Does Investing = Gambling? The TRUTH
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- Опубліковано 15 лис 2020
- Steps to Analyze a Stock: • 8 Steps to Research a ...
in this video, we look at the history of the stock market to see when the stock market is gambling and when it is investing
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DISCLAIMER: I am not a financial advisor. These videos are for educational purposes only. Investing of any kind involves risk. Your investments are solely your responsibility and we do not provide personalized investment advice. It is crucial that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments. Please consult your financial or tax professional prior to making an investment.
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Theres a drastic difference between trading and investing. Too many people think the stock market is so risky when in reality, almost every American uses the stock market as a retirement vehicle. When you buy and hold securities for the long term, thats not gambling, thats investing, and investing is what creates growth.
Tell that to the people in 2008 that went to retire and saw their 401k's cut in half or more. No one could have seen that coming 10-20 or 30 years prior. Buy and hold mean you HOPE it pans out in the end, but the reality is, you have no say on what state the market will be at the time you need to cash out. Again, gambling with the wolf in sheep's clothing thinking it's "safe" Imo, there are better, safer and more consistent ways to put large money to work than sinking into stocks.
Sadly for many new “investors” yes, it definitely is gambling.
They will learn at their expenses!
Nice video Jimmy 👍🏻
Yes investing is gambling since it fits the definition. "An activity characterised by a balance between winning and losing that is governed by a mixture of skill and chance."
@@James-il3tq
However, if you go to the casino for 5 years, you will lose money, but if you invest for 5 years, you’ll make money.
The longer you go to the casino the more money you’ll lose, but the longer you are invested in the market, the more you’ll make.
Big difference between casino and investing
@@p.c.h.6721 Sadly there are long periods where this is not true.
@@jandrewmore
Obviously if you go back to the Great Depression or later during WWII, yes there were a number of years with negative returns, however the S&P 500 has retuned a yearly average of 13% during the last 10 years, so way better than the casino, let’s hope it carries on.
@@p.c.h.6721 The 70s weren't hot either. It's a poor micro timer, but on a macro scale the Buffett indicator is saying stocks are over priced. Add in that the Fed has no room left to lower rates, and they're likely to have to raise them in a few years to combat inflation, it's going to be interesting.
As for casinos, most of the house games are terrible, but poker and horse races are usually done against other customers, with the house taking a small rake. Buffett also got his start at the races...... :)
investing is such a mental training. You must fight against your inner instinct....desire...and fear. like a monk.
absolutely agree with you Jimmy. A novice risks a lot on getting the investing on the wrong way
Thanks so much for your time and break downs. It’s really appreciated.
I love how you are not a giant douch like every other UA-cam stock guy. Great info great presentation
Risk comes from not knowing what your doing - Warren Buffett.
True
Don't Lose money - Warren Buffet
Investing in the market is not rock solid garrented. You could loose. It’s possible.
It’s just a different game.
Financial risk = gambling.
It’s gambling. It’s just a different game.
yeah but difference is u can hold or save ur money in a stock for long term vs losing all ur money at once in a short term like casinos
@@Gay-rh7yz a long term stock could still loose. It’s possible.
Admitt it, it most definitely is. The risk of loss is what makes it gambling. Analysis is just a skill involved in the gamble, no different from the genuine skill involved in poker. The best still lose to chance.
This was very informative on the 1,5,10 vs 20 year +/- returns. Thanks!
Thanks, Jimmy. It's amazing how common this misconception is.
I legit had a friend approach me in March of this year because he needed to double his money by November. This wasn't even money that we was ready to invest; just that he needed double that amount for an upcoming expense.
Odds are better going to a roulette table and betting red or black. A lot less stress too and way easier. Anyone who says they can 100% predict which way the market will go next is a flat out liar or an insider manipulating the market.
Opening your own business and buying real estate could be considered gambling, too. You never know what the future holds
I've thought about this question a lot. Honestly, I don't think there is much of a difference between the two.
You use the positive EV (expected value) argument, which is the most common, and it's not one that's particularly convincing. Gamblers can by smart and "invest" in only positive EV gambles. Investors can be dumb and invest in negative EV outcomes without realizing it.
You then pivot to time frame and expected reasonable return. But again, you (like many others) do nothing more than associate positive aspects (reasonable return, longer time frame) with investing and negative with gambling. That seems to be the only thing people come up with when trying to explain the difference between investing and gambling. So really there is no difference. "Investing" is just the word associated with positives of the particular activity of risking money for a greater return, while gambling describes the same activity but is just associated negatively.
Thank you Jimmy!
Fantastic video. Patience and reasonable time horizon wins this race to financial freedom.
Most Investing UA-cam Channels = 90% Speculation 10% Entertainment
Learn to Invest with Jimmy = 90% Learning 10% Insight + Potential Multiplier for your long term picks = (0.9 + 0.1) * Capital gains
One of the best videos. Thanks
Thanks Jimmy 👍🏼
Good investments are life savers
Jimmy could you do an analysis or give us your opinion about Palantir please ??
Thank you so much.
And Thank you for your work and your time.
Simply, thank you so so much for analysis.
Thank you, Jimmy.
The only dependable way for the unskilled investor, which is virtually EVERYONE, to safely invest long term is the S&P 500. You're not REALLY investing, you're more like compensating for inflation plus a bit more. Anything else IS gambling. And statistically, up to 90% of people who fancy themselves investors LOSE their money.
Are those time frames inflation adjusted or against the risk free rate?
Great video!!!
You couldn't prove a point better. Good as always! 👍👌
lmao
My covered calls that went from out of the money to into the money out of nowhere last week feels like gambling when I need to roll up and out and go cash secured puts real soon
Fact is, if you can lose money, then it's gambling. Investing is legalized gambling. You're essentially betting that a stock, commodity, currency market or other investment vehicle will make you a profit. Calling it an investment gives it a sense of legitimacy. Putting your money in a bank is not gambling. That all being said, I'm into investing.
Putting money in a bank may not lose money, but it will lose value or purchasing power due to inflation over time which is akin to losing money. The Dollar lost around 16-18% of its value this year. So by your definition of gambling = losing money. Therefore money sitting in the bank losing value is the same as losing money, therefore, by your definition of gambling, money in the bank=gambling. Take this post with a grain of salt though. Lol
Sincerely,
your friendly internet troll😈
Yes
Gov has inside trading. Commoners no need apply.
great analysis, thanks for making this
Thanks Jimmy! What is your opinion on monetary policy of developed world? It looks like they’re all becoming Japan in terms of it.
Investing, is building long term wealth... not investing is a gamble!
How to not gamble with options? I have a good amount of knowledge but am only able to go long on puts and calls. I don’t a lot of money so I can’t do cover calls or married puts. Would it just be okay to set stop losses and plan when to get out?
For many people investing is gambling. In part because they have a greater appetite for gains than completing due diligence with their invested cash. People who do this have always played an important role in the markets. Being a little selfish, the stock mark "gamblers" have helped me out over the years. Thanks.
if you are looking for video ideas i really think it would be interesting to see a drill down in to what makes a company a "zombie" or potential "zombie company. just an idea, seems timely considering the current financial see-saw we are in..
Time in the market...not timing the market
Investing is not gambling, if it’s calculated risk that makes sense. For example let’s say you have 60% of doubling your money, why wouldn’t you do it! Going to a casino the house has the edge, even if you play blackjack by rule book you only have a 49% chance of winning & over time you will most likely lose money.
Yes investing is gambling since it fits the definition. "An activity characterised by a balance between winning and losing that is governed by a mixture of skill and chance."
Gambling isn't only done in the casino you know
@@exaucemayunga22 Yup. There's sports books and day trading also.
@@exaucemayunga22 As well as forex and other risky places
You contradicted yourself implying risk and odds commonly associated with "gambling." Investing is a slower form of gambling.
Of course it is.
Like your post
Nice video
so it is not worth to invest small sums
So a 294% PLUG return so far isn't investing? (I'm being sarcastic) I started a position at $3 and averaged up to $6. Jimmy thank you for this video.
Just to make sure. I am looking for an 8-10% ROI over a 30 year period. Is this a reasonable expectation?
Love the fact you made this video Jimmy!
Thank you Jimmy, I love your videos and I appreciate the effort for getting this valuable and helpful knowledge out there!
Semantics...
Wonderfully explained in simple terms
So while crisis come's up .Bitcoin climbs lol 😆 Now i say crypto is better than stock investing in crypto should be in every wise individual to do list.
Investments are the stepping stones to success, investing is what creates wealth.
The best thing to do in this period is to buy silver and crypto
The Rich become richer by spending like the poor and investing Non stop,While the poor stay poor by spending like the rich yet not making any investment.
@@Crypt0Gems Most intelligent words I've heard today
Crypto is the future
By this, could one invest in a prolific gambler?
Investing might be gambling but you're encouraged to read the cards and the casino wants you to win.
Must be stupid if you think the bank want you to win
All in all you can just buy a CD if the percentages are that bad,,(which they are pretty good so you will do well).. Also when you go to the casino the fed chairman isnt going to be standing behind you giving you a stimulus or your boss isnt going to give you a 7 percent free money like a 401 k to gamble on........
if you have capital, there are much better ways to turn it into new money
I invest in equities, but I do believe it is gambling. All the results companies produce are trailing indicators and not necessarily indicative of future events.
You always do such a great job on your videos. Thank you Jimmy
Trading = Gambling not investing
Short answer: No.
Long answer: It can be if you buy things using emotions and wanting too much money too short-term and not data and calculations and willing to wait for long-term.
Love your channel Jimmy. I saw your intel video and I love it. Do you have a list of companies you are watching or having a target to buy?
Loved the video! Could you possibly make a video going in depth on the payout ratio I get confused sometimes seeing companies with over 100% payouts.
hey jimmy,
thank you for posting such entertaining and informational investing videos. my boyfriend loves watching you and sometimes i join him and we watch your videos together. i hope you see this comment and it makes you smile :)
Showing the returns based on yearly periods, 1, 5, 10, 20 is amazing! I will have to remember this as a basis when I am asked if Investing is gambling ever again. Thank you so much!
Pro Poker Player for a living and I disagree with Jimmy. I think any form of investing is clearly gambling. Broad based indexing is very very likely +EV over a long period but there is no guarantee of profit (See Japan for past 30 years). There is also a risk of total loss in indices, though in those instances money probably won't have any value anyways. Just because a bet has a very high expected value with low risk of loss doesn't mean its any less of gambling than a bet with a low expected value and high risk of total loss.
I bought a ton of options and lost almost my entire 3k account. Salvaged 877. Realizing I was early i bought the same options another week out. $877 turned into 20k and then 120k from a gamma squeeze. Unfortunately I lost touch h of reality in my euphoric state and lost it all over three weeks trying to make a mil. Oh well. Taxes should be fun.
i bet its not
That 2nd definition falls into the general category and life is in there a risk living to get a desired result.(Which most people dont get a desired result. Every day is a gamble.......
Yes, so don’t gamble 😂.
I've always called the stock market the largest casino on earth. Sadly, it's the only way to invest in this country.
Short and future at the same time.
Am glad you make this video , next time my wife ask me are you gambling again am going to show her this video 😁😁😁.
Did your friend manage to do it tho
Only thing I invest in is real estate. Every time I invest in stocks I get an iffy feeling not sure why.
Didn't age well.
I invest in both real estate, stocks and royalties of businesses and made 6 figures. Just gotta be smart in what u invest in
Not true.. if you consider time as a factor to call it gambling or investing is inaccurate.. if you let your money sit on a stock just because it has not taken long enough yet to be called, by your standards, investing, then you are taking a gamble that it might just go up without a basis. You might say, well the stock could go up because it has fundamentals. Yes, fundamentals don't equate to time, it equates only to profitability which could either come shortly after or long after you bought the stocks.
Yes investing is gambling since it fits the definition. "An activity characterised by a balance between winning and losing that is governed by a mixture of skill and chance."
By that definition almost everything is gambling.
@@matejmatkovic7712 Most things don't require you to put up money, but you're correct, there is an element of risk involved in all human endeavors.
@@jandrewmore Im not saying that most things require you to put up money. What im saying is that the definition you chose is too vague and it encompasses too many things.
I’d like to make a gamble. I give you $213 today and you give me $1.01 every quarter until McDonald’s goes out of business increasing this amount every year.
Also if you loose money in the stock market it is tax deductible against your wages and you will get it back eventually as there is a cap of 10000 per year. With regular gambling when you loose you dont get any tax relief and when you when you pay major taxes
Gambling is actually legal btw
I've gone on tilt the last week losing 25% of my portfolio. Just lost my mind and couldn't get a hold of things. Threw my rules out in hopes of getting back. Now I'm further behind
if you don't mind me asking, what did you invest in? i ask because the market has been up for the past few weeks
Have confidence in your positions, just because you had were down 25 percent it’s easy for you to go up that same amount or even higher in the short term future. Maybe diversify your positions and add an ETF like ARKK or ARKF for this volatile market we have to deal with. Good luck
@@iscratchmybutt I bought SPY puts. Yes, everything was up. I was not believing that with the difficulties in health world and that the uptrend was sustainable. I'm embarrassed and very wrong. I should have just went with the trend but I was looking at historically post election and the surge of the virus.
@@eddy4803 I broke my rules and invested in things I shouldn't have. Personal issues made me desperate and now I'm much further in the hole. Dumb move. A fool and his money are parted... I'm the fool
investing low risk gamble. If i am a dividend investor and I invest in income making vehicles I have a 80 percent to 90 percent chance to get my money back and more. With regular gambling it is the other way. You have a 80 percent chance that you will lose
According to Robert Deniro the house always wins and so You have a zero chance at the casino.......
Best way to avoid gambling? Buy index funds, specifically Vanguard's US Total Market index fund OR invest with robo advisor.
Nice thing with 1, 5, 10 and 20 years investing. I wonder how this would look, but inflation adjusted. Still positive, probably, but not so perfect anymore.
“Risky action” ≠ action with risk, the risk of dying from a plane crash is 1 in 11 million, so not “risky” at all, the risk of losing money by investing stock market? More than 1 in 2
?? Where do we get the 1 in 2 odds? How long are we investing for in that example?
@@LearntoInvest I've seen the quote - 90% of traders lose money. Or is is, "day traders", meaning short term high risk investors? I can see the clear difference between the two and I'm on the side of investing isn't the same as gambling. But how can we chalk this up when we have statistics like this?
Investing is ALWAYS gambling whether you're a beginner or an expert, there's no possible way to predict where any stock will be in a year. If you think about it, it's like telling where yourself will be in a year. You don't know that, reality is chaotic and always changing.
Yeah but with investment there is an underlying thing you own when you put your money down. A part of a company. In poker when you put your money down, you don't own anything but the time while playing the game.
Ps I don't completely disagree investment is gambling but I think the above point is a big differentiator.
investing to take ownership and investing for profit yields are two different things
thank god stocks aint the only thing to invest in lol we have affiliate marketing, dropshipping, real estate, leads, businesses etc.
GAMBLERS get stopped out with losses on market dips.
INVESTORS buy more on market dips.
GAMBLERS put money in markets, INVESTORS put money in companies.
However, if you go to the casino for 5 years, you will lose money, but if you invest for 5 years, you’ll make money.
The longer you go to the casino the more money you’ll lose, but the longer you are invested in the market, the more you’ll make.
Big difference between casino and investing.
Go invest in Boeing and tell me if you'll make money in 5 years
@@exaucemayunga22
Go to the Casino and tell me if you make money in 5 days 🤔
Jimmy....have you been lurking on r/WallstreetBets?
It do be like that sometimes haha!
HELL YEAH IT'S GAMBLING. WITH MORE CONTROL IN THE HANDS OF THE GAMBLER.
It really isn’t , investing is to get returns from profits from companies and there are company fundamentals giving you insights into the working of a company
It really bothers me when people say that. It takes a lot of work finding really good companies to put our hard earned money. The evaluation process is not that easy.
Robinhood users are definitely gambling with YOLO options 🤯
I hate to single out a app like this, but the inability to get access to most of the useful information necessary to pick a stock really does tilt Robinhood into gambling, IMHO.
Remember, THIS guy makes HIS money from other people who gamble THEIR money.
I'd say, simply put, investing is investing and gambling is gambling. The stock market allows you to do both, but nobody is going to tell you which one you are doing (or want to do).
The key to investing is to know the difference and the investing=gambling notion comes from too many people thinking they're investing when they're actually gambling.
Less simply put, I'd say there is a continuous spectrum between completely rational investing and completely degenerate gambling - depending on how well-informed your decisions are.
80% investing and 20% gambling ;)
Well, I guess you could call it gambling with a house edge if you do your homework properly! Otherwise stocks are as far from gambling as possible, atleast if you ask me😁
How about trading ? It’s more risky but it has much higher return than investing
Truly is gambling, only gamblers go to great lengths to justify their habits, behaviors and winning "strategies". Let it be know, the house always has the advantage. . .
I invest in real estate & building an online business and never lost tons of money. If anything I actually gained a lot of money enough to get my mom outta debt
@@Gay-rh7yz sure If love to invest in real estate properties, except getting a "investment" property takes 20% down from everywhere I've asked. So, minimum of $150k to $300k cash up front. I thought about buying a multi unit property as a 'primary residence' but leave it to the elite to put a limit of 4 units as the max you can do that with. The more I find things the more I find intentionally placed hurdles simply as a road block to the average joe trying to come up.
During 20 years your total loss was 0% , not gains . his math is broken.
Yes, investing is gambling
yes depends on what is invested
Investing is gambling
And business wouldnt exist without investing lol so it gambling in a good way
First?