” of this, my first visit to blogmaverick.com, has come from the reading of Mr. Cuban’s article and the other 90% has come from perusing his readers’ replies. What a high winner-to-whiner ratio we have here (as opposed to say, your typical Yahoo stock message board). For instance, congratulations to Patrick Muldoon from post 26 whose worst year since he started sports betting in 1995 was a $16,000 gain. I just do stocks and not sports and wouldn’t have thought such consistent winnings were possible in the latter arena; my visit to this blog has been a heads-up. On the other hand, shame on broker Ted Baturin (#96) for having such a defeatist attitude…

     “The average person, who my whole business is made up of, has NO shot in the stock market, and only a decent shot in growth/value funds.”

     I venture to say that your experience with your customer base is not representative of the entire universe of investors and