Comments on: Investment vs. Speculation

By: Eric The Ron

Eric The Ron — Thu, 15 Jul 2010 22:16:58 +0000

Investments have returns–they make money. Speculation is gambling on price appreciation–e.g. trading in currency or commodity futures. These things don't have any returns–and if they do that isn't why you're trading them. Stocks and bonds may be speculative if the only reason for buying them is to trade on price changes, especially price changes not related to improvements in the prospects or value of the business.

But any speculation can also be a hedge, which is a valuable exercise. There's the old saw "buy 10% in Gold to hedge your bond portfolio against inflation". Whether this really works or not, if that's why you're buying the gold then this is a hedge, not merely the speculation a Gold purchase would otherwise be.

By: mod converter

mod converter — Tue, 16 Mar 2010 02:59:27 +0000

i added everyone whos posted their ID# here.

By: Speculator

Speculator — Mon, 08 Jun 2009 20:58:56 +0000

You are an investor? What is the difference? In both cases you risk money in favor of return. In the long run, your goal is to see a rise in price nothing else: if your profit is negative then you are simply a "sucker" even if value of company is high! Value of a company is a social construction — it is a virtual representation of price that is usually wrong.

By: RohitK

RohitK — Fri, 08 May 2009 11:59:43 +0000

@simon..I totally agree with u...about speculation And investment means long term always according to me..but i do not about others..

By: RohitK

RohitK — Fri, 08 May 2009 11:59:31 +0000

By: maruli

maruli — Thu, 02 Apr 2009 13:32:41 +0000

Some times Investor, can be said speculator. I think all we life or business he a risk, so the investor or specultor is the same, but may how we look that. Thanks . We do our live as a investor

By: Strom

Strom — Thu, 12 Mar 2009 17:10:44 +0000

The investor/speculator divide is a distinction without a difference for most. As an investor in publicly traded securities, your access to relevant information is limited, imperfect and accessible to everyone at the same time. Why do you think it is so difficult for fund managers to consistently beat the market? Just because a person has long term intentions doesn't mean that their investment decisions are somehow more intelligent. Just because a person is focused on fundamentals rather than price action, doesn't mean that what they think is important actually will be. Without some kind of edge or advantage, you are a speculator no matter how many hours you spend reading Value Line.

By: Margaret

Margaret — Tue, 10 Mar 2009 01:33:38 +0000

Thank you very much for this post. It is wonderful to see such a reasonable investment philosophy being promoted by an actual investor. If the majority of "investors" in this country were actually investing rather than speculating, our economy would still be able to boast the innovation and resilience of a bygone era.

The one silver lining I see to our current economic situation is that we are starting to wake up to the idea that new business is the foundation of a strong economy. The dominant investment philosophy of immediate profit and short term exits has encouraged limited life span business models by refusing to support long term growth. Thank you for standing apart.

As a young entrepreneur with a long term business model, it is very encouraging to see that at least one investor is still looking for businesses they can be proud to be a part of for many years.

By: Behavior Gap Round Up, 3.6.09

Behavior Gap Round Up, 3.6.09 — Fri, 06 Mar 2009 19:26:06 +0000

[...] Investment vs. Speculation When I reflect on this, I realize that I spend 99.9% of my time as an investor and 0.01% of my time as a speculator. Whenever I realize that I’m in a speculative thought process (such as noticing the Dow on CNN on the ubiquitous airport TVs), I immediately try to stop. My goal is to spend 100% of my time as an investor. [...]

By: I have seen the future and it doesn’t work…totally unrelated bits’n’pieces « Worte, Zeichen, Bilder

Fri, 06 Mar 2009 05:42:49 +0000

[...] “Not surprisingly, there’s a huge amount of noise going around the system about speculation that is masquerading as investment. Worst, the two get conflated on a regular basis in the context of what the government should be doing (e.g. incenting “investment” when they are merely either “incenting speculation” or “encouraging speculation”). Of course, the endless stream of talking heads in the media don’t help this distinction.”///feldthoughts [...]