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Are You Trading or Gambling?

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Re: Are You Trading or Gambling?

#291

Post by 177tcca »

ac29 wrote: post #287
colordrops wrote: post #282

Earlier quoted context omitted.

Yes, 11 years after its debut and nearly a trillion in valuation, still ridiculously ignorant statements like "delivers no value". It delivers no value you care about. Many people care about money that can't be inflated, can't be stopped from being traded, and can't be controlled across international borders. Those are hugely valuable to some people, whether you find it valuable or not.

> money that can't be inflated The supply of Bitcoin has been inflated, on average, every 10 minutes for the past ~11 years.

And will continue to.

Event-based, surprise inflation is the only negative inflation, for the end user.

Re: Are You Trading or Gambling?

#292

Post by porb121 »

ryandrake wrote: post #226
hntrader wrote: post #178

Earlier quoted context omitted.

"Top poker players are still gambling." This all hinges on how we define "gambling". A lot of top poker pros do not subscribe to the definition that includes them as gamblers, since colloquially "gambling" isn't always synonymous with the game itself but instead connotes reckless abandon and negative EV decision making.

Everyone has a different definition of gambling. I don't think it has to do with EV. Poker players can definitely achieve long-term, sustainable +EV, especially in rake-free games, because they are playing against other players and not a house. I still think it's gambling (along with the stock market), which to me simply means wagering something of value on a future event whose outcome is unknown.

With a wide interpretation of "wager", your definition includes lots of human behavior that no one would traditionally call gambling, because all future events have unknown outcomes, and most future events have appreciably unknown ones.

Re: Are You Trading or Gambling?

#293

Post by emrah »

Humans are creatures of habit and emotion, so there are some patterns one can sort of predict and rely on, but I would argue what most people call investing is actually gambling.

In fact, without insider knowledge, I would argue it's not possible to invest.

Re: Are You Trading or Gambling?

#294

Post by criticaljudge »

fakedang wrote: post #284
criticaljudge wrote: post #52

Earlier quoted context omitted.

I think you can still buy some stock with the intention of collecting the dividends or hoping for the stock's value to grow over time. There are simple calculations like Price/Earnings ratio that are usually published with every stock, that can help to see if it is a "gambling stock". You will of course hear all sorts of opinions about the stock market, including hardcore socialists who believe it is the root of all…

P/E has become a rubbish metric now, because there's so much money in the market thanks to QE. Most of the money in stocks now is money that would have gone into commodity trading and bonds, etc. The former's prices have stabilized or declined, leading to really poor opportunities, while zero interest rates and neg rates battered the market of the latter. Hence all that money has entered the stock market, which is wh…

Granted it was then perhaps a bad example, as it doesn't take into account the value of the companies possessions.

I just wanted to give an example to say that you can check things about a company beyond the stock price, which may be inflated by gambling. If a stock is "gambled" to the moon, it assume would have a very high P/E. I'm not actually an expert on those indicators, haven't looked into them much.

Re: Are You Trading or Gambling?

#295

Post by sneak »

Raidion wrote: post #133
ab111111111 wrote: post #104

"Gambling occurs when you have a poor understanding of risk, resulting in either (1) negative expected value bets, or (2) poor bet sizing that leads to ruin." Not so. Top poker players are still gambling, but have an excellent understanding of the risks. Their skill doesn't turn them into investors. Gambling is taking a high risk bet. Whether the expected pay off is high enough to justify the risk and whether you can…

I (and I think a lot of poker players) would disagree. Everything in life involves some sort of risk, but doesn't mean it's gambling. Gambling is defined exactly by those two properties. You could die driving to the store, but the odds are tiny and the benefits are huge. Driving to the store isn't gambling. Are casinos gambling when they let you play blackjack? No, the bets are +EV, even those they are only a few % d…

> You could die driving to the store, but the odds are tiny and the benefits are huge. Driving to the store isn't gambling.

This statement seems uncontroversial, but I am not sure it is true.

Driving to the store is one of the riskiest activities I (used to) regularly engage in. Now that I do it (much) less, I do indeed perform a risk/reward analysis of getting into a car (when before it was automatic, with an assumed zero risk due to normalcy bias).

It is possible that under a strict definition we are indeed gambling with our lives each time we get in an automobile.

Re: Are You Trading or Gambling?

#296

Post by mancerayder »

criticaljudge wrote: post #290
mancerayder wrote: post #250

Earlier quoted context omitted.

>But it is obviously bullshit, as the real companies behind some stocks have a real value. Like for example they might own a building that is worth one billion dollars (simple example). If you take away all the stock market shenanigans, you still own part of that building via your stocks. But as a stock holder even of a public company, your shares can get diluted to smithereens when they issue new shares to raise mon…

I'm not an expert on that, but how can companies simply issue new stock? Why wouldn't they simply issue billions of shares and dilute everybody else to nothing? (Except for the loss of trust, meaning they would only be able to do that once)? Can they simply issue new stock in any way and amount they want?

I don't know the legal specifics but they absolutely can, and do, all the time. It makes the stock sink so it's not something you do uncalculated, but struggling or new companies do this all the time. It's a way to raise capital in the public markets. If people believe in your growth, they'll go along and you might not crash too badly after dilution. And yes, some dilute and pay their executive team handsomely year over year.

Re: Are You Trading or Gambling?

#298

Post by ac29 »

criticaljudge wrote: post #290
mancerayder wrote: post #250

Earlier quoted context omitted.

>But it is obviously bullshit, as the real companies behind some stocks have a real value. Like for example they might own a building that is worth one billion dollars (simple example). If you take away all the stock market shenanigans, you still own part of that building via your stocks. But as a stock holder even of a public company, your shares can get diluted to smithereens when they issue new shares to raise mon…

I'm not an expert on that, but how can companies simply issue new stock? Why wouldn't they simply issue billions of shares and dilute everybody else to nothing? (Except for the loss of trust, meaning they would only be able to do that once)? Can they simply issue new stock in any way and amount they want?

Companies issue stock all the time. Ideally, if a company issues, say, $1B in stock, its so they can use that money on projects that will return >$1B in value. In that case, everyone's happy because the dilution in shares in more than counteracted by the increase in revenue.

There are limits - I would assume the SEC has the ability to approve or deny new issuance of shares. If you have 1 million outstanding shares, they would probably frown upon a filing to issue 1 billion more shares.

Re: Are You Trading or Gambling?

#299

Post by IIAOPSW »

jw1224 wrote: post #252
bredren wrote: post #221

Earlier quoted context omitted.

Sounds like a fun project. How much rope does your bot have? What did you write it in / what’s the deployed stack?

I was really hoping nobody would ask me about the stack... because... it's PHP! Hahahaha! Most hobbyists write these things in Python, which I did give some serious consideration to learning... But I know what I'm like — my interest in anything is very short-lived (ADHD!), so I wanted to get a prototype built with a language I'm already proficient in. It's built with Laravel 8, and hosted on DigitalOcean. It stores a…

I've done something similar but the actual moves are still entered manually. What API do you use that lets you do algorithmic trades?
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