isnt the market itself exactly that?
this post was submitted on 28 Oct 2024
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I class market trackers as investing rather than gambling.
Sure they can still go down (and by a lot), but it tends to be big events like COVID that do that, and it soon bounced back up again.
If you're investing more than a few percent of your portfolio in any one company, you're probably gambling though. And sure, nVidia look a safe bet today, but if Sam Altman comes out tomorrow and goes "sorry guys, this ain't going anywhere" then you'll lose over half your money before you can blink.
I wouldn't invest on a timeframe of less than a few years either. It's not for boosting your rent money. It's just better than leaving your spare money in cash. If the concept of "spare money" is alien, then it's probably not for you.
If you're investing more than a few percent of your portfolio in any one company, you're probably gambling though.
I read a forum post many years ago about people that put all their retirement money into some company that was going to be the sole supplier for some components for the iPhone. Apple didn't end up going with them, and the company was relying entirely on that contract. The company went bankrupt, and the people that invested lost all their money.
In the end, why invest in a small number of companies when you can invest in practically all of them? Bogleheads three fund portfolio (total US stock + total world stock + bonds) is very simple yet will beat most actively-managed portfolios over the long run.
Long term market rate of return is positive (extremely positive of late), where as casino gambling is EV negative.
But options and futures exist as a short term hedge on equity investment. Combine that with the vig Robinhood takes on the front end in the form of higher contract prices, and you end up with an EV negative return - more consistent with high stakes gambling than equity investing.
I just want to tip my hat to Elizabeth Lopatto's writing in this piece. I miss following her on twitter and had forgotten how spicy and on-target she can be. Good stuff.
Let's be honest, most share trading is more like gambling than it is like investing.
I work for a publicly traded company and I have some visibility into what’s happening with our products and business. Then I read the Y! Finance page about our stock and it’s all weird math trends analyses and absolutely zero about our company, its fundamentals, and the future of our business. Stock trading is just a bunch of assholes trying to sift the sea of numbers to divine a magic formula. The irony is that their own behavior drives the price changes, so they are feeding straight into the data they are trying to read and act on. What a circle jerk.
The market is wild sometimes. I work for a fairly large company. Sometimes in our earnings reports, we exceed EPS and revenue expectations (which is good of course), but don't exceed them as much as some analysts think we'll exceed them, so the stock goes down. The expectation is that we'll always exceed the expectations lol
Yes, and good news about the company can drive the stock price down, if enough people decide that that’s probably a high point for the near future and a good time to sell and take profits.
Let's be honest, our "free market" is a regular casino for the plebs that own about 10% of shares in their 401ks and Robinhood accounts, and an intentionally rigged casino for the oligarchs that own the rest, with marked insider information cards, and loaded market manipulation dice.
Gotta love when the bootlickers defend this economy, and market investment, as somehow inclusive, when 93% of stocks are owned by 10% of Americans.
(Saved Fortune article) https://archive.ph/DW0A8
It would suck if working class Americans lost their retirement money due to Wall Street getting what they deserve. But what sucks more is that our retirement system is based on letting rich people gamble with your money in the first place!
I guess it depends on your main goal. I started out as a gambler then lost a bunch of money and started actually investing. But at the end of the day every transaction you make can be called a gamble.
Semantics.
They're almost there…
Glad I stopped investing.
Don't stop investing. Investing the right way is the right thing to do with money you don't need in the near future to prevent it to rot in bank.
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