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A Positive Expected Valued bet does not mean that it is not gambling. A couple of years ago, the MegaMillions prize was so large that the expected profit from a
by whatever1 6y ago
A Positive Expected Valued bet does not mean that it is not gambling.
A couple of years ago, the MegaMillions prize was so large that the expected profit from a lottery ticket was higher than the cost of the ticket itself. Buying that ticket was still gambling.
The problem with the stock market is that you gamble on speculations. And you do so without any connection to the balance sheet of the company. Most of the shareholders are not the original shareholders, that means that they never invested a single penny to the company. They only paid speculators. And these speculators paid others etc.
Stock market is mostly* a glorified pump and dump scheme that looks for the greatest fool[1].
[1] https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory
*exluding the IPOs and issuing of new shares where actual money flows from the investors to the balance sheets of companies.
- fractionalhare 6y ago> And you do so without any connection to the balance sheet of the company. This is incorrect for just about every long/short equity hedge fund.
- RhodoGSA 6y agoI've been doing alot of deep dive into 'Technical Analysis', picked up a couple text books on the markets and have been flipping cryto to great success lately. I've come to realise that 'Technical Analysis' is just insider trading. Us day traders come to this 'Agreement' on which technical analysis to buy and sell at. There are thousands of different 'methods' to coordinate this insider trading but if a boolinger band lines up with the bottom of linear regression chart, it's a pretty safe bet to assume other people 'Agree' to pump and dump up to some other technical analysis. Whatever you call technical analysis, I call sophisticated insider trading. It's been working out great for me, but i do feel alittle gross sometimes.
- jliptzin 6y agoA negative expected value bet also does not mean that it is gambling. For example, buying homeowner's or life insurance. This entire article seems to be quite obvious and should be easy intuition even for a beginner, and doesn't even try to explain how one might be able to tell whether their trading profits are due to luck or skill.