Once upon a time I had a friend that joined a racing partnership — you know, one of those groups that offers part ownership in a Thoroughbred racehorse. Yet, two years later, the partnership has yet to buy a horse (which my gut tells me should be one of the top priorities of such an organization). Sadly, this same friend also invested much of his life savings in Washington Mutual and was probably intrigued — at least initially — by Bernie Madoff’s wealth-building strategies as well.

Now, don’t get me wrong, my friend is not stupid — far from it. He’s a doctor and a guy whose opinions I generally respect (obviously, I don’t often turn to him for investment advice, though he did hook me up with a “dear friend” from Africa that’s cutting me a pretty sweet deal on some money transfers). Still, my buddy’s plight reminds me of why so many people lose at the racetrack. There’s an old adage that warns: “If it sounds too good to be true, it probably is.” But how many investors/gamblers actually take those words to heart and, thus, live happily ever after?

Back in February, I wrote a piece for Investopedia (a Forbes media company) entitled “Irrational Exuberance, Part II.” In it, I cautioned investors about a recent upsurge in stem cell stocks.

“Sure, all the pundits seem to think that the new president will reverse an existing executive order banning federal funding of embryonic stem-cell research,” I wrote. But “ … just because there is a growing market for a particular product or service doesn't necessarily mean that everybody associated with that market is going to benefit.”

Well, you would have thought that I asked famed violinist Joshua Bell to play “The Devil Went Down to Georgia.” Among the e-mails and forum posts I read that didn’t end in “and the horse you rode in on,” was this beauty from someone called “we_know_now” (hopefully, not his/her birth name) posted on the Aastrom Biosciences, Inc. (NASDAQ: ASTM) Yahoo Finance Message Board:

“derek simon is a sports better?
that is what I see...
a sports gambler....lol
if this is true that's rich....
I googled the dolt and it says he is sports gambler
is this true?
a sports gambler talking about stem cells....lol
what's next?
the winner of american idol..adding their 2 cents...
forbes actually let's sports degenerate gamblers writes article for them?”

Source: http://bit.ly/Az0hE

Obviously, we_know_now nailed me on the “degenerate gambler” bit — and my wife would argue that the “dolt” part isn’t that far off either. But at least I’m a prophetic degenerate gambling dolt. ASTM stock has fallen nearly 30 percent since that post was made on Feb. 11.

Of course, the point here is not that I deserve a pat on the back (although I do), it’s that bettors, gamblers, investors — whatever term one chooses to use — need to have realistic expectations. Yes, people hit the lottery. Yes, folks inherit money from rich relatives or make a big Pick-6 score, but far more do not. And to me it is as foolhardy to dream of riches (rather than how to achieve them) as it is to hope that, by flapping one’s arms on a daily basis, one will speed up the evolutionary process and enable one’s grandchildren to fly.

Nite Light Shines Bright in Greenwood Cup

If you believe the old racing adage “weight will stop a freight train,” you’ve got to like Nite Light’s chances in the $250,000 Greenwood Cup at Philadelphia Park on Saturday. After spotting Eldaafer two pounds and getting nosed out by that rival in the Grade 2 Brooklyn Handicap at Belmont Park on June 5, Nite Light is slated to receive eight pounds from Eldaafer in Philly.

The son of Thunder Gulch may have a tactical advantage in the 1 1/2-mile event as well. Outside of Luna Park, none of the other four entrants seem inclined to mix it up early, which could put Nite Light on (or just off) the lead, where he’s especially dangerous.

The rest of the Greenwood Cup field (with fair betting odds) consists of:

1-Luna Park (10-1)
2-Critical Acclaim (15-1)
3-Alcomo (6-1)
4-Eldaafer (3-1)
5-Alaazo (9-2)
6-Nite Light (7-5)

For more handicapping and betting suggestions, check out this week’s “Simon Says” podcast.