Gambling vs investing

NeonNinja

NeonNinja

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WordWeb:
Gamble: Money that is risked for possible monetary gain
Invest: Spend money [, time, or energy on something,] especially for profitable returns




I did try Google a little. I kind of advocate the view that gambling 75% is like investing. Now I'm not talking about poker, blackjack, or lotto; in other words games of chance (or games of skill); more like games of historical/past reputation. E.G sports betting. Like you would in investing, invest based on prior performances or past reputation.

Say you bet on a sports team. Man U. We all know his track record is good, two or 3 failures along the way. My point is we do a long time analysis on a good team which is unlikely to loose (against trivial opponents of course). You are investing on Man U to win based on good judgement of said factors.

There is a risk in both this gambling and investing.
Man U might win 8 games out of 10 against trivial sides. Same as investments the company might be another Bernard L Madoff con, might be on a good streak and it just liquidates or your fault - lack of patience and discipline, lack of knowledge, no risk awareness, etc.
Point is, there's an element of risk on both, but more to gambling of course. Thus the 75% similarity in the opening paragraph.

Your thoughts?
 
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A quote that I came across years ago: investing in the stock market = upmarket bingo :)
 
Online gambling is illegal in SA, online share trading is not :P
 
Wyzak said:
Online gambling is illegal in SA, online share trading is not :P
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I was specifically talking about betting, sports betting, which is not illegal here in S.A (provided it's within the confines of our law), but is a form of gambling.
 
Khanya said:
WordWeb:
Gamble: Money that is risked for possible monetary gain
Invest: Spend money [, time, or energy on something,] especially for profitable returns

<snip>

Your thoughts?
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You forgot horse racing - steep learning curve! :D
 
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The difference in the two, to me, is that one is a long term endeavour while the other one is a short term one.

You need the money now? Gambling might be able to get you what you want. But so is the chance of losing everything. You want money for retirement 20 years down the line? Investing might be able to get you what you want. But so is the chance of losing everything.

In the end. The only people who makes money are the ones who gives you the chance at making money (be it the casino or stock broker)
 
DSL101GP said:
You forgot horse racing - steep learning curve! :D
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A school friend of mine worked in his dads Tattersall for a long school holiday. He watched and learn't how to bet. On his last day of work he bet his entire salary from the holiday on a sure win. It was impossible to loose.

He lost.

His comment after that was its a BS industry.
 
AcidRaZor said:
The difference in the two, to me, is that one is a long term endeavour while the other one is a short term one.

You need the money now? Gambling might be able to get you what you want. But so is the chance of losing everything. You want money for retirement 20 years down the line? Investing might be able to get you what you want. But so is the chance of losing everything.

In the end. The only people who makes money are the ones who gives you the chance at making money (be it the casino or stock broker)
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Both have odds, thus are gambles. With one being more reliable than the other. Thank you.
 
The chance of gaining money on the stock markets is a lot higher than gambling.
Quite a few bubbles, bearish markets and financial market crisis have been experienced worldwide over the years but there have been very few "real" crashes which wipe out 100% of your equity (unlike losing a hand of poker).
Just take a look at the performance history of some of the equity funds like Allan Gray Equity, Coronation Top 20, etc.

However having said that, I'm keeping my money clear of the current markets until this global recession nonsense has settled down.
The US government are burning through money at one serious pace and I'm no expert in financial matters but my brain tells me that there has to be some sort of correction sooner or later to the massive bubble they're creating. Hopefully it will be a gradual correction ...
 
Investing is not gambling, trading it gambling.

Ivesting is when you put money into something generating a return over a longer period (preferably 5 years or more). A maxim for successful investing is time in the market, not timing the market.

Buying and selling stock (and futures and derivatives) frequently trying to get a profit is trading and that is much more of a gamble, high risk but high reward if it succeeds.
 
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alf101 said:
The "global recession" would be the perfect time to invest, in a "boom" you're too late.
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Yeah but there are a lot of "experts" saying that a market crash is eminent so it can go both ways.
We will see if they are correct.
 
cbrunsdonza said:
A school friend of mine worked in his dads Tattersall for a long school holiday. He watched and learn't how to bet. On his last day of work he bet his entire salary from the holiday on a sure win. It was impossible to loose.

He lost.

His comment after that was its a BS industry.
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:confused: Definitely going to take you longer than a school holiday to learn - like I said, it's a steep, steep, steep learning curve.

You just need to take a look a some of the figures involved, e.g. from Investec, Steinhoff, Grand West Casino, the list is a long one.

Take a look at the people attending the Met and the Queens Plate.

Interesting that Greg Blank, a really good stockbroker, before he hit a bit of a bump in the road, was actively involved in the game. Till today he remains involved.

Anyway, this is the wrong forum to be discussing this - the gambling part of it that is. :whistle:
 
Paul_S said:
Yeah but there are a lot of "experts" saying that a market crash is eminent so it can go both ways.
We will see if they are correct.
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And after the crash there will be a "boom" again.

So you buy monthly or if you have a lump sum you can phase it in over a few months. Its called Rand (or whatever currency you are usinbg) Cost Averaging. So your monthly purchase will by less units/shares if they are more expensive and more units/shares if the are cheaper than the previous month. So its good to buy in a crash, you get more value for your money.
 
supersunbird said:
Investing is not gambling, trading it gambling.

Ivesting is when you put money into something generating a return over a longer period (preferably 5 years or more). A maxim for successful investing is time in the market, not timing the market.

Buying and selling stock (and futures and derivatives) frequently trying to get a profit is trading and that is much more of a gamble, high risk but high reward if it succeeds.
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So an investment is always 100% guaranteed in all cases?
 
Khanya said:
So an investment is always 100% guaranteed in all cases?
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no, but the chances of losing absolutely everything in one go is extremely slim.

Taking a bet, you win or lose, most of the time, when you lose, its all your money.

Investing, there may be slumps etc, but you dont lose everything immediately
 
Khanya said:
So an investment is always 100% guaranteed in all cases?
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Yes, they are guaranteed to do something at some stage somewhere in the future... :p

There are some guaranteed products available from some providers but they do have their costs, the cost is most likely lower or capped returns (hopefully not too low since one has to beat inflation or you are losing real money value).

Another way to guarantee growth is to have a well diversified portfolio invested in different things (things being asset classes - shares, property, bonds, cash).

Now lets look at my investment portfolio:
*2 satrix investments (monthly debit order) - gives me exposure to ~55 local shares
*2 unit trusts (monthly debit order) - one gives me exposure to a bunch of emerging market shares with a small foreign property and cash component, the other to local property companies (those companies that own malls and offices and rent them out)
*1 Retirement Annuity (monthly debit order) - the 3 underlying unit trusts give me more exposure to 50% local shares, 25% developed market shares and 25% bonds
*1 investment property - this one is the most stressfull and most work, but in 5 years it will be paid off and providing income at minimal input and those profits will be invested in the above investments (or maybe a second investment property perhaps).
*saving a small monthly amount of R in a capitec account (doesn't beat inflation)
* considering buying some Kruger Rands - they can provide protection against inflation as well as rand fluctuations, but they dont provide a income return.

From the above you can see I am local and foreign shares (the returns get paid out in Rs and are reinvested), property (funds and physical), bonds and cash, so my eggs are in many different baskets.

If one basket has a problem the others still grow, if all baskets have a problem, then the world is screwed anyway. If there is a crash I have these and during the crash I keep getting more of these and when it rises again I have even more and it gets more valuable.

*phew!*
 
supersunbird said:
Investing is not gambling, trading it gambling.
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Trading is not gambling either. It's an expertise and education thing. I'm a better trader, for example, than an investor. Trading can be quite easy if you know what you're doing, know the instruments you're trading, know the market, understand your counterparty, and mitigate risk properly. There is always a level of uncertainty in any investment or trade, but that uncertainty is in the mind of the trader or investor. Ergo, both investing and trading can be considered gambling to an extent. One is no more a gamble than the other, if we're using sweeping statements/generalisations...
 
DJ... said:
Trading is not gambling either. It's an expertise and education thing. I'm a better trader, for example, than an investor. Trading can be quite easy if you know what you're doing, know the instruments you're trading, know the market, understand your counterparty, and mitigate risk properly. There is always a level of uncertainty in any investment or trade, but that uncertainty is in the mind of the trader or investor. Ergo, both investing and trading can be considered gambling to an extent. One is no more a gamble than the other, if we're using sweeping statements/generalisations...
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I meant the type of amateur trading done by some (you know who), sorry if that was unclear. A experienced trader will not be gambling but taking a calculated risk.

Can trading be long term? As in holding the asset for say 2 or more years?
 
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