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There is no investment. There is only speculation. Speculation that the asset price will increase. Speculation that your purchase will return higher value in th

• xyzzy4 10y ago
  That's not true in the long term. For example if you buy a house and then rent it, you will eventually earn back the cost of buying it, unless there is some kind of disaster in the market. Stocks are really no different.
  • rm_-rf_slash 10y ago
    The quality of tenant is also somewhat based in luck. If they are a pain in the ass then the time lost may outweigh the cash gained.
    • notpc 10y ago
      Especially when you end up getting sued for exercising prudence in who you lease to. "Disparate impact"!
      • sctb 10y ago
        This account has been using this site primarily for political or ideological purposes, and that's not what it's for. Please don't continue on like this.
        • notpc 10y ago
          Given that certain opinions are very unpopular around here, why should I be forced to use my primary account to post on political topics? If you look through the comment history of this account, I think you'll find that the posts are all very civil.
• valuearb 10y ago
  Speculation is the purchase of investments where you don't have a clear idea of the value of the investment, and are gambling on the direction of the market price. Actual investment is usually called "value investing", you purchase assets at a substantial discount to their intrinsic value and wait for the market to recognize that value. True value investing is rarely practiced on Wall Street because Wall Street is mostly about the latest fad and charging fat fees to the uninformed. And when Wall Street firms tout themselves as "Value" they are typically just buying low PE stocks, which isn't actual value investing at all.
  • senthil_rajasek 10y ago
    You should quote your sources. These are ideas from Ben Graham.
    • grzm 10y ago
      I think the terms used above are now pretty well known to those who know something about investing. While it might add information to include their names, I'm not sure if attributing Ben Graham and David Dodd are necessary at this point.
      • JumpCrisscross 10y ago
        > the terms used above are now pretty well known to those who know something about investing The speculation-investing definitions where "investing" is defined as "value investing" is specific to the Graham-Dodd school of thought. These are not generally-accepted economic definitions. For example, Index investing isn't "investing" per Graham-Dodd.
    • jabgrabdthrow 10y ago
      You have to quote your sources for the concept of "value investing"? Did I miss a joke?
      • senthil_rajasek 10y ago
• charlesism 10y ago
  > Study most successful speculators of or times and > you will see certain patterns and common traits. Most of the traits that come to my mind are unflattering. The chance of making money by legal means is far lower than by insider trading, or market manipulation.
  • valuearb 10y ago
    Maybe in speculation, but Buffett is the most successful investor of all time and his honesty is pretty much unquestionable.
    • charlesdm 10y ago
      The exact opposite to Buffet (value investor) is probably Carl Icahn (speculator). Granted, Icahn has had some major fuckups along the way, probably more than buffet, but he invested well over the years. But both operate in a different way. Soros is another. There's no one way to invest -- you have to find a way that works for you.
    • JumpCrisscross 10y ago
      > but Buffett is the most successful investor of all time Last I checked, Renaissance Technologies and Vista Equity Partners outperform Buffett. RenTech is the opposite of a value investor and Vista does technology LBOs.
    • charlesism 10y ago
      I don't know enough about Warren Buffett to emphatically hold an opinion either way. I agree his public persona and life story (or myth, I honestly don't know) reflect well upon him, but "unquestionable" is a strong statement. Having said that, I agree my comment was a bit hyperbolic. The truth is probably a bit less bleak.
• froogle 10y ago
  This is getting into semantics, but: Nothing about investing in stocks is speculation, at least in the theoretical sense. Businesses earn profits. If you buy shares in a business, you are entitled to a share of those profits. Obviously, this gains you money, and this money will (usually) not come at the cost of the business. So, you'll gain money due to dividends, and your investment won't lose money. Investing in stocks is going to be, on average, a net gain for you. In theory. And mostly in practice, see for example the massive exponential gains in the S&P 500. There's a lot more to things. For example, sometimes businesses fail and you'll have lost all your money. And on the flip side, maybe a business will grow enormously. But this just adds noise to the data, it doesn't change the fact that, on average, you should make money on stocks in the long-term. If you just buy a total market index fund, you're making a bet with a high expected value. That's not "speculation" in the same sense of going to a casino and playing blackjack or buying an asset which has no fundamental reason to rise in value (like precious metals). So, I think it's misleading to call investing "speculation". It gives off the wrong vibes, since the way most people understand the word it makes it sounds like investing is super risky. (And yes, there's some risk, don't get me wrong, but not in the sense that it's a coin flip like many people think.)
  • MrFantastic 10y ago
    Short term equity is speculation. Long term equity is more of an investment. I think bonds are considered investment although to the price sell them before term fluctuates.
• Godel_unicode 10y ago
  > ...and you will see certain patterns and common traits. Correlation!=causation There absolutely is investment, consider the rise of socially-motivated ETFs. You can buy an index in: - green power ($ICLN) - smallcap biotech ($PSCH) (admittedly this is also used for speculation) - boardroom diversity ($SHE) - LGBT workforce ($EQLT)
• YZF 10y ago
  When you go to the casino and put $100K on red on the roulette that's speculation. When you use the $100K to go to college and get an engineering degree that's an investment. There's no guarantee your investment will yield a reward but there's a better probability than gambling (let's just say better than 50/50 for that matter). An investment is putting money towards something that has a good probability of yielding a return, be it your education, renovating your house, a new car, shares in Coca Cola, or US government bonds.