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Are You Trading or Gambling?

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Re: Are You Trading or Gambling?

#161

Post by ves »

NOTaCODERR wrote: post #61
DSingularity wrote: post #50

Earlier quoted context omitted.

GameStop price spiked because of a short squeeze. Short squeeze happened because hedgefunds over extended in their short positions. Do you think GameStop was shorted more than float because of games learned by cryptocurrency traders? That’s a stretch.

It’s really interesting seeing how HN can be so uninformed when the topic changes to their area of expertise, this thread is insightful and I’ll use the search button to get an understanding of how many morons are on this forum, this is great for me as I’m not a coder and thought this crowd was ‘smart’.

HN is not a smart crowd, but there are smart people on it.

Re: Are You Trading or Gambling?

#162

Post by acover »

Closi wrote: post #155
shawnz wrote: post #153

Earlier quoted context omitted.

I think a better distinction would simply be whether you are aiming to profit from speculative movements (gambling) or risk premiums (investing). Any kind of technical analysis, fundamental analysis, day trading, etc falls into the first category. Passive investing, factor investing, investing in ETFs, etc falls into the second.

Technical analysis is definitely part of long-term investing (e.g. at the most basic, work out how much profit the company is making compared to the market cap and what dividends will be paid over the investment period)

Technical analysis refers to only looking at the price history of a stock. You are referring to fundamental analysis.

https://en.m.wikipedia.org/wiki/Technical_analysis

Fundamental analysis still requires you have an edge over other investors. Passive does not.

Re: Are You Trading or Gambling?

#163

Post by randomsearch »

px43 wrote: post #148
nikanj wrote: post #127

Earlier quoted context omitted.

And thus, bitcoin. A stock that's guaranteed to provide no dividends, do no buy-backs, or deliver any value - aside from the ability to sell it to the next fool for an even greater value.

I know this whole "bitcoin is pointles" meme gets upchuckles on hacker news all day long, but at this point it's pretty embarrassing that this level of ignorance continues to persist. As it turns out "sending money over the internet" is kind of an important utility for the modern world, and nothing does it as well as Bitcoin. This is why it's now a trillion dollar global economy. That's great for you that you're in a…

I’m undecided on Bitcoin. Happy to be called ignorant, but only if you can explain why. There are many ways of transferring money across the internet. Why is Bitcoin special if that’s the reason for its value? Genuinely want to be won over.

Re: Are You Trading or Gambling?

#164

Post by guerrilla »

gen220 wrote: post #99
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,…

> But the pricing of securities in the market has always regressed to fundamentals in the long arc of history.

I don't doubt this but got any good references?

Re: Are You Trading or Gambling?

#165

Post by ilkan »

anonu wrote: post #75
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…

I 100% agree with that breakdown. But I disagree that the game perspective "matches the market". The beauty of the marketplace is that there are all types of people in the sandbox: fundamentals, macro, hedgers, short-sellers, punters, high-frequency traders, mean-reverters, money managers, pension plan managers. And all of these people have slightly different time horizons ranging from microseconds to years. The mark…

One could say marketplace is a category of game field where the rules and objectives are different for many participants. I want to sell my apples for the maximum possible profit today; she wants to sell both her apples at max profit and lettuce at max speed within its shelf life; the customer wants a decent lunch. Different measures for success, different time limits, different strategies in the common marketplace.

Re: Are You Trading or Gambling?

#166

Post by rblatz »

ves wrote: post #158
px43 wrote: post #148

Earlier quoted context omitted.

I know this whole "bitcoin is pointles" meme gets upchuckles on hacker news all day long, but at this point it's pretty embarrassing that this level of ignorance continues to persist. As it turns out "sending money over the internet" is kind of an important utility for the modern world, and nothing does it as well as Bitcoin. This is why it's now a trillion dollar global economy. That's great for you that you're in a…

Ah yes, the optimal way to send money over the internet must surely involve burning up an amount of electricity which could’ve powered my house last week

Also you have to have absolutely perfect OpSec at all times. Otherwise you run the risk of someone on the other side of the world stealing all your money and there is absolutely zero recourse.

Re: Are You Trading or Gambling?

#167

Post by nikanj »

px43 wrote: post #148
nikanj wrote: post #127

Earlier quoted context omitted.

And thus, bitcoin. A stock that's guaranteed to provide no dividends, do no buy-backs, or deliver any value - aside from the ability to sell it to the next fool for an even greater value.

I know this whole "bitcoin is pointles" meme gets upchuckles on hacker news all day long, but at this point it's pretty embarrassing that this level of ignorance continues to persist. As it turns out "sending money over the internet" is kind of an important utility for the modern world, and nothing does it as well as Bitcoin. This is why it's now a trillion dollar global economy. That's great for you that you're in a…

Transaction costs for sending bitcoin are massively larger than sending paypal.

Re: Are You Trading or Gambling?

#168

Post by hntrader »

lordnacho wrote: post #31

This is only scratching the surface of the question. For interest, there's a very common negative expected value bet that almost everyone is required to make: insurance. We don't consider that gambling, in fact we often tell our parents to buy some when they fly on holiday. Why? The answer touches on the lottery. We care about not just the average case, we care about what might happen. Regarding Kelly criterion, ther…

Insurance is negative EV only in dollars, not necessary in utility. Since most have a risk averse utility function, it's often positive EV in utility.

Re: Are You Trading or Gambling?

#169

Post by [deleted] »

baking wrote: post #141

You are gambling if you are risk-seeking. You are investing if you are risk-adverse. Gamblers like the thrill of win-it-all or lose-it-all. Investors minimize risk while accepting some risk as a cost for higher return. Trading can be gambling or investing, or a combination of both.

[deleted]

Re: Are You Trading or Gambling?

#170

Post by [deleted] »

nikanj wrote: post #127
YokoZar wrote: post #26

Earlier quoted context omitted.

> An investor would not really care about the stock, but only about the behavior of other investors. This sounds like the idea of a Keynesian Beauty Contest ( https://en.wikipedia.org/wiki/Keynesian_beauty_contest ) "It is not a case of choosing those [faces] that, to the best of one's judgment, are really the prettiest, nor even those that average opinion genuinely thinks the prettiest. We have reached the third deg…

And thus, bitcoin. A stock that's guaranteed to provide no dividends, do no buy-backs, or deliver any value - aside from the ability to sell it to the next fool for an even greater value.

[deleted]
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