But in truth, do we actually only support and watch soccer for the love of it or are we trying to make money out of it by betting on the matches. As we all know, gambling is a habit which is hard to cure. There are some people whom had gambled all their life and calling them to quit is like asking them to stop eating or drinking. It's almost impossible. Even casual gamblers would also come out in betting 1 or 2 matches especially to add onto the spices in watching the games.
When dark horses wins, these people were more than happy because of their pockets getting fatter and fatter. Can you imagine if South Africa team were to beat teams like Brazil, Argentina, England, France, Italy etc to win the World Cup trophy, how many of the bookies, gamblers would have laugh all the way to the bank?
I respect football and i don't find gambling on teams and then supporting the team you've bought is actual love for the game. You can be a England team Supporter but when it comes to football betting, you'll bet on whichever team that has the slightest chance to beat your favorite England team. Then when they wins, your wallet becomes heavier.
Well, you will be surprised as i am when you find that I'm able to link this World Cup event to the financial stock market.
It is statistically shown in the past that when this event command a bigger arena to people that wanna pool their money to make some winnings. So much so that the stock exchange actually sees a unexplainable decline in trading volume during these World Cup period. As such, Analyst comes out with different explanations like World cup comes, trading and stock exchange will under-perform. As there's this saying: "A picture speaks a thousand words"
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The chart above shows the Straits Times Index (STI) in 2006, where the last world cup took place. And as you can see, there was a sharp dive in the index near the end of May and the start of June. The index then continued to rebound in July, Coincidentally, where the World Cup event happens to end. And this pattern can also be found in the 2002 chart below.
Of course, you may ask why is there a down-trend after a rebound in July and I've linked the main reason as possible events leading to SARS which eventually sees the index declining and Market being swept into a recession as i had remembered when i was still a secondary school student during that period.
So, historically, we have seen that STI generally declines during the month of June and just today, I've received an email from my broker that volume in June for the world cup event dropped by average of 20% during the past 3 world cup from 1998 to 2006.
My view on this is that if you are a person with higher risk appetite, you may want to consider shorting the Singapore Exchange stock (SGX) which is directly linked to the Straits Times Index.
Of course, Entry and exits rules applies if you are up for it.
Of course, we are still in a volatile situation which so far, still keeping us in the 'recovery' stage from a recession. So, if the STI suffers another sell-down, recovery back in such turbulent times could be slower or this 'sell-down trend' could even lead to the start of a recession for all you know.
So, consider that if we're Short selling the market, And in the event that the market turns into a recession (defined as a consecutive 2 period of under-performing results), we are in the trend for a longer run!
But even if the market rebounds, setting a profit protection could also net you some gain during this joyous event where everybody is happy just to be able to see your favorite international stars battling out for the prestigious trophy.
Of course, this is a trend that can be monitored and i shall continue monitoring the situations and keep everybody posted here. I shall also end this post with a declaration to the Universe:
"My money works hard for me and Make me more and more money!"
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