Due to Instability Gambling is the best Model for most Financial Products

Galiya Klinkova, Michael Grabinski


In financial markets the demand curve is positively sloped in most cases. We give a rigorous mathematical prove that this leads to an instable equilibrium price. Therefore stock prices may fluctuate chaotically, making them unpredictable in many cases. Financial investments have therefore lots in common with gambling. In order to take the analogy further, we suggest a special gambling strategy (betting on a color in roulette). In doing so we have a model which may create a substantial amount of cash each year until it crashes after many years. Both gambling and financial speculation will never create money in the very long run. Because our gambling model is at least statistically predictable, it is “better” than speculative investment.


stock market; gambling; stability; chaos

Full Text:



Dziergwa, K.; Klinkova, G.; Grabinski,M., Why a Financial Transaction Tax will not hurt anybody. The Clute Institute, 2013.

Schefczyk, M. (2012). The Financial Crisis, the Exemption View and the Problem of the Harmless Torturer. in: Philosophy of Management, Special Issue 'Philosophical Lessons from the Global Financial Crisis', Volume 11 (1), 25-38.

Appel, D.; Grabinski, M., The origin of financial crisis: A wrong definition of value, PJQM Vol. 3, 2011.

Appel, D.; Dziergwa, K.; Grabinski, M., Momentum and reversal: An alternative explanation by non-conserved quantities. Int. Jour. Of Latest Trends in Fin. & Eco. Sc., 2012. 2 (1): p. 8.

Klinkova, G., Chaos effects in business operations from warehouse location to marketing, UNED PhD thesis, 2017.

Saunders, E.M., Stock prices and Wall Street weather, American Economic Review, 2013. 83: p. 1337-1345.

DOI: http://dx.doi.org/10.14738/abr.53.3029


  • There are currently no refbacks.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.


Archives of Business Research; ISSN 2054-7404

Copyright Society for Science and Education, United Kingdom