The markets rise. The markets fall. Some days you make money. Others you lose some. For investors it can often seem that Wall Street is one large casino where millions of Americans come daily to the gaming tables in search of their fortunes.

I have no doubt this view is true. My dictionary defines gambling as "to take a risk in order to gain some wealth." Herein lies the essence of investing, whether it be stocks, bonds or pork bellies. What sets Foolish investors apart from state lottery wannabes or slot machine aficionados is the odds. The odds of winning the stock market game can be approximated based on past market results. Unlike for the lottery player, the odds for a Fool are quite good. The long-term investor, using time-tested strategies, can feel confident that if he sticks with the game long enough, he should make money. A lot of money.

Many Fools have heard of Michael O'Higgins, but how many have heard of Edward O. Thorp? Mr. O'Higgins has become famous around these parts, of course, for his ground-breaking 1991 work Beating the Dow, in which he outlines how a strategy of sticking to those high-yielding blue chip stocks through thick and thin is a consistent winner. By following the system faithfully, without resorting to "hunches," an investor should beat the market in the long run.

Dr. Thorp is the O'Higgins of that other bastion of green pastures, that of the casino gaming tables. In 1962 the mathematics professor published his revolutionary work, coincidentally(?) titled Beat the Dealer. In this book he demonstrated convincingly that the game of Blackjack (known also as "Twenty One") can be defeated systematically through the use of mathematically proven card-counting strategies. In his work, confirmed and refined by others since, if one plays by the best unemotional strategy at the Blackjack tables, in the long run one will make money. A lot of money.

As O'Higgins does in Beating the Dow, Dr. Thorp and his successors make it clear that "hunches" play no role in the strategy; there is only one best play of the cards based on the past "history" of the cards. The main kicker here is that, unlike Beating the Dow, it can take considerable time and practice to implement this strategy successfully.

I was planning to draw further analogies between play at the Blackjack table and play on Wall Street when I discovered that the son of a gun Thorp beat me to it. My 1966 edition of Thorp's book ends with two pages dedicated to the stock market. Keep in mind that these words were penned over 30 years ago. Here are some excerpts:

The greatest gambling game played on earth is the one played daily through the brokerage houses across the country.... The advantages of this gambling game are two. First, it presumably serves a social purpose by helping to finance companies.... Second, the average "value" of stocks has tended strongly upward over the last century so the game has an "advantage," on "average," for the player.

The similarity between the casinos and the brokerage houses is striking. The [brokers] are the croupiers. The commissions correspond to the house percentage. The board rooms are the casinos themselves. The stock exchanges and the ticker tape are the gambling devices. The superstitions, unfounded slogans, and sayings of Wall Street correspond to those of the gamblers: "The dice are hot."

To a good first approximation, stocks show the same mathematical characteristics of randomness that are shown by the chance devices in the gaming houses. But a number of patterns are now being discovered.... With the advance in computer technology and mathematical theory, we can expect dramatic progress in predicting stock prices.... But most of the possibilities are beyond the reach of our present imagination and dreams. It will be exciting to see them unfold.

It is exciting indeed to see them unfold. I hereby nominate Dr. Thorp as a charter member of the Fool Hall of Fame.