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Ordinary investing tends to be positive expectancy and positive-sum. That is, there are economic reasons to expect stock prices to go up so both parties to a tr

Ordinary investing tends to be positive expectancy and positive-sum. That is, there are economic reasons to expect stock prices to go up so both parties to a trade can gain instead of one making a gain equal to the other’s loss. Gambling is either negative expectancy* with a bookie/casino or zero-sum. The zero-sum case is a bit more interesting: if you are better at betting then you can make a profit, but the people who succeed are not problem gamblers. There is probably some argument to be made that trading some financial instruments in certain ways is similar to this latter type of gambling. So my claim is basically that investing is an activity that should be positive sum and gambling is not. * if you are smarter than the casino or bookie you will be kicked out so maybe you can make a small positive amount of money.

imtringued 5y ago
Trading is an activity with supply and demand for trading. It's behaving like any old business. You're offering a product to a customer (the investors). The problem with this is obviously that consumer markets can be saturated. The number of investors does not grow with the number of traders. Adding more traders just results in a fight for market share. When traders are pretending that other traders are their customers they basically started a game of musical chairs where someone has to lose.
bko 5y ago
It's not just about the instrument because you can gamble with stocks, which in general have positive expectancy and positive sum. Day trading meme stocks is definitely gambling, so I would say it also has to do with behavior.
- cehrlich 5y ago
  I agree there is a big difference between day trading meme stocks and sticking your money in an MSCI World Index Fund or whatever. That being said, I still constantly feel tempted to check how my portfolio of very boring index funds is doing, despite having absolutely no intention of selling anything for many years.

imtringued 5y ago

Trading is an activity with supply and demand for trading. It's behaving like any old business. You're offering a product to a customer (the investors). The problem with this is obviously that consumer markets can be saturated. The number of investors does not grow with the number of traders. Adding more traders just results in a fight for market share. When traders are pretending that other traders are their customers they basically started a game of musical chairs where someone has to lose.

bko 5y ago

It's not just about the instrument because you can gamble with stocks, which in general have positive expectancy and positive sum. Day trading meme stocks is definitely gambling, so I would say it also has to do with behavior.

cehrlich 5y ago
I agree there is a big difference between day trading meme stocks and sticking your money in an MSCI World Index Fund or whatever. That being said, I still constantly feel tempted to check how my portfolio of very boring index funds is doing, despite having absolutely no intention of selling anything for many years.