Gambler, Trader, Speculator or Investor

[shadowninja]

at the end of the day a trade is nothing more than a gamble with associated benefits (edge,risk management, and so forth). Whether you chose to employ those benefits is a personal choice but it doesn't change the essence of trading being gambling. Professional or not it is still gambling. I wish people would just accept this and be honest with themselves.

The worst is religious traders who define themselves as investors. I spoke with one a couple of weeks ago and he explained to me his edge provides him with a 100% probability of making a return in the long run and hence he is NOT a gambler, he stated he is undeniably an investor. heh, cracks me up every time.

even though he readily admitted that each trade was a calculated gamble he was not a gambler at the end of the day. I told him to repent his sins at church and give them 50% of his profits

1) Sure, it's all gambling but I do think people need to identify the difference as many use the term "gambling" to suggest that it's a stupid idea. "Trading is just gambling" is what my mum tells me; she doesn't get it that there's a difference. Life's a gamble. When you decide to study accountancy rather than engineering, that's a gamble as you don't know the job market in 4 years' time. The difference is calculated risks.

2) Agreed with the investor thing; you just cannot convince them otherwise. Whenever people use the term "invest", I laugh especially when they say they want to invest £20k in a new BMW. "SPEND", ffs.

 

[Prawnsandwich]

1) Sure, it's all gambling but I do think people need to identify the difference as many use the term "gambling" to suggest that it's a stupid idea. "Trading is just gambling" is what my mum tells me; she doesn't get it that there's a difference. Life's a gamble. When you decide to study accountancy rather than engineering, that's a gamble as you don't know the job market in 4 years' time. The difference is calculated risks.

2) Agreed with the investor thing; you just cannot convince them otherwise. Whenever people use the term "invest", I laugh especially when they say they want to invest £20k in a new BMW. "SPEND", ffs.

Great investment that, guaranteed to lose 50% in a couple of years..

 

[Chartsy]

well, risk is what i'm taking which is 12.5% of my money.
i feel i am justified given the ridiculous strength in eurusd lately considering that the eurozone is just sh!t, it's a carry trade for the time being but if it has no decent pullbacks between then and now then im shorting there. if we do get pullbacks ill wait for a trend reversal

 

[Chartsy]

yeh shadowninja;trading is seen as a way to cover up gambling as it's 'constructive' and people can feel justified as they 'had a reason'

 

[forker]

1) "Trading is just gambling" is what my mum tells me; she doesn't get it that there's a difference.

years ago the wife used to call me a gambler and I used to get annoyed with her. Nowadays she doesn't call me that any more because I readily admit it. The annoyance is now sitting with her.

 

[shadowninja]

years ago the wife used to call me a gambler and I used to get annoyed with her. Nowadays she doesn't call me that any more because I readily admit it. The annoyance is now sitting with her.

hehe When people ask what I'm up to I just reply that I'm gambling my life away.

 

[Splitlink]

at the end of the day a trade is nothing more than a gamble with associated benefits (edge,risk management, and so forth).

One trade, yes. But a series of tested trades over a period of time denotes that the speculator has taken more interest in what he is doing than just gambling.

A person who is, consistently, profitable in his trading is not gambling, IMO.

A person who does as your quote, above, suggests every day, just picking what he fancies, is gambling.

However, call me as you will. As long as I am successful in what I do I don't mind being called a gambler. At 78 years of age, I think that it gives me a certain air. I must go out tomorrow and get some spats and an ivory topped cane!

 

[tomorton]

The terms bring their own associatons, some of which have already emeregd above - 'degenerate' gambler. we could add -
'honest' trader
'avaricious' speculator
'prudent' investor

It's all BS. By the by, 'investing' in shares is impossible, as the principal is inherently placed at risk. We therefore speculate in shares, regardless of 'investment' time horizon. Depositing money into an interest-paying bank account, however, is investing (alright, there is a mnor risk of the bank defaulting) because such an instrument does not involve an inherent risk.

If shares were inherently zero-risk, why would payment of a dividend even be considered?

 

[Splitlink]

The terms bring their own associatons, some of which have already emeregd above - 'degenerate' gambler. we could add -
'honest' trader
'avaricious' speculator
'prudent' investor

It's all BS. By the by, 'investing' in shares is impossible, as the principal is inherently placed at risk. We therefore speculate in shares, regardless of 'investment' time horizon. Depositing money into an interest-paying bank account, however, is investing (alright, there is a mnor risk of the bank defaulting) because such an instrument does not involve an inherent risk.

If shares were inherently zero-risk, why would payment of a dividend even be considered?

Tom, have I understood you correctly? Money in a bank is investing?

I'm not BS-ing but a year's wages 40 years ago would hardly pay for a restaurant bill for four people today.

 

[forker]

One trade, yes. But a series of tested trades over a period of time denotes that the speculator has taken more interest in what he is doing than just gambling.

A person who is, consistently, profitable in his trading is not gambling, IMO.

A person who does as your quote, above, suggests every day, just picking what he fancies, is gambling.

However, call me as you will. As long as I am successful in what I do I don't mind being called a gambler. At 78 years of age, I think that it gives me a certain air. I must go out tomorrow and get some spats and an ivory topped cane!

whether you are calculating your trades mathematically using time tested methods or picking tops and bottoms. it makes no difference to the fact that a trade has an unknown outcome and anything can happen. How is that not gambling? Just admit it Splitlink, your as much a gambler as the rest of us.

dictionary reference...
http://dictionary.reference.com/browse/gambling
"to stake or risk money, or anything of value, on the outcome of something involving chance"

 

[shadowninja]

I think he means that the strict meaning of "invest" doesn't have any sort of inherent risk but should return some kind of profit.

 

[Splitlink]

whether you are calculating your trades mathematically using time tested methods or picking tops and bottoms. it makes no difference to the fact that a trade has an unknown outcome and anything can happen. How is that not gambling? Just admit it Splitlink, your as much a gambler as the rest of us.

dictionary reference...
http://dictionary.reference.com/browse/gambling
"to stake or risk money, or anything of value, on the outcome of something involving chance"

Ok, but remember what I said earlier. Every decision in life is a gamble. Every shop opened on the corner, or in the main shopping centre is a gamble.

In the meantime, until the next trade, tomorrow, "Here's mud in your eye!" and don't spill any on my spats! :cheers:

 

[tomorton]

Yes, putting money in a bank account is investing - everything else is something else.

We like to think other things can be investments too, and this mis-labelling is important as it affects our decision-making processes.

Maybe your financial adviser suggests a blue chip investment opportunity in the stock markets. Sounds better than a 'punt for speculators' doesn't it?

And once a position is open, maybe the mental classification and psychological valuation of this as an 'investment' inhibits some people from bailing out as quickly as they should when things go wrong?

Never mind the industry's periodic mis-selling scandals - we're mis-selling the game to ourselves anyway.

 

[Splitlink]

Yes, putting money in a bank account is investing - everything else is something else.

We like to think other things can be investments too, and this mis-labelling is important as it affects our decision-making processes.

Maybe your financial adviser suggests a blue chip investment opportunity in the stock markets. Sounds better than a 'punt for speculators' doesn't it?

And once a position is open, maybe the mental classification and psychological valuation of this as an 'investment' inhibits some people from bailing out as quickly as they should when things go wrong?

Never mind the industry's periodic mis-selling scandals - we're mis-selling the game to ourselves anyway.

Tom, money is not an investment. I'm old enough to know that. All money is is a stop gap promise from your central bank to give the amount on the note when you spend it. If you do not spend it quick enough it deteriates until, when you retire, your pension right is more than you earned in a year in your prime, although it, probably, will not buy as much. You must employ your money in some way. There is risk there, I know, but it is the only chance one has. Otherwise, ask how a London bus driver earns £500 per week when my father earned around £15-20 when he retired in 1965
and £3-4 when WWII broke out?

I know that there has been a property bubble and that people's equity has been drastically reduced but my father's house cost him £1300 just after the war and sold, as you can imagine, for much more than that on his death.

 

[Shakone]

Tomorton, Investment, Speculation, Gambling, Trading, they're all just words, which only have meaning to you, and often different meaning to someone else. Whatever you want to call investment is up to you. It is irrelevant in the big scheme of things. Do you have enough to live on? Do you live in luxury? Are you more secure than the average person financially? These are all that really matter. Everything is a gamble. Everything you do, you are risking EVERYTHING. Your life, your finances, your future. So in that respect I agree with Splitlink.

 

[tomorton]

My point is that the words are not irrelevant. And because we have a false sense of what is the true situation, because we are using the wrong words, many of us often react wrongly under pressure of unforeseen circumstance.

Suppose you have put money into what you call a speculative punt. Then it goes 5% against you. Then 10, 20, and soon it's up to 50. But suppose you invested an equal amount of money, and soon that is also 50% against you. You might make diferent decisions because you see them as having different qualities as 'investments'. Or, you might even leave both positions to work themselves out. But which one would you repeat, and try again tomorrow? - not both, surely?

Whereas I submit they are the same and a claim to fundamental distinction is delusional. They're both gambles.

 

[Emini-mouse]

Events are - possible , impossible or certain.
If its not impossible or certain, its gambling

 

[Prawnsandwich]

Events are - possible , impossible or certain.
If its not impossible or certain, its gambling

Therefore 99.999% of everything everyone does is gambling ?

Only death and taxes are not gambling then...

 

[Emini-mouse]

Therefore 99.999% of everything everyone does is gambling ?

Only death and taxes are not gambling then...

Suppose so

 

[Splitlink]

My point is that the words are not irrelevant. And because we have a false sense of what is the true situation, because we are using the wrong words, many of us often react wrongly under pressure of unforeseen circumstance.

Suppose you have put money into what you call a speculative punt. Then it goes 5% against you. Then 10, 20, and soon it's up to 50. But suppose you invested an equal amount of money, and soon that is also 50% against you. You might make diferent decisions because you see them as having different qualities as 'investments'. Or, you might even leave both positions to work themselves out. But which one would you repeat, and try again tomorrow? - not both, surely?

Whereas I submit they are the same and a claim to fundamental distinction is delusional. They're both gambles.

Yes they are. Everything that has a risk is a gamble.