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> I didn't invest in your fortune 500 company, I bet on the idea that other people down the line would bet on the same company but that they'd bet even harder.
by baddox 8y ago
> I didn't invest in your fortune 500 company, I bet on the idea that other people down the line would bet on the same company but that they'd bet even harder.
You just provided a (simplistic) definition of investing. I don’t see how that supports your claim that it’s not investing. All investing is just buying something that you think will be worth more over time. You buy a share of a company because you think the share will be worth more. You buy a bond because you think the issuer will be able to pay back the debt and interest. I can’t think of another definition of “investing.”
- eldavido 8y agoNot necessarily. A more general, yet more precise definition of investing might be, "Trading cashflows in a way that both parties find beneficial". Those cashflows may be subject to (negotiated) differences in timing, risk of nonpayment, intrinsic uncertainty (most equities fall into this bucket), etc. But at bottom it's all just cashflow. This is a useful lesson to generalize about finance, in the larger sense. Don't think about "worth more". Just think of it as timed cashflows. Negative when you buy, positive when you sell or receive a dividend.