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Are You Trading or Gambling?

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Re: Are You Trading or Gambling?

#261

Post by gretch »

chrisgd wrote: post #245
gandalfian wrote: post #119

Earlier quoted context omitted.

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.

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

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

Re: Are You Trading or Gambling?

#262

Post by zzleeper »

phone8675309 wrote: post #181
JMTQp8lwXL wrote: post #175

Earlier quoted context omitted.

A 'stock' that has no regulatory environment, either. But that's part of the draw.

Digital tulips, only tulip farming didn't consume the same amount of electricity as a small, South American country every year.

Argentina is not small. It's the second largest country (in pop and area?) after Brazil

Re: Are You Trading or Gambling?

#263

Post by RhodoGSA »

earhart wrote: post #239
JMTQp8lwXL wrote: post #231

Earlier quoted context omitted.

Things only have value because we agree they do. The US Dollar is backed by the full faith and trust in the government. "Faith and trust" is as much a digital tulip.

The dollar is also backed by the legal system (which gives the general populace a mechanism to redefine who owns which dollars, e.g. in case of fraud), and the Federal Reserve (which manipulates interest rates and dollar supply levels to try to keep the value relatively stable over time). If bitcoin could solve those problems, and the energy usage problem, I’d use it. As is, it’s solved the double-spend problem - adm…

DOT, ADA, etc.

Re: Are You Trading or Gambling?

#264

Post by staticman2 »

kortilla wrote: post #217
drunkpotato wrote: post #114

Earlier quoted context omitted.

I care a lot what other people do with their money. I care if they use it to harm people. I care if they use it to buy legislation to replace pensions with 401ks. I care if they “earned” it through fraudulent means. Some ways to use money are beneficial or neutral, but some are harmful.

> I care if they use it to buy legislation to replace pensions with 401ks. Pensions are terrible (at least based on performance so far). Not only do they provide worse returns, many are incentivized to lock you into a specific company for many years. An friend of mine retired in 2013 and had pensions from the first 3/4 of his career and a 401k from the last 1/4. The 401k grew so much it paid out more than all of the…

You have to compare the amount of money your buddy paid into the pension plan vs 401k to even begin to do an alalysis. (With or without the 401k/ employer pension match)

I have a pension and if I maxed out a 401k it would grow "bigger" but that means I'd be saving more than the pension plan payments that come from my salary require me to save.

Re: Are You Trading or Gambling?

#265

Post by RhodoGSA »

whatever1 wrote: post #235

A Positive Expected Valued bet does not mean that it is not gambling. A couple of years ago, the MegaMillions prize was so large that the expected profit from a lottery ticket was higher than the cost of the ticket itself. Buying that ticket was still gambling. The problem with the stock market is that you gamble on speculations. And you do so without any connection to the balance sheet of the company. Most of the sh…

I've been doing alot of deep dive into 'Technical Analysis', picked up a couple text books on the markets and have been flipping cryto to great success lately.

I've come to realise that 'Technical Analysis' is just insider trading. Us day traders come to this 'Agreement' on which technical analysis to buy and sell at. There are thousands of different 'methods' to coordinate this insider trading but if a boolinger band lines up with the bottom of linear regression chart, it's a pretty safe bet to assume other people 'Agree' to pump and dump up to some other technical analysis.

Whatever you call technical analysis, I call sophisticated insider trading. It's been working out great for me, but i do feel alittle gross sometimes.

Re: Are You Trading or Gambling?

#267

Post by hellbannedguy »

DSingularity wrote: post #223
BasedInfra wrote: post #59

Earlier quoted context omitted.

Front running is illegal. Its payment for order flow which is earning off the spread while also keep it tight and liquidity in the market.

So... basically front running ?? That’s what it seems like you are describing. They make money when they manage to get ahead and provide the liquidity needed to fill the orders. What am I missing?

Nothing. I can’t believe it’s legal. And yes, I know about the free trading it has supposedly provided. Maybe free trades are dangerous to to most retail traders?

Re: Are You Trading or Gambling?

#268

Post by jliptzin »

whatever1 wrote: post #235

A Positive Expected Valued bet does not mean that it is not gambling. A couple of years ago, the MegaMillions prize was so large that the expected profit from a lottery ticket was higher than the cost of the ticket itself. Buying that ticket was still gambling. The problem with the stock market is that you gamble on speculations. And you do so without any connection to the balance sheet of the company. Most of the sh…

A negative expected value bet also does not mean that it is gambling. For example, buying homeowner's or life insurance. This entire article seems to be quite obvious and should be easy intuition even for a beginner, and doesn't even try to explain how one might be able to tell whether their trading profits are due to luck or skill.

Re: Are You Trading or Gambling?

#269

Post by RhodoGSA »

gen220 wrote: post #105
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…

Value investors use the insurance example as a plank in their argument that “loss avoidance” is the most important value investing principle. Buffet famously said loss avoidance is rule number one, and rule two is to remember rule one. You buy flood insurance every year, even if it only floods once every 15 years on average, and even when it hasn’t flooded in 25 years. If you make 10% for 9 years and then lose 20% on…

I've seen this sentiment alot and i believe it's mostly right but it depends on who you are. There is no 'Best investment Strategy' for everyone. Should a 20-something invest all his savings into crypto? Sure. Should a 45 year old with kids? hell no.

If the 20-something losses all their savings, that sucks. If a 45 year old losses all their savings they have people to provide for. Which doesn't just suck, it's detrimental to his life and hapiness.

A 20 something has 40 years to bounce back, a 45 year old has 15. Time horizions dictate risks that can be taken.

Re: Are You Trading or Gambling?

#270

Post by SuoDuanDao »

randomsearch wrote: post #163
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…

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.

Most of the other ways require a trusted third party. The position of the trusted third party is attractive to rent-seekers and often generates conflicts of interest. Automating the position of trusted third party with an algorithm has value, not because the algorithm works better than a reliable third party, but because it doesn't have any interests of its own that could come into conflict.

Bitcoin itself is not at all the best tool for this job, its value comes from the fact that it happened to be first. It's valuable for the same reason antiques are valuable.

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