Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Are You Trading or Gambling?

investinglessons.substack.com

Post reply on HN
Print view View original

91–100 of 419 posts

Re: Are You Trading or Gambling?

#91

Post by dannyw »

scribu wrote: post #7
eterps wrote: post #4

I think this is an interesting concept for gambling: https://pooltogether.com

Ah, a lottery on a blockchain. Why not! Except, unlike a national lottery, you can't trust the issuer and the value of your prize fluctuates even after you win.

1. Blockchains actually allow for "provably-fair" (cryptographically determined) lotteries. A lot more fair and trasparent than national ones.

2. This specific lottery uses stablecoins, with a value tied to the US dollar.

So both of your points are invalid here.

Re: Are You Trading or Gambling?

#92

Post by swader999 »

bidirectional wrote: post #85
swader999 wrote: post #72

Earlier quoted context omitted.

A three to five percent success rate applied to a large population will produce "many many" winners. This is true.

You can apply the same logic to suggest no one should start a business.

Yes, if it's business is day trading. The success rates of other kinds of businesses vary.

Re: Are You Trading or Gambling?

#93

Post by ptero »

chrisgd wrote: post #80
gandalfian wrote: post #77

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.

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

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.

Re: Are You Trading or Gambling?

#95

Post by tekkk »

chrisgd wrote: post #80
gandalfian wrote: post #77

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.

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

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.

Re: Are You Trading or Gambling?

#96

Post by imutemyteam »

dfgdghdf wrote: post #69
elygre wrote: post #13

Around 20 years ago, I had the opportunity to listen to a member of Nasdaq top management talk about the stock market. It's all a _tiny_ bit blurry, being a long time ago, but I remember how he talked about three different perspectives for investing in stock: First, the "company perspective". An investor would buy stock in a company they believed in. Maybe they had good products, or good management, or something else…

Another way of describing the "game perspective" is simply: "a stock is worth what someone else will pay for it". This sounds obvious, but the implication is that the stock price has no direct connection to how a company performs.

and not just that, it is literally an information game. You hear that the company's latest car model failed after seeing the quarterly figures.

Obviously, the stock price will go down?

Wrong, the market already knew that the car model failed, and the current price is already adjusted for that.

Stock market trading is only worth it if you have an information advantage. And obviously it is the one with the most capital that has the highest information advantage.

Anyone debating on the internet that "one could make money in the stock market by studying books" is such a joke. Who is going to have more information, the average joe with a book he read; or the guy with a billion dollars with information streaming into his AI.

Re: Are You Trading or Gambling?

#97

Post by robjan »

chrisgd wrote: post #80
gandalfian wrote: post #77

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.

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

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.

Re: Are You Trading or Gambling?

#99

Post by gen220 »

elygre wrote: post #13

Around 20 years ago, I had the opportunity to listen to a member of Nasdaq top management talk about the stock market. It's all a _tiny_ bit blurry, being a long time ago, but I remember how he talked about three different perspectives for investing in stock: First, the "company perspective". An investor would buy stock in a company they believed in. Maybe they had good products, or good management, or something else…

The value investor type (buffet etc) would call this speculation, not investing.

Speculators control all of the short term movements (everything on a time scale of But the pricing of securities in the market has always regressed to fundamentals in the long arc of history.

The value investor types agree with the nasdaq guy, though. All institutional investors (even the pension fund managers!) behave like speculators, since at least the 80s. It’s just how the incentives are structured.

It’s important to understand how they think, because you don’t want to be trampled by them. But playing their game is not the way to win in the long term.

Post reply on HN