Are You Trading or Gambling?

Re:Are You Trading or Gambling? by gandalfian on Saturday February 27, 2021 @07:49AM (#26284530)

Gambling is a zero sum game, your win is anothers loss. Investing is not. When it works there is literally more stuff, goods and services, for everyone! With investing you can win without others losing! That is how we all have so much more stuff than a century ago without anyone losing, we didn't liberate it from the aristocrats we invested and created it.

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Re:Are You Trading or Gambling? by imutemyteam on Saturday February 27, 2021 @08:24AM (#26284693)

Investing isnt gambling, trading is.

Atleast buying and selling stock because you think it will go up or go down is gambling. Basically you are betting that you will outperform the market rate.

If you just want to get the market rate of return by passive investing, it is not gambling. This post is talking about trading.

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Re:Are You Trading or Gambling? by hntrader on Saturday February 27, 2021 @11:01AM (#26285644)

Gambling isn't necessarily zero-sum in utility, which is what matters. There's entertainment value for example.

It'd be like saying the foreign exchange market is zero sum, because one party loses HKD and another gains USD. This is obviously flawed because utility is being gained by both parties despite being zero sum in dollars.

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Re:Are You Trading or Gambling? by chrisgd on Saturday February 27, 2021 @07:51AM (#26284541)

But there is a buyer and seller in the transaction regardless of whether one person is gambling or investing.

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Re:Are You Trading or Gambling? by gandalfian on Saturday February 27, 2021 @08:48AM (#26284798)

You buy a share, it goes up. You sell it to me. Share goes up more. We have both won. How? Because the company created more stuff and injected it into the equation. We can literally get more out than we put in.

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Re:Are You Trading or Gambling? by chrisgd on Saturday February 27, 2021 @12:31PM (#26286393)

Me buying a share from you has no impact on the company. They only benefit if they can sell primary shares. A company’s ability to monetize a rising stock price is time consuming, you can’t decide tomorrow to issue $100m worth of shares and be able to sell them

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Re:Are You Trading or Gambling? by gretch on Saturday February 27, 2021 @12:50PM (#26286590)

No, a higher stock price (caused by the demand and transaction volume generated) is valued immediately as compensation.

If your stock goes up, employee morale is high and ppl want to stay the rest of their vesting schedule. If the stock goes down you have to compensate employees with more cash.

Also, acquisitions are made in stock deals

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Re:Are You Trading or Gambling? by ptero on Saturday February 27, 2021 @08:04AM (#26284609)

And for early trades of a stock, in the analogy of the poster you replied to, the seller is a creator (inventor, builder, etc.) who needs money to build or expand and a buyer provides money for him to do that for part of future profit. That should be a profitable trade for both sides.

The secondary market (where people just swap ownership) serves (spikes and manias aside) to reallocate money to more productive companies. This, by the way, is the area that is really suffering under current "only invest in indices because EMH" mantra. My 2c.

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Re:Are You Trading or Gambling? by robjan on Saturday February 27, 2021 @08:12AM (#26284638)

That doesn't make it a zero sum game. The transaction is zero sum but not the market. If the market were zero sum, the indices would never change.

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Re:Are You Trading or Gambling? by tekkk on Saturday February 27, 2021 @08:06AM (#26284615)

True, but when a company sells their stock in for example IPO, it is a mutual goal of yours and theirs to see that the company rises in value.

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Re:Are You Trading or Gambling? by chrisgd on Saturday February 27, 2021 @12:32PM (#26286410)

Maybe. Or to buy at 19 and sell the next day at 24

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Re:Are You Trading or Gambling? by gher-shyu3i on Saturday February 27, 2021 @08:19AM (#26284668)

Shorting is also gambling, but it is not a zero sum game. Because there are now three parties bearing the risk of a stock, there are either two "winners" and one "loser", or vice versa.

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