With the recent S&P 500 pullback from the Feb 19th peak, it’s a perfect time to revisit one of my favorite scenes from Casino (1995).
Robert De Niro’s character, Sam “Ace” Rothstein, is the best handicapper in the sports betting world. He understands “the edge” – the statistical advantage that ensures long-term success. In the movie, somewhere within the first 20 minutes, Ace explains how casinos always win over time. No matter how lucky a gambler gets in the short term, the house always comes out ahead because the odds are in its favor. The longer a player stays at the table, the more those odds work against them.
Here’s a quote from Ace that summarizes it all, “That’s the truth about Las Vegas. We’re the only winners. The players don’t stand a chance.”
It’s all about having the statistical edge and TIME.
And that’s exactly how investing works. The longer you stay invested, the more likely you are to come out ahead—because the odds are stacked in your favor, just like a casino.
The House Always Wins – And So Does the Patient Investor.
Casinos don’t rely on a single big bet to make money; they count on volume and time. Each blackjack hand, roulette spin, or slot machine pull has a tiny statistical edge for the house—maybe just 1-2%. But over millions of bets, that edge guarantees profitability.
The stock market operates the same way. No one trade or short-term move makes you rich. But over decades, investors who stay in the market see the advantage play out in their favor.
The key? Be the casino, not the gambler. A diversified, long-term investor increases their chances of success the longer they stay invested—just like the house increases its profits over thousands of hands of blackjack.
Short-Term Gamblers vs. Long-Term Investors
The worst way to approach the stock market? Like a gambler.
Some investors speculate, trade impulsively, and chase quick wins. If they get lucky, they start believing they’ve found the secret to beating the market. They double down, take bigger risks, and convince themselves they’re outsmarting the system.
And maybe they do win—ONCE. Maybe even a few times.
But over time? The odds turn against them. They always do.
Casinos are designed so that any temporary advantage a gambler has is eventually neutralized by the house’s small but consistent edge. No matter how skilled or lucky a player is in the short run, the house always collects its share.
Litmus test: Have you ever seen a Las Vegas casino go out of business because too many people won money? Didn’t think so.
Now, think about investors who claim they’ve cracked the stock market code—jumping on meme stocks, timing the market, or diving into complex strategies they barely understand. Any success they have is temporary because the market, like a casino, doesn’t care. Over time, their strategy collapses.
Meanwhile, successful investors play the role of the casino owner—they don’t chase individual bets, they own the system.
By staying invested in a diversified portfolio, avoiding reactionary decisions, and letting time do the work, they benefit from the long-term growth of the economy—just like the casino benefits from players staying at the tables.
The Stock Market’s “House Edge”
Casinos make money because they let probabilities play out over time. They don’t need to win every game—they just need to keep the doors open and let the math work.
The stock market works the same way. Some years are bad—recessions, crashes, corrections—but over time, the market has always trended upward.
Look at the S&P 500’s historical performance.
Here’s the breakdown:
Daily Returns: 53% positive (essentially a coin flip)
Monthly Returns: 63% positive
Quarterly Returns: 69% positive
One-Year Holding Periods: 74% positive
Five-Year Holding Periods: 86% positive
Ten-Year Holding Periods: 94% positive
Twenty-Year Holding Periods: 100% positive
Even daily positive returns are in line with a casino’s 1-2% edge—but look what happens as time extends. The longer the investment horizon, the better the odds. Over a 20-year period, the market has never lost money.
Be the House, Not the Gambler
Casinos make money because they control the system, not because they gamble. Successful investors do the same. They don’t chase fads or time the market; they stay invested, understanding that time is their greatest advantage. Just as a casino relies on the law of large numbers, investors rely on time and compounding to build wealth.
Ace Rothstein understood that the key to winning wasn’t playing the game – it was owning the game. The same applies to investing. Those who stay invested, diversify, and avoid emotional decisions are the ones who win in the long run.
In the stock market, as in a casino, the trick isn’t about getting lucky – it’s about playing the long game and letting the odds work in your favor.
Keep looking forward.
