Aren't All Investor are gamblers and speculators???

[Enuff2Eat]

A couple friends of mine invested in real estate. they did WELL and thought they are so so smart. I myself did ok in real estate but i see myself as a gambler and speculator. The time that we bought some real estate, the price could also easily go up and sometime down even further.

To me a really smart investor makes money ALL THE TIME, regardless of the market and his asset kept growing from every aspect. That is why during the dot.com time many people turned rich, cash out and just DON"T know what to do next, except collecting interest in the bank. That is what i call a lucky gambler.

enuff

ps. i am just piss off that i am not one of them.

 

[yakers]

Well, life has its ironies as well. Many years ago in my first marriage I saw a house I really wanted. It was just a bit too much stretch at the time. I still walk by it occasionally & its still a house I like in my area that would be worth a small fortune today. But...if I had bought it when first married I would not have it now. Instead we went ahead and bought a small place which I was able to afford to buy out my exwife when I had to.
Its pretty easy to imagine having more money. Maybe we should occasionally imagine how difficult things can get as well.

 

[Nords]

Provocative interesting question. I guess it depends whether you're investing for entertainment or to put food on the table.

In the latter case, whether you're doing it with blackjack or with small-cap value stocks or condos, doing it right is not a simple nor a short-timer's task. That's why it's so important to learn, diversify, & monitor.

 

[Ed_The_Gypsy]

I gamble with my career, not my money.

 

[Spanky]

Life is a gamle. During a bull market, everyone is an investor. When the market starts gyrating, many so called "investors" turn to speculators.

 

[mathjak107]

Investing is when you say im willing to accept the returns the markets give me whether good or bad. When you attemp to out guess and beat the returns the markets are returning your speculating.

 

[rs0460a]

You're also a "gambler/speculator" if you keep your $$$ under your mattress. Safe? Other than having it stolen or loosing value due to inflation, you still may have the same amount, but be worth much less in the future.

That's life - there are no guarantees. If you don't want to take a risk, don't leave the house, get married, have kids, etc, etc, etc...

- Ron

 

[brewer12345]

Investor: I maintain a diversified portfolio, pick my spots, and make sure that the downside is modest even if it reduces my return potential somewhat.

Speculator: Iam trying to shoot the moon and I am willing to sustain a large loss if it means that I can potentially make a very large profit.

I am both.

 

[lets-retire]

I would think being a little of both would be the best option. Obviously you don't want to overdo the speculator part or you'll likely be stuck in a job for the rest of your life.

 

[brewer12345]

I would think being a little of both would be the best option. Obviously you don't want to overdo the speculator part or you'll likely be stuck in a job for the rest of your life.

Most times, the speculator bit is under 5% of my portfolio. Consists mostly of options and warrants.

 

[riskadverse]

To me a really smart investor makes money ALL THE TIME, regardless of the market and his asset kept growing from every aspect. That is why during the dot.com time many people turned rich, cash out and just DON"T know what to do next, except collecting interest in the bank. That is what i call a lucky gambler.

The casinos brokers, advisors, newsletters, and CEOs make money all the time. The gamblers hedge funds, mutual funds, investors, speculators, and traders make money extracting it from the public. And the suckers public, well there's an old poker saying . . . if look around the table and can't figure out . . .

 

[maddythebeagle]

To answer your question, no, not all investors are gamblers and speculators.....

I view this all about probability/odds....maybe need to throw in risk/reward, also....

Gambling=low odds of success....probably will lose all of your money....i.e. The lottery.

Speculating=maybe 50/50 odds....not based on info. but just a guess...i.e. I will guess if the market will go up or down.

Investing=have more information and make decisions based on winning more than losing....i.e. I will put money into xyz company because it has been in business for 100 years and I think it will continue to make money and the market has undervalued it.

 

[slepyhed]

I thought investing was using capital to fund business ventures in the hopes of future profits?

 

[tryan]

a really smart investor makes money ALL THE TIME,

This person does not exist ... certianly not on any fixed time scale.

The smart investor "wins" more times than he/she "looses". But there are still losses.

 

[FlogBlogger]

This one's easy.

Starting out, I was an investor up until a few paid off, increasing my net worth to the point I could FIRE.

Now, some of those same investments--real estate, penny stocks--I consider speculative gambles, considering what is at stake, and will unload them at first opportunity.

 

[Donzo]

Investing is simply putting your money to work for you. when I was employed - I had most of my portfolio in stocks and saw very nice gains over the 23 years and some losses - the gains far outweighed the losses. But, I was willing to take the losses - often, I would not even look at my portfolio for 3 or more months - just kept putting as much money away as possible and stayed focused on the j*b.
Now that I am retired my portfolio is much more conservative 55/30/15%. I need to feel more safe to sleep at night - I am starting to spend my saved money.

I put the property I own in SanDiego for sale - I am going to use the $ from that sale to fund more of a Rays 3 buckets approach.

And keep some (smallish) amount aside to "shoot for the moon" - with the understanding that I could lose it...or fund a special trip 8)

 

[Robert the Red]

Everything we do to make a 'profit' (in the sense of improving our lives) is a "gamble".

Example: look at the entire body of work of a great artist -- Van Gogh or Renoir say -- whose best works you love dearly. The majority of their product was just OK at best. But sometimes they hit the ball out of the park and into orbit. All that work was a gamble (and producing a large complex oil painting is a lot of work). And these guys produced stuff that resonates with millions of people and will be part of our culture for hundreds/thousands of years. A lot more than I'll ever produce.

Of course, you can train and learn and 'due diligence' to increase the probability of a successful gamble. At some point, you can call the gamble "investment".

 

[Enuff2Eat]

well, based on what your repsonses. i came to a conclusion that i am just a "lucky" speculator because "50/50 odds" when i bought my property and it panned out during the bull market.

gambler: if win, win real big (lottery, odds of winning is 1 to 30million)

speculator: if win, win enuff (stocks, real estate 50/50 odds??)

investor: if win, win the least (most educated, trained and conservative; therefore odds could be 1 to 4; just like picking a horse, the higher the odds for the horse the least you make)

enuff

 

[free4now]

Investing is finding games where the odds are most favorable for the amount of risk you can handle. Investors only play games where they win on average.

Gambling is playing games where the odds are against you, but you hope you'll be the exception that wins. Gamblers usually play games where they lose on average.

 

[Nords]

Investing is finding games where the odds are most favorable for the amount of risk you can handle. Investors only play games where they win on average.
Gambling is playing games where the odds are against you, but you hope you'll be the exception that wins. Gamblers usually play games where they lose on average.

Blackjack players can tilt the odds in their favor, although admittedly it's still a risky microfraction. Casinos don't mind because there are huge crowds of people who are still visiting the tables for entertainment value, not for the basic strategy or the card-counting techniques.

I think that brokerages have the same philosophy. Either way they get their share.

 

[HFWR]

I'm no gambler, but the blackjack tables I played had multiple decks, and reshuffled often; maybe Spock or Data could count those cards, but after a few "free" casino drinks, I sure couldn't...

 

[Nords]

I'm no gambler, but the blackjack tables I played had multiple decks, and reshuffled often; maybe Spock or Data could count those cards, but after a few "free" casino drinks, I sure couldn't...

Yeah, no kidding. The further I got into the card-counting systems the more I began to appreciate the sheer simplicity of running nuclear reactors.

Basic strategy with progressive betting. Ironically also recommended by a nuke.

 

[Gone4Good]

1) Gambling - gambling is a zero sum game governed largely (blackjack) or entirely (roulette) by chance.

2) Investing - investors are distinguished from gamblers in that investing is not a zero sum game. Gamblers seek to divvy up a fixed pie, appropriating a larger share for themselves, whereas investors look to make money by building something of value and thereby increase the size of the pie.

3) Speculating - speculating is an amorphous term. It could be used to describe short-term trades in a manner similar to gambling or it could be used to describe a high risk investment.

 

[Spanky]

Gambling - odd of winning is low, but the potential payoff is high
Investing - the probability of getting a postive return over time is good
speculating - short-term trading, odd is 50/50

 

[kcowan]

Three ways to make money:
1) trade time for money
2) trade money for money
3) trade other people's time and money for money.

Working, consulting and personal portfolio management fall into category 1.

Bonds, GICs and bank interest are in category 2.

Stocks, mutual funds, index funds and owning a business are in category 3.

Category 2 has historically returned the lowest returns. Does this make them lowest risk? I don't think so. Yes your principal can be protected if you always hold until end of term. But your buying power has eroded and you have made less than both other categories most of the time.

There has been substantial debate about Category 1. I believe that those who risk their egos the most (such as in sales or as CEO) get the best returns for their time invested. They risk personal humiliation and public failure more than most employees. This is the single highest leverage that most people enjoy during their first 10 years of career.

Category 3 is where most people discuss risk. I have seen discussions about tolerance for volatility as the most productive as the determining factor for what kind of returns one can hope to make. Just look at the 12 month stock charts for individual companies to appreciate volatility.

My father, MIL and brother have only invested in Category 2 and this has cost them dearly both in their working and retirement years. Their only source of speculative returns has been their property purchases.