What is the difference between “gambling at casino” and “investment”?

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A question by Whois : What is the difference between “gambling at casino” and “investment”? ?


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“Of the answers given, Ivan has the answer that I think is most correct. At a casino you absolutely know the odds. With investments you really do not know the odds. You make choices based mostly on past performance and what you predict the future might hold. At a casino the odds are against you generally speaking. With investments if you are careful and if you have placed your bets in an informed manner, the odds are in your favor generally speaking. But here is a key point. To my knowledge nobody has ever lost billions at a casino. This year trillions were lost on investments.”


“Depends how you look at it. Basically, not much. The casino does not have a great edge, but about 97% of the money goes back to its customers. The trick is that it goes to about 2-3% of the gamblers. So, if you have a good trading system you will do well at the casino, you need to calculate the odds. Investing is betting that a stock, or futures contract, or commodity, or FOREX currency pair, or bonds will go up or down depending on which way you are betting. You put on an asset that you think has the odds in your favor. The truth is, people think it is all fun and games and it’s easy to make money in investing/trading. It’s not. Look at the DOW Jones IA, over 10 years we have returned an amazing ZERO PER CENT! The Dow was 10k in 1999. It is just a little over that. Now take inflation at 15%+ a year (don’t believe 13% or whatever, just look at the price of meat, petrol/gasoline, and other everyday goods and services), and you have lost money. Then out of the 30 stocks that were around in 1999, not all are in trek now, in fact many have been taken out over 10 years, due to major losses, and in some cases bankruptcy. In other words, after inflation and index adjustments, you would have actually been down over 10 years. Point is, it is all about timing. You can make money in either form!”


Your confusion lies in your definition – they are two worlds apart. Maybe what you are really asking is “what is the difference between ‘trading’ and gambling?” Still worlds apart. It is possible to approach the markets with a gambling attitude, e.g., w/o a plan, without knowledge, without the use of stops, no research, no charts, without any money management skills, etc., just roll the dice or throw a dart at the stock listing page and “let it ride.” These people deserve to lose their money, just like a gambler. There are many things comparable, but still worlds apart. This question is asked often here; don’t forget to use the Answers search box. Here is one of my previous responses to this question.”


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