The uniquely American annual experience crowned its latest Super Bowl champion. The Philadelphia Eagles football team earned their rightful place in American sports history for the second time since their 19331 inception. Admittedly, the Eagles won the National Football League championships prior to the 1967 Super Bowl conception.
The National Football League (NFL) has become the world’s highest earnings sports
league2 with some of the most valued sports teams3. No doubt, American football has become an industry in itself. If you listen to sports critics of late, you may notice an undertone of rigged sports or referees that may place their finger on the scale in favor of one team. For viewers of last week’s Super Bowl, such preferences did not seem to be present, or maybe the Eagles were such an overwhelming power that such rigging was ineffective.
Investment market skeptics have echoed similar sentiments. According to cynics, only corporate insiders or people in the know get preferential treatment. Though there is always anecdotal evidence to support unique circumstances, the Securities and Exchange Commission (SEC) remains vigilant for insider trading activity. For those caught, the penalties can include up to three times the profit gained or the loss avoided in addition to jail time. A high-profile case that still piques interest is the Martha Stewart conviction in 2004. (It’s hard to believe it’s been over 20 years!)
Insider information is defined as non-public material information, or information that sources have not publicly communicated and is significant enough to affect stock or bond values. Even if removed from the tipper or tippee, the best advice is don’t do it. The transparency and fairness of American financial markets are the envy of the world and violations are taken very seriously.
Having said that, financial markets favor investors. The objective of financial instruments is to produce yield or appreciation… in other words, favor investors. This does not mean that losses cannot accrue. Economic, market, and company dynamics can alter income or growth expectations, which is why monitoring investment portfolios and securities is so important. In aggregate, over the long term, the market is rigged in investors’ favor. The market cliché, “it’s about time-in-the-market, not timing-the-market,” is often ignored.
There seems to be a correlation between increased sports betting and finding reasons for “unfair” payouts. Maybe sports critics have internalized casino betting odds, which favor the house. The Philadelphia Eagles’ recent Super Bowl victory not only highlights their prowess on the field but also underscores the integrity of the game despite occasional skepticism about fairness in sports. Similarly, the financial markets, while sometimes viewed with suspicion, are structured to favor investors over the long term.
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