"Investing" vs "Speculating"

Personally I think it is a spectrum and I find it interesting that many seem invested in their view of where each falls on the spectrum. Here's a couple relevant quotes.

"Everyone who makes a decision in the absence of complete information about the future consequences of all available opportunities is a speculator. So everyone is a speculator." Paul Heyne – The Economic Way of Thinking (as quoted in Practical Speculation).

"An investor risks 100% of their money in the hopes of receiving a 10% gain. A speculator risks just 10% in anticipation of earning 100%." Doug Casey, The Speculator as Hero – Daily Reckoning 11/2/2005
The individual quotes might be provocative, but maybe that's the point. All of life involves some form of risk and grappling with uncertainty. I'm hungry, and need to visit the grocery store to resupply. That means walking, driving or taking some form of transport. And that means nonzero probability of injury or death on the journey. Does that imply that satisfying my hunger for food, invites dalliance with death? Taken literally, yes. It's a speculation. But literal interpretation would be silly and petulant.

But in my own example, it probably would be risibly risky (speculative) to hitch-hike to the grocery store. Speculation means starting with a modest and inevitable risk, and amplifying it greatly.
 
So would investing in lumber companies, drywall companies, shingle companies, copper wiring companies be speculative or investing, considering the recent fires in LA?
 
So would investing in lumber companies, drywall companies, shingle companies, copper wiring companies be speculative or investing, considering the recent fires in LA?
Very speculative, IMO. The good phase of that party is probably over. The only hope would be if the assets still available are mis-priced.

From Rick Ferri's "All About Asset Allocation" : "There is a classic saying on Wall Street, 'What everybody already knows is not worth knowing.' "
 
I hope there is no price gouging during the aftermath in LA. But I know better.
 
Note the negligible default rate if investment grade bonds. So how is a hold-to-maturity investor speculating? Seems to me like they are taking a very small chance of not getting the contractual interest and par value at maturity. Not anywhere near speculating.

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I think anything that is banking on “someone will pay me more for this regardless of any actual economic production” is speculating.

That can be gold, corn, undeveloped land or shares in a company if you’re hoping for a gain before the company’s performance or prospects have materially improved.

Things that are about economic production are investing. Buying shares in a company that produces $x of cash flow and has prospects of growing to $y of cash flow through productivity or market growth for example. Or a company serves x customers with a suite of products which allow them to pay interest on a bond.

Investing in a quantum computing company is high risk, but I wouldn’t characterize it as speculation. It’s a high risk bet on a technical and related business outcome.
 
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