My background – trading since 2007. started like everyone else, mutual funds, stocks, options etc. FA,TA, FA and TA, etc.
after many years ive come to believe trading stocks is basically gambling. ive not seen a compelling argument to date, but am open to having my mind changed.
see definition here
https://www.britannica.com/topic/gambling
Stocks and options are gambling for the:
1) you are making a bet.
2) the outcome is uncertain
3) the probability is your ability to be right on the direction of trade. alternatively you can look at it as the odds stocks go up historically, odds companies fail, odds that companies with xyz metrics do well well or poorly.
Reasons ive seen come up over the years:
1) you own a piece of the company. in practice you get anything in the secondary market so its the same as owning nothing.
2) dividends – these are risk mitigators and does not detract from the premise as why stocks trading is gambling. its like gow whales who go to casinos get kick backs for showing up. dividends is similar. the company paying you 3-5% but you can lose 1-100%.
3) gambling is random luck with no skill in it, whereas trading requires deep analysis.
not true. sports betting requires analysis of all available information regarding the two teams and has an element of luck.
stocks and options, you look at all the available market data and determine a direction (up, down, sideways).
4) gambling is all or nothing – this is a result that exists with the action, but does not negate the premise.
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