Betting on basketball akin to investing.

But after spending most of Thursday watching college basketball at the Paris Casino’s sports book in Las Vegas, I can safely say that betting on the NCAA Tournament has a lot in common with investing in stocks.

Savvy strategies

Odds for the Oscars

Speaking of auditing, the fact that stats in college basketball cannot be manipulated is actually a reason why betting on a college basketball game might be a wiser move than buying a stock. What if I bet on Penn with the spread and they don’t win but lose by only three? Would it make me happy to profit from a Penn defeat? This is too disturbing a thought to consider any further.

Hoops junkies pore through the stats published in the USA Today college basketball special pullout section (an essential purchase for any NCAA fan) with the same amount of rigor that accountants use to audit financial statements.

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(Disgruntled writer’s note: As it turned out, my fears were for naught. I maintain that getting too emotional about a stock is not a good thing. Kind of like the way VCs invest in many risky companies with the hopes of having one big initial public offering make up for all the flops, I made several “money line” bets on huge underdogs. Instead of P/E ratios and mutual funds, you have “point spreads” and “parlays”. So I did not hedge. You don’t have to worry about whether or not Duke coach Mike Krzyzewski set up special purpose entities in order to keep some of star player Jason Williams’ turnovers off the stat sheet. Gandalf, baby!”

My friend, being a prudent lawyer, decided to bet $22 dollars on Pepperdine’s opponent, Wake Forest. OK, there certainly has been some point shaving in the past – – the City College of New York scandal of the 1950s comes to mind – – but that doesn’t even come close to the scam that was Enron.

With that in mind, I have no idea what to do when my beloved alma mater Penn plays California on Friday. (Go Quakers!) Part of me wants to bet big on Penn (they were four and a half point underdogs as I wrote this) so I can reap the financial rewards when they win. Pepperdine was competitive for the entire game but missed some crucial shots in the last few minutes (the bitter loser in me would say that they choked) and lost by eight.

Moulin Rouge was listed at 3-1 to win Best Picture: the second favorite behind A Beautiful Mind. “Best bet on the board?” observed my friend Jamey Tesler, “Ian McKellen for Best Supporting Actor at 6-1. A friend of mine and I placed the same $20 bet on a 3-team parlay: Kent State, Missouri and Pepperdine. Penn didn’t cover, losing by 7 after this story was published. You can’t actually make bets – – they’re only for “entertainment purposes” – – but many of us were left scratching our heads about the favorites for the major awards.

Betting on sports is legal in Nevada and most of the casinos in Vegas have a section called the sports book where people place their bets and watch the games. (The spread is the number of points that the favored team is expected to win by while parlays are wagers that allow you to bet on several games in order to increase your payout.) And just as a market neophyte would be confused by a streaming quote feed, the rows of neon numbers on a sports book’s massive board is certainly overwhelming for the uninitiated.

Why betting is better than investing

In addition to the NCAA action, you can also get odds for the Oscars. Hey, I actually thought the Waves would win the game outright (similar to how many investors were convinced back in early 2000 that tech stocks could only go higher and higher) and even have a chance of upsetting Oregon in the second round. Kansas (boy did Holy Cross give the Jayhawks a scare!) isn’t going to announce that the NCAA is investigating it for improperly recognizing hundreds of points scored in Big 12 games from 1999.

All in all, I made six bets on Thursday and won none, for a total loss of $100. Grrr)

When it comes to sports, the numbers for the most part don’t lie. So it would essentially be a wash.

Like investing, gambling has a lingo that you need to learn in order to be successful. All three teams had to cover in order to win the bet, which paid off at odds of 6 to 1. It was totally irrational. Sounds exactly like the trading floor of the New York Stock Exchange.

That’s what sleep deprivation does to you folks.

Most of my friends and fellow gamblers that I talked to would stick to betting on games with the spread but I foolishly followed the venture capital style of investing in college basketball. Example. If Pepperdine covered, we’d both win $120.

I, however, was not so wise. Fortunately, a $100 windfall at a blackjack table that day kept me even for the day. It’s kind of like making a covered call on an option, selling the right to buy shares at a certain price while also having a long position on the stock.

Betting on basketball isn’t even as risky as you might think. Pepperdine, a 4-point underdog, played after these two games were finished. But I, hate to admit, am a bit of a hypocrite in this regard.

It would have been nice to be able to make real bets on the Oscars though. Kent State and Missouri both covered. If Wake Forest won by more than 4 points he would lose his parlay bet but win $20 on the Wake bet. Betting the money line means you think a team will win the game outright, regardless of the spread.

LAS VEGAS (CNN/Money) – This will be blasphemy to hardcore followers of Wall Street, those who think of the market as a rational way to try and accumulate wealth. Huh? Ewan McGregor singing Elton John (quite badly I might add) is more worthy of the cinema’s highest honor than The Lord of the Rings, Gosford Park or In the Bedroom? Whatever.

. I was convinced that Pepperdine would cover. I occasionally get angry emails from readers who disapprove of negative comments I make about stocks they own. Just goes to show that you can’t discount the importance of luck any time you put your money to work.

I reacted quite angrily any time one of the CBS announcers said a bad thing about a team I bet on. But another part of me is slightly worried. Some of the odds did seem pretty good. There are even ways to hedge and minimize your losses if you really know what you’re doing. When the color commentator pointed out that Tulsa is a small team, I probably did not need to act as if he was insulting my mother.

There’s also the emotion factor. A sports book during the height of March Madness is a wild, profane, testosterone-charged pit fueled by greed and fear

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