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I believe strongly that the word 'invest' should be used to distinguish one's activities from speculation, rather than be a superclass of it. Discourse is poiso
by philipov 9y ago
I believe strongly that the word 'invest' should be used to distinguish one's activities from speculation, rather than be a superclass of it. Discourse is poisoned when people promote semantic overlap and create ambiguity, rather than using words to create meaningful distinctions.
Investing is what you do when you're not merely speculating on short-term returns, but are instead focused on long-term value creation. It is right to call it currency speculation, because instead of investing capital to create sustainable growth in something, you're just skimming the fluctuations using massive leverage.
- lsaferite 9y agoUnless you are part of an IPO or are buying newly issued stock you are also speculating on stocks when you buy them. Note: Not a finance person, just a personal opinion.
- eloff 9y agoIt depends I guess on how you do your homework and how long you hold the stocks for. Warren Buffett style long-term value based investing vs speculative day trading for example.
- philipov 9y agoIn practice, it may not be possible to neatly classify any particular financial decision as being purely investment or purely speculation. This only increases the need to have these words mean clearly different things so that we may use them to analyze the different aspects of the ambiguous world in which we find ourselves. Blurring the meaning of the words effectively robs people of the ability to reason about their circumstances, and it is no wonder that many people feel invested in creating such confusion.
- brucephillips 9y agoThe impossibility of separating the two concepts necessitates two different words for those concepts? That's a contradiction.
- philipov 9y agoThe concepts are easy to separate: Investment is symbiotic, Speculation is parasitic. Having clear concepts is more important when the real-world examples are complicated.
- brucephillips 9y agoHow is speculation parasitic?
- philipov 9y agoSpeculators seek to extract alpha without regard to the overall health of the instrument. Shorting is just as good as going long, so far as you make a profit.
- brucephillips 9y agoThat doesn't mean they're parasitic. To show they're parasitic, you'd have to describe how they hurt the company. Regardless, what defines speculation is not parasitism, it's uncertainty. And there's uncertainty in any investment as well. That's why there's no clear line between the two.
- philipov 9y agoI disagree. I have made a clear delineation in the semantic content of my definitions, while you continue to attempt to confuse the issue.
- brucephillips 9y agoI mean, the definitions aren't yours to make. These words exist in the dictionary.
- philipov 9y ago
- brucephillips 9y agoSpeculation relates to uncertainty, not timing.