Trading = Gambling?

[Emo_Rhino]

My friend explained to me that trading is not gambling. You must have skills, experience and knowledge about the markets to know your next move.

I told him play blackjack and poker also need skills, experience and knowledge to know your next move. And that is gambling.

Even though I made some small money through trading, I still think it is like gambling in some way, if hold positions overnight, I will think about them de because they can go in my favour or against me tomorrow.

any comments?

 

[shotbottle]

Agreed!
I have been "gambling" since 1996 : )

 

[strangerjun]

anything you put the $ for a exchange for a bigger sum and has risk, can be considered gambling....

 

[icelemontea]

u can gamble or u can trade. depends on how u go about it but i can say majority is gamble.

in casino for eg, the biggest winner of the poker table folds the most hands.

as with trading, the biggest winner makes the least trades

 

[supratentorium]

My friend explained to me that trading is not gambling. You must have skills, experience and knowledge about the markets to know your next move.

I told him play blackjack and poker also need skills, experience and knowledge to know your next move. And that is gambling.

Even though I made some small money through trading, I still think it is like gambling in some way, if hold positions overnight, I will think about them de because they can go in my favour or against me tomorrow.

any comments?

If you win consistently at poker/Blackjack, it is because you have an edge.
If you google the definition of gambling, one of them is "Play games of chance for money". "Chance" will not make you money in the long run. Worse still the games in the casino are not games of chance.

 

[dork32]

i dont agree it is gambling. in gambling, there is winner and loser.

if u buy shares, company does well and gives dividend, everyone wins.

 

[rarenick]

i think if buy short term it is punter/gambling.
if buy long term is investment - u check fundamentals, u get dividends, u make vote decisions, u get sense of ownership.

 

[Dividends Warrior]

i think if buy short term it is punter/gambling.
if buy long term is investment - u check fundamentals, u get dividends, u make vote decisions, u get sense of ownership.

Yup. Invest for dividends and capital appreciation over long term.

 

[Majestic12]

Trading IS gambling. There is nothing wrong with gambling so long as your actions generate a positive expected value. In the short run you may suffer from variance, but the long run will even out.

The casino always wins not just because they offer games of negative expected value, but also because they amplify the effect of gambler's ruin way more quickly.

 

[Majestic12]

i think if buy short term it is punter/gambling.
if buy long term is investment - u check fundamentals, u get dividends, u make vote decisions, u get sense of ownership.

Investing is gambling as well - albeit with a long(er) time frame than trading.

 

[cslim35]

As long got risk consider gamble? We are gambling with our life when crossing the road also.

 

[d5dude]

Its gambling, but what isn't gambling? Life itself is a gamble, anything that involves the unknown is a gamble. Even so-called "long term investment" is also gambling because people are essentially making long term bets on the future, on how a company will perform 10-20 years down the road.

To me it doesn't matter if the bet is short term or long term in nature, the future is essentially unpredictable, many things can cause a company to blow up even if you "invest" for the long term, take a look at fortune 500 companies and you will realise that very few companies actually thrive for more than 20 years.

End of the day what matters is whether you are a winner or a loser, a losing investor is a loser, and a winning trader is a winner. Thats the bottom line.

 

[d5dude]

Trading IS gambling. There is nothing wrong with gambling so long as your actions generate a positive expected value. In the short run you may suffer from variance, but the long run will even out.

The casino always wins not just because they offer games of negative expected value, but also because they amplify the effect of gambler's ruin way more quickly.

The casino is able to win consistently because the edge is built into the games, but some people have been able to beat the house at games like blackjack because they know how to count cards (and the house doesn't use a shuffling machine). The same thing can be said about trading, only people who possess an edge will make money in the long run, 95% will lose.

 

[d5dude]

i dont agree it is gambling. in gambling, there is winner and loser.

if u buy shares, company does well and gives dividend, everyone wins.

Some companies have never distributed a single cent of dividend, like Berkshire and Apple, but people continue to trade/buy them anyway...

 

[d5dude]

i think if buy short term it is punter/gambling.
if buy long term is investment - u check fundamentals, u get dividends, u make vote decisions, u get sense of ownership.

And you have certainty that the company will continue to make good profits 10 years down the road and they will continue to distribute dividends? Its still a gamble.

 

[frozened]

And you have certainty that the company will continue to make good profits 10 years down the road and they will continue to distribute dividends? Its still a gamble.

certainty is there if you buy the right company shares. 10 years down the road heck till you die also will be there. Living examples are state owned companies.

Shares like APPL , BERK, are bought as speculative shares they are meant to be bought low and sold high. APPL has been a rising power and will continue as it has a market niche.

There are alot of factors when and what shares are bought or sold. You can just pin-point to one point.

 

[Majestic12]

The casino is able to win consistently because the edge is built into the games, but some people have been able to beat the house at games like blackjack because they know how to count cards (and the house doesn't use a shuffling machine). The same thing can be said about trading, only people who possess an edge will make money in the long run, 95% will lose.

Are you serious? Ever heard of luck and survivor bias?

It is not just people who possess an edge who will win - lucky investors will as well.

 

[Majestic12]

certainty is there if you buy the right company shares. 10 years down the road heck till you die also will be there. Living examples are state owned companies.

Shares like APPL , BERK, are bought as speculative shares they are meant to be bought low and sold high. APPL has been a rising power and will continue as it has a market niche.

There are alot of factors when and what shares are bought or sold. You can just pin-point to one point.

State owned companies wouldn't fold? Really? Just because it happens on a very small probability scale does not mean that it will never happen.

 

[mollys]

our decisions in everyday life is a gamble. life's a gamble. you never know the outcome until you do it.

in trading, you buy based on what you think is the best value. if you bought it cheap, it could even go cheaper. at the end of the day, it's the way how you think would your purchases be at your best price. what you wan to do with your purchases (sell it off?) is entirely up to you.

 

[d5dude]

certainty is there if you buy the right company shares. 10 years down the road heck till you die also will be there. Living examples are state owned companies.

Shares like APPL , BERK, are bought as speculative shares they are meant to be bought low and sold high. APPL has been a rising power and will continue as it has a market niche.

There are alot of factors when and what shares are bought or sold. You can just pin-point to one point.

Key is "right" company. How do you know you bought the right company? Can anyone say for sure (100%) what the future holds for any company? Fact is no amount of analysis will prepare anyone for what lies ahead, what investors/traders have is an estimate at best, and we know estimates can be terribly wrong sometimes.

First time I hear someone say BRK is speculative, BRK is one of the bluest blue chips in the US, simply because Warren Buffet has consistently outperformed the broader market index for the last 20 years.

Btw Warren Buffet uses the word "bet" very often too, incidentally his company sold billions worth of derivatives (puts) on the SP500 a few years ago, so he makes bets too, but people call him an "investor" (and not a gambler) because he makes his bets on wall street, and not the casino.